Sterling falls after BoE Super Thursday

As predicted in my post earlier in the week, the Pound has fallen sharply today after the Bank of England's 'Super Thursday':

Why did the Pound fall?

In it's quarterly inflation report, the Bank of England (BoE) cut their growth forecasts, and downgraded economic expectations. Also, all 9 members are now unanimous in their voting to keep rates on hold, with all 9 members deciding to keep the rate at the record low of 0.5%.  Wage growth is easing,and they've now made it pretty clear that inflation is going to remain low for 2 more years, and interest rates will therefore likely remain at their record low for a long time to come.

With a slack economy and the BoE being very dovish today, Sterling has not fared well as the graph above shows.

Will the Pound rise or fall in the coming months?

I think there are serious downside risks for Sterling at the moment. There's nothing I can see that will push the Pound higher, and the EU referendum will soon come into focus. I read this morning that Goldman Sachs have said that if the UK does vote to leave the EU, the Pound could fall by 10% to 15%. That would put Pound/EUro rates down to around €1.11!

The more uncertain the outlook is for the UK economy, the more volatile markets will be, so my view is the coming months could put the Pound under serious pressure against other currencies.

If you need to exchange currency, get in touch

I provide commercial rates of exchange for both private and corporate clients looking to exchange more than £5k+. If you need to buy or sell currency, then get in touch for a free quote. I have no problems providing more competitive rates than banks and other currency brokers, so see how much you could save.

Click here to make a free enquiry and get a quote

Making Regular International Overseas Payments

The market is pretty flat today, with GBP/EUR at €1.32 and GBP/USD at $1.44. There's little market data today and therefore exchange rates are likely to remain flat.

I thought I would touch on another area of the market I can help with: Making Regular Overseas Payments...

Many of my clients initially use my services for making a large transfer for purchasing property overseas. Once purchased however, clients will often need to top up their overseas Euros accounts for things like paying bills, living expenses, holidays, servicing a mortgage or paying for ongoing renovations of their new property. We don't only assist with larger foreign exchange requirements; we can assist in smaller transfers too, and the 2 options are as follows:

Regular Monthly Payments

Simply doing this through the bank can prove very costly. We all know that the rates of exchange the banks usually offer are low, however the transfer charges are also very high, and the actual transfer can take a long time.

Using my services for this type of regular transfer is very simple. Simply set up a standing order for however much you want to convert each month, and we look after the rest ensuring your Euros are transferred to your chosen account quickly and securely. The only cost is an £8.50 transfer fee and there are no commission charges. Because we combine hundreds of clients' smaller transfers together and buy the Euros in bulk, you achieve an excellent commercial rate of exchange even for amounts as low as £500 per month.

The advantage of this option is once set up, you don't need to do anything and your transfers happen automatically. You can amend or cancel the arrangement at any time by simply contacting your bank and amending your standing order.


Online Trading Platform

Some clients prefer to pick and choose when they convert their funds; our online trading platform is perfect for this and is designed for amounts from £500.00 to £10,000.00. Available 24 hours a day 365 days a year, you can log on and see your live trading price at any time, and book the rate when you choose to do so. This gives you lots of flexibility in terms of timing, without having to make any phone calls or call the trading floor.  


Large volume transfers

We still deal with larger transfers from £5k to £10m, and on these larger volumes we are negotiating rates directly with various commercial sources, achieving rates that are as close as 0.3% below the 'mid-market' interbank price. Most brokers rates are around 1 to 2% below this, and banks as much as 4% to 5% below. On a typical purchase of €300,000.00 you could save thousands of Pounds.

Exchange rates in February 2016

Welcome back to my regular readers, as it's been a week since my last update while I was overseas. While I was away, GBP/EUR exchange rates were relatively stable, after a very volatile start to the year. The pair traded within 1 cent of €1.3150 all week, and today has also remained relatively range-bound, however has climbed this afternoon to around €1.32:

The pair now seems to have settled in the low €1.30's, however with a plethora of data from both the UK and Eurozone this week, I think we could see volatility return to the markets this week.

Thursday will be of particular importance as we have 'Super Thursday' in the United Kingdom. 

What is Super Thursday? 

It's the day when the markets have a huge amount of data to digest for the UK economy. At 12pm the Bank of England announce its latest interest rate decision, and release the minutes to what was discussed and how they voted. We also have the latest BoE UK Inflation report. 45 minutes after all of this, the BoE Governor Mark Carney gives a speech with his views for the UK economic outlook.

Until last year, all this data was released at different times, however it is now all made public in one go, and due to this it can have a big impact on Sterling exchange rates. The press have since dubbed the day 'Super Thursday' and it happens once every 3 months.

What affect could Super Thursday have on exchange rates? 

It's all to do with interest rates. Last year many though interest rates would be going up in the UK, and this caused the Pound to rise due to the potential higher return on offer. The latest figures however suggest that due to a global slowdown, rates are to be left on hold in the UK until 2017. This is part of the reason the Pound has fallen so much in recent months. A combination of low inflation and a global economic slowdown has resulted in only 1 of the 9 member Monetary Policy Committee voting for rates to go up.

This week, we could well see a continuing dovish outlook for UK inflation, and if this is the case I would expect the Pound to fall further. Carney's comments could push Sterling either way, but I think we will have a volatile week and by Friday, the GBP/EUR rate could be significantly higher or lower, depending on the inflation numbers and Mark Carney's comments.

Do you need to buy Euros, or convert Euros back to Pounds?

Perhaps you are buying or selling property in Europe. Maybe your business buys and sells in different currencies. Whatever your currency requirement, it's very likely I can help you get much better rates of exchange than your bank or existing broker is offering you.

Click here to send me a free enquiry to find out what rate I can offer. I will give you a call to have a very brief chat about your requirements, provide you a live quote, and explain the different contract options you can consider. In the last 6 years, thousands of clients have got in touch via this blog and converted over £42m, saving on average 2.8% compare to simply using their bank or not shopping around for the best rate. This may not sound like much, but when you're converting a large sum, even a small improvement to the rate can save you a significant sum.

Click here to send me your requirements and see how much you could save.

Sterling stages recovery against Euro

Sterling has continued to recover against other currencies today, including a decent rise against the Euros. A few days ago rates were down at €1.29, but today have peaked at €1.3265 before settling back down in the low €1.32's:

Financial markets are still reacting the news yesterday from the European Central Bank and their hints at further stimulus. Oil prices are up, US and EU stocks rose, and the Pound has continued to gain against other currencies.

Will it continue? Impossible to predict of course. I'm hearing from some quarters that the Euro will continue to weaken due to the ongoing stimulus, which taken alone would cause the GBP/EUR to rise again. If however markets open again on Monday and the Srecent trend of oil prices dropping returns, then we could see a return to the Pound falling away again. So this could well be a temporary spike. My view is it's not a reversal of the trend, and for those that need to buy Euros, consideration should be given to locking something in while it's above €1.30.

If you want to take advantage of the commercial exchange rates I offer, click here to send a free enquiry, and get a quote to compare with your bank or existing broker. If you have an upcoming transfer to make, then it's a good idea to see what I can offer and what you could save

Click here to send a free enquiry today.

For regular readers, the blog will be quiet for a week I'm afraid, while I'm overseas. I'll be back in action next Friday with a full round-up of what's been happening. 
 If you need to discuss a currency transfer, just complete the contact form by clicking here, and one of my colleagues will be able to provide you a quote and discuss your requirements.

Pound/Euro rates recover slightly, but will it last?

There has been a slight recovery in GBP/EUR rates today due to comments by the European Central Bank (ECB) president Mario Draghi. As you can see from the chart below, it was normal service all morning with GBP/EUR steadily dropping to lows of €1.2920. You can see the sharp spike upwards at 13:30pm to €1.3082:

The spike will be welcome for any Euro buyers, but in real terms the rate is only back to where it was yesterday.

What caused the Pound/Euro to rise, and will it continue?

At 12:45pm the ECB announced its decision to keep interest rates at their low of 0.05%. This was as expected, as very low inflation in the EU means it will be a very long time before rates rise. At 13:30pm Draghi gave a press conference, and it was what he said here that caused the Euro to weaken, pushing GBP/EUR higher.

He stated that downside risks have increased due to global uncertainty, citing commodity markets and geopolitical risks in particular. He said that due to lower oil prices, inflation is likely to drop further, meaning that interest rates will remain lower for an extended period, and rates could even be dropped further. There is also speculation that they will extend their QE stimulus programme.

All of this caused the Euro to weaken and become cheaper to buy as investors sold the single currency, and that's the reason we saw the GBP/EUR rate climb from €1.29 to nearly €1.31. You can clearly see the instant reaction to his comments in the graph above. The rate has already started to dip back away however, and as I stated above while the spike is welcome for Euro buyers, it's only recovered the losses we've seen over the last 24 hours. I expect the downward trend to continue and rates to drop back below €1.30 again in the coming days. Those that need to buy Euros may wish to consider locking in a rate sooner rather than later, if they are worried the rate will keep dropping.

What could move the exchange rate in the coming days?

From the EU we have a few things tomorrow that could affect things. ECB president Draghi gives another speech tomorrow morning, and as we've seen today his comments often move the GBP/EUR exchange rate. There are also some manufacturing and services numbers from Europe. In the UK, we see Retail Sales data and the latest Public Sector borrowing figures. If poor, these could weaken the Pound further.

Next week is mostly comprised of economic figures from the USA, however we do have UK consumer confidence figures on Tuesday, and the latest Gross Domestic Product (GDP) numbers from the UK on Thursday. In Europe,  inflation numbers on Friday could cause a spike in GBP/EUR if they are close to 0%.

Click here to get a quote, or simply find out more about what could move the exchange rate


Making the most of your currency in a volatile market

  • Need to make an international currency transfer?
  • Worried exchange rates could keep dropping? 
  • Want to achieve the best possible exchange rate?  

The last few months have been incredibly volatile with Sterling dropping sharply against other currencies, however I can help you by providing an experts view on what is causing the current volatility, and explain the various options you can consider to help you decide when to fix an exchange rate. I can also provide you a quote for your exchange for you to compare with your bank or existing currency broker, with rates up to 5% better.

Click here to make an enquiry today and get a quote for your exchange.