GBP/EUR breaks €1.27 - 2 year high. Exchange Rates Forecast 2014

Thursday 18th September 2014 
Today is the day of reckoning for Scotland, and the currency markets are going to be very susceptible to the result, whichever way it goes. Let's have a look at how Pound/Euro and Pound/Dollar rates are faring ahead of tomorrow's result:

Sterling/Euro 


We’ve seen a spike in Pound/Euro rates today, and at the time of writing GBP/EUR sits at 1.2720 - this is the highest in over 2 years. in fact if you look further back at average rates, we're within around 1 cent of the highest Pound/Euro rate in 6 years. That was back in October '08 when the credit crunch hit destroying the value of Sterling.

Part of the spike is weakness in the single currency, but mostly it is the Pound that has been gathering strength as a ‘No’ vote for Scotland is being priced into the market. 



This is the highest it’s been in well over 2 years. Today alone we have secured a record amount of Euros for clients and this is for 2 reasons. Firstly it’s the best it has been in years. Secondly, the chance of a big drop in rates if Scotland vote yes mean most clients want to fix a rate now to protect against a drop. 

Even if the vote is No, it’s hard to see the Pound gaining significantly given the high it’s already at. I think the NO vote is already priced into the market for the most part, and the uncertainty which would remain even if independence is rejected will likely hold the Pound back. 

If I needed Euros, I would be keen to fix a rate while it’s the best it’s been in years. For me, the downside risks for hanging on to see what happens tomorrow would be too great. Those selling Euros should have a Stop Loss in place to protect against the Pound gaining further. 


If you would like to discuss which way exchange rates are moving, and get a quote to see how much we can save you on your currency, click here to send a free enquiry. 

Sterling/Dollar 


Rates have climbed for this currency pair, after falling overnight. The reason it dropped was due to comments by FED chair Janet Yellen last night. She indicated interest rates will be going up at some point in the USA, and that they will have wound up their QE stimulus programme within a month. 


This strengthened the Dollar and pulled rates down as the chart above shows. However the Pound has reversed these losses due to the strengthening of the Pound today. Sterling has gained as a ‘No’ vote gets priced into the market. 

As with any currency against Sterling, the risk of a big drop should they vote Yes is huge. Get in touch today to discuss your currency requirement. I can source rates up to 5% better than banks and other financial institutions can offer, and I also have various tools and contract types than can protect you against the market moving the wrong way. 

Get in touch for a quote on your exchange 


Regardless which currency you may need to buy or sell, get in touch with me here for a quote on your exchange. I usually have no problems beating rates provided by banks or other currency brokers, and a better rate could save you thousands. 

Click here to get in touch today.

Protect your currency requirement against Scottish Referendum

Tuesday 16th September 2014 
Good afternoon. Significant volatility remains in the currency markets, with the Pound/Euro rate continuing to fluctuate in value due to uncertainty over the Scottish referendum. 

Pound/Euro over the last week 


As the chart below shows, the last week has been very choppy for Sterling Euro. We have seen a low of €1.24, a high of €1.26, and in just the last 24 hours it’s moved up and down by nearly a cent. 


These movements are being driven by investor sentiment as the Pound is bought and sold on speculation on what may happen with this week’s Scottish referendum vote. 

What would happen to the Pound if the vote is Yes? 


It is of course impossible to predict which way exchange rate moves, if it were possible I would not be writing these market updates from the trading floor, I would be relaxing on my super yacht in the Mediterranean! What we can do is take a view on what may happen with exchange rates, and explain the tools available to protect against the rate moving the wrong way. This is a much better strategy than simply hoping the rate won't fall. 

My view is that should Scotland vote Yes, then the uncertainty this would create in the financial markets means that Sterling would face a huge sell-off. As investors dump the Pound many more would join the bandwagon and we could see exchange rates fall by up to 5%. 

What would happen to the Pound if the vote is No? 


This is harder to predict. Some think that the Pound is being held back by the possibility of independence, and that if the vote is No Sterling will rebound. I’m not so sure. In the event of a no vote there will still be much uncertainty surrounding the future economic realities of further devolution, and the currency markets hate uncertainty. So I think at best we might see a temporary spike in the Pound, but if so it will be short lived. 

What you should do to protect your exchange rate 


You can get in touch with me here for a free consultation on your options. I can explain the different paths you can take so you can take an informed decision on when to fix a rate. For example those buying Euros may wish to use a Forward contract to lock the rate in advance of the result, protecting against the market dropping. 

Those converting Euros to Sterling could look to place a ‘Stop Loss’ order to hedge against the rate moving the wrong way, while still being able to take advantage of any Sterling weakness. 

Whatever your currency requirement, I can help you with various contract types, over 10 years’ experience in the Foreign Exchange markets, and rates of exchange that are incredibly competitive, and up to 5% better than banks can offer. 

Click here to send me a free enquiry now.

Exchange Rates Forecast: Scottish Referendum/Central Banks

Wednesday 10th September 
Good afternoon, and welcome back to my regular currency updates which will resume my blog today. I’ve been in Europe for a week so apologies for the lack of news in recent days. 

Much has happened since I’ve been away however that has had a big impact on exchange rates, so I’ll run over the recent developments and what this means for the Pound against other currencies. The main topic is the Scottish independence vote, so read on to find out how this might affect Sterling. 

If you're reading this, you probably have an interest in which way the exchange rate is going, and in turn want to achieve the best exhcange rate you can, at the right time. Click here to send me an enquiry, have a free consultation, and a quote on the exchange rate I can offer you. 

The topics I’m going to cover today are as follows: 

  • ECB cuts interest rates 
  • Mark Carney signals no interest rate rise until 2015 
  • Scottish independence vote causing big swings for the Pound 

ECB cuts interest rates 


Last week’s surprise was the European Central Bank cutting interest rates. I mentioned before I went away that I thought they would announce some sort of stimulus, but I didn’t think they would cut rates again. The Euro weakened and Pound/Euro rates went up, but not by much. 

I was quite surprised to see rates in the €1.24’s against the Euro, but that is because the Pound has also weakened which I will cover in a moment. Against other currencies, the Euro is very weak indeed. 

Mark Carney signals no interest rate rise until 2015 


The Bank of England governor said yesterday rates aren’t going up in the UK until spring 2015. The Pound has weakened on the news, as regular readers will know that in the last few months, talk of an imminent rate rise has been giving Sterling strength. 

However, Carney doesn’t seem to know what he wants, giving conflicting information, and so watch out for any other speeches or comments he makes. If he indicates interest rates may rise, the Pound could gain. If he indicates it’s some way off as he did yesterday, the Pound will fall like it did this morning. 

Scottish independence vote causing big swings for the Pound 


This is the big one. Just today, this story has caused the GBP/EUR rate to drop from 1.25 down to 1.24, and then recover all the way back to 1.25 again. This might not sound like much, but it’s a huge change in a single day, and can make an enormous difference to any currency conversion you may need to do. 

So what’s been going on? The vote for independence is only a few days away, and polls at the moment are around 50/50 as to which way it will go. 

If they vote Yes, then it has serious economic implications. For exchange rates, it could mean the Pound weakening by up to 15% which would send exchange rates plummeting. If they vote No, then the Pound would likely gain strength and rates go up. Either way, there is likely to be significant movement in the price of the Sterling. 

Shell, BP, Standard Life have all made comments today about the potential economic effects, and it is these comments that have been pulling rates all over the place today. 

My View?


This is my personal blog, and my personal view is that many people, especially the 16 & 17 year olds, will be voting with their heart and not their head. They will be using this as a protest vote against the current government. What they don’t realise is this isn’t anything to do with politics, and if they vote Yes, there will be no going back, and a 300 year old union will be gone. I was born in England, but I’m half Scottish, most of my family live there, and I class myself as British. I hope they vote no. A Yes vote will probably bankrupt the country and create a pointless border. 

I think when it comes to the crunch the vote will be no. The alternative could send exchange rates plummeting.

Getting the best exchange rates 


I can source you exchange rates very close to the published market price, so if you need to buy or sell Euros, Dollars or any major international currency, get in touch for a quote and to find out how I can help you. 

Click here to send a free no obligation enquiry now.