Which way could Pound/Euro rates go September 2015?

Tuesday 1st September 2015 
Good morning and welcome back to my regular currency updates after the Bank Holiday weekend. While here in the UK it was dismal weather, heavy traffic and only the lack of a James Bond movie to complete the typical August Bank holiday hat-trick, over in Europe it was business as usual and markets were open. 

Numbers released yesterday and again this morning from Europe were better than expected, with both Strong German Retail Sales and a better than expected EU inflation numbers giving the Euro a boost. This has pushed exchange rates lower. This morning we saw the Euro gain further strength due to better than forecast EU jobs numbers. 

The Euro has been getting stronger and stronger recently, as those with an eye on the GBP/EUR rate will have noticed. In the last month the rate has plummeted by over 8 cents, seriously affecting those trying to budget for a Euro purchase. As I outlined in a recent post, the reason for the decline is two-fold. Firstly we have the Pound weakening off due to the expectation of a UK interest rate hike being pushed back. The second reason is a stronger Euro due to a resolution of the Greek debt crisis and a resurgent EU economy that now seems to be growing at a steady pace, with the help from the ECB Stimulus seemingly having the desired effect. 

I do think that rates will eventually recover to €1.40 again, but this is now a medium to long term forecast. In the coming weeks and months, if we continue to see strong economic figures from Europe then the single currency could continue to become more expensive. 

Below I’ve listed what I think could affect exchange rates for the coming months. If you have a currency transaction to perform and would like to discuss what rates I can offer you, then click here to send a free enquiry today. 

What could affect exchange rates in the first week of September? 

There are various things that change exchange rates, for example: Economic data, Political Uncertainty, Natural Disasters and acts of war. The first of these is the only one that is forecast in advance, and below are the main scheduled releases for the week ahead that I think could affect exchange rates. 

If you would like to have a more detailed chat about how the exchange rate you’re interested in could change in the coming weeks or months, then click here to send me a message and I will be happy to answer any questions you may have about timing your currency purchase. 

Monday 31st August 2015 – Yesterday we saw a raft of positive data from Europe, including strong German Retail Sales and higher than expected inflation data. This has pushed GBP/EUR exchange rates lower as the single currency gained in strength. 

Tuesday 1st September 2015 – More positive data was released from Europe this morning showing that German and Italian unemployment was better than expected. This pulled GBP/EUR down from €1.37 to €1.3560. UK data this morning included mortgage approvals that were better than expected, and credit and PMI numbers that were worse. Later today we will see Canadian GDP figures that could affect GBP/CAD rates, and US Manufacturing and Construction data that might change GBP/USD exchange rates. 

Wednesday 2nd September 2015 – We start the day with Australian GDP figure. Later in the morning we see UK Construction figures, and EU wide inflation numbers. Recent EU data has been good and if this continues to be the case, expect GBP/EUR to drop further. In the afternoon, US Employment data, Non-Farm Productivity and Factory orders could all affect cable. 

Thursday 3rd September 2015 – Lots from Europe today that could change GBP/EUR exchange rates, including Inflation data, and the latest ECB interest rate decision. While no change is expected, the press conference afterwards often contains hints about future policy and so could well affect the Euro. Later in the day, US manufacturing and Services PMI could affect GBP/USD. 

Friday 4th September 2015 – the G20 meeting starts today and so any surprises here could affect various currency pairs. Scheduled releases on the calendar other than this include EU GDP figures which I expect to show a monthly growth of 0.3%. In the USA it’s jobs day and the important Non-Farm Payroll numbers. Regular readers will know that this release is very difficult to forecast. The current expectation is for 220,000 new jobs to have been created. Any more than this, then expect GBP/USD to drop, and vice versa.


 

Sterling continues to fall against the Euro

Wednesday 26th August 2015
Following ‘Black Monday’ there continues to be volatility with Sterling exchange rates. Looking at Sterling/Euro in particular, the recent 8 year highs of €1.44 are now a distant memory. Rates have plunged in the last few weeks, and despite recovering a little yesterday, it fell again last night at is now stable around the €1.36 level as you can see from the chart below:


Further volatility expected on currency markets 

This all began Monday when a global rout in the stock markets was prompted by a huge share sell off in China. Fears of a global slowdown intensified in recent days after China devalued its currency and data pointed to further signs of weakness, triggering volatility in global stock and currency markets. 

Interest Rates 

China cut its interest rates this week in an effort to avert disaster, and investors are now questioning whether the Federal Reserve in the USA and the Bank of England in the UK can change interest rates. Much of the Pound’s strength in recent months was on expectations interest rates would rise later this year. Even the recent Bank of England inflation report gave investors’ confidence rates would rise within 6 months, boosting the value of Sterling. However with the latest global developments, it’s now likely to be late next year, or even 2017 before rates rise from their current 0.5%. As a result the Pound has weakened. 

Experts expect market volatility to continue until at least next month when the USA decides what to do on interest rates. Just a few weeks ago, most thought they would raise their interest rate, but now it’s more likely up to a year away. 

Safe Haven Currencies 

An unlikely benefactor of the recent turmoil has been the Euro. Now that Greece is out of the news following an agreement to provide an €86bn bailout, the Euro has gained strength as I had predicted it would do for some time. Their stimulus programme seems to be working, and actually the EU economy is looking more and more robust. This has meant that due to the global turmoil, investors view the single currency as a safe place to park their funds while avoiding stock market turmoil and this strength is also a factor in the GBP/EUR rate falling away sharply. 

Do you have a currency transaction to perform? 

If you have a foreign exchange need in the next 6 months, then the current volatility should be of concern and you should take steps explore all the options available to you. You can get in touch with me by clicking here, to get a quote and find out about how you can protect yourself against adverse market movements. 

Whether you are buying or selling property abroad, a business that deals in foreign currencies, or simply need to top up a foreign bank account, I can help. I have been a currency broker helping private and business clients get better rates than their banks or existing brokers offer for more than 10 years. 

Get in touch today for free, have a brief chat, and get a quote on your exchange to see how much you could save. 

Alastair Archbold

Huge exchange rate volatility GBPEUR, GBPNZD, GBPAUD, GBPUSD

Monday 24th August 2015 
It’s incredibly volatile on the currency markets today. Just look at what has happened with Sterling/Euro rates, falling from 1.38 into 1.34's:
  
 
When I opened the trading floor this morning at 8am, GBP/EUR was at 1.38 where it ended on Friday. We have seen the rate drop throughout the day, and at 2.15pm it plummeted to as low as 1.3455 before recovering back into the €1.35’s. This is a huge drop and other currency pairs are seeing extreme volatility, due to global stock rout and economic uncertainty. 

The FTSE 100 has lost 10%, as investors dumped riskier assets and flocked to currencies seen as safe havens on fears about a slowdown in the Chinese and global economies. The Euro has been a huge benefactor, as usual safe havens like Sterling and the US Dollar are suffering. This is because the global slowdown means interest rates are no longer likely to go up in the UK or US any time soon. 

As the Euro gains significant strength, commodity based currencies like the Australian Dollar, New Zealand Dollar and Canadian Dollar continue to weaken as oil prices and other commodities continue to fall in value. 


Sterling/Dollar has gone from $1.56 to $1.58 just today, as the Dollar weakens due to the global turmoil. Just look at some of the movements we've seen during trading today:

GBP/USD rises to $1.58:



GBP/NZD has risen by 10 cents in the last half an hour:
GBP/AUD rises from $2.16 to $2.22:

A panicked and interesting day on the currency markets. 

If you have a currency transaction to perform, then get in touch to find out more about the currency services I offer. From exchange rates up to 5% better than the bank, to tools such as 'Stop Loss' and 'Limit' orders that can protect you against volatility like we've witnessed today, you could save thousands by simply getting in touch for a quote and a chat about how my service works. 

Click here to send a free enquiry today. 

Why has Pound/Euro fallen into €1.38's?

Friday 21st August 2015
Since my last post on Tuesday, Sterling/Euro rates have fallen from €1.42 into the €1.38's, caused by the Euro gaining strength. 

There are several factors that have caused the single currency to gain. Firstly the news that Greek Prime Minister and Syriza leader Alexis Tsipras stood down on Thursday, paving the way for new elections. This seems to have been taken as a positive move for the Euro and last night the rate starting slipping away. This continued this morning when German and European inflation numbers were better than expected, coupled with worse than expected UK Public Sector borrowing data. 

As you can see from the chart below, in the last week the rate has been in steady decline. With a resolution to the Greek debt crisis, and decent EU economic data, this could well spell the end of the record 8 year high GBP/EUR exchange rates we have seen recently. It’s good news however for those selling Euros, with a typical conversion of €250,000.00 netting £4500.00 more in just a few days. 


China Slow down affects currency markets 

Elsewhere, the slowdown in China continues with stock markets there dropping again. This affects other global currencies because China is such a huge economy. Countries like Australia that export to China are suffering, and so the Aussie Dollar has weakened recently. The US Dollar benefits and gains strength as investors become risk averse and seek safe haven currencies. 

Would you like to discuss your currency requirement and get a quote? 

If you would like to discuss your foreign exchange requirements with me, then feel free to get in touch by clicking here. I provide free consultations over the phone to help you understand what is moving the exchange rate you’re interested in, and can provide you a quote for your exchange to compare with your bank or existing broker. 

I can help anyone looking to convert £5000+ and I can trade nearly all the major currencies including EUR, USD, AUD, CAD, NZD, ZAR, TRY, HKD, SEK, SGD, CNH, HUF, SEK, NOK and many more. 

Whether you are buying or selling property abroad, topping up a foreign account, or a business that converts currency to buy or sell overseas, chances are I can help you get a much better rate than you are currently achieving. 

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