Pound/Euro rises to €1.2750 on strong UK Retail Sales

Thursday 18th December 2014 
The Pound has had a good day today, particularly against the Euro. This morning we saw figures that showed UK retail sales rose at their fastest annual rate in more than 10 years last month. We were expected the number to show +4.5%, and it actually came in at 6.9%. This is partly due to the effects of Black Friday. 



Retail Sales are a good overall barometer of economic health, and so strengthens a currency when the numbers are better than expected. This caused Pound/Euro to rise from €1.26 yesterday, to €1.2752 at the time of writing. The other reason for the strong performance for GBP/EUR today is seasonal end of year demand for Sterling, and further speculation that the European Central Bank will have to conduct easing measures to prop up the EU economy. 

It should be noted that this trend has repeated itself several times in recent months, with the Pound/Euro rate getting to these sort of levels, before dropping back to the €1.26 mark again. For this reason, those that need to buy Euros in the next 3 months should consider fixing the current rate with a Forward contract. This works by lodging 10% of what you want to convert, and you can lock in the current rates for up to 2 years. This protects against the rate dropping, and allows you to budget effectively for what you need to buy with your currency, be it a property abroad, a car import, or goods and services from the Eurozone. 

Getting the best exchange rates 


If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.

Oil Prices and Central Banks affect exchange rates

Tuesday 16th December 2014 
It’s been a pretty choppy day in the currency markets, with news from Central Banks and oil prices causing quite a bit of exchange rate volatility. Today I’ll look at what has been happening with some of the main currency pairs. If you need to buy or sell any major international currency, I can source exchange rates up to 4% better than banks can offer. Contact me today to find out how I can help.

Sterling/Euro 


Pound/Euro rates seem to have been sliding lower over the last few months, and currently stuck between €1.25 and €1.26 which is several cents below the 6 year high of €1.29 we saw in the summer. It’s about the Bank of England and interest rates. In the summer analysts expected a rate hike before the end of the year, and this had caused the Pound to rise in value. It now looks like a rate hike is now some way off, and this has caused the Pound to drop off. 


Today we saw inflation fall even lower, down to a 12 year low caused by lower fuel prices. This could also slow the UK's economy which may cause Sterling to fall further in the short term. The Bank of England, which targets an inflation rate of 2%, warned last month that the rate could drop below 1% in the next six months, and this poor outlook means that the Bank is unlikely to raise interest rates from the historic low of 0.5% for some time. 

If you need to buy or sell Euros, click here to get a free quote or discuss the GBPEUR forecast. 

Sterling/US Dollar & Canadian Dollar 


In the last 6 months GBP/USD has dropped from $1.72 down to around $1.56/$1.57. Part of this is due to the weakening of the Pound, but also the US Dollar has been gaining strength recently as their economy continues to impress. It’s likely the US central bank will raise interest rates before the UK, and that’s likely to keep the rate in check. 


Another reason is the low oil prices. The US imports lots of oil so when the price drops, the USD generally gets stronger and more expensive to buy. The opposite is true of the Canadian Dollar – GBPCAD rates have gone up by 4% in the last month, as the Canadian Dollar has weakened due to the low oil prices. They export lots of oil so their currency has weakened. 

If you need to buy or sell USD or CAD, click here for a quote or simply to have a chat about what’s moving the exchange rate. 

Sterling/Australian Dollar 


We are currently seeing very good rates to buy the AUD. The current rate is the highest it’s been all year. This is down to a very weak Aussie Dollar. Australia’s main export is Iron ore, which is at a very low price. China buys most of it, and their factory and manufacturing sectors are slowing, meaning less demand for these raw materials. This has caused the AUD to weaken and become cheaper to buy. Due to the slowdown in the Australian economy, they may have to cut interest rates next year and that is also pushing the GBP/AUD rate higher. 


If you need to buy Australian Dollars, click here for a quote or simply to have a chat about what’s moving the exchange rate. 

Russian Rouble 


We don’t trade the Russian Rouble, but it’s certainly worth a mention. The Rouble has lost about half of its value this year, and today alone has fallen another 10%. Russia’s central bank last month raised interest rates by 1% to 10.5%. Last night, they hiked the rate to 17% in an effort to stave off the fall in value of the currency. While we don’t trade this currency, I’m mentioning it as it demonstrates how central banks try to use interest rates to alter the value of a currency. On this occasion it hasn’t worked, and fears of fresh sanctions could drag the rouble lower, although it’s mainly due to oil prices. 50% of their GDP comes from oil, so the 5 year low in prices is reflected in their currency. 

Getting the best exchange rates 


If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.

Pound falls on poor manufacturing data

Tuesday 9th December 2014 
Yesterday's gains for the Pound and Sterling/Euro in particular were again short lived, with the GBP/EUR exchange rate today dropping back towards €1.26: 


UK Industrial and Manufacturing production disappoints 


The reason for the drop today is due to worse than expected UK Industrial and Manufacturing.  As the figures were lower than expected it weakened the Pound pulling exchange rates lower. This is because expectations of when interest rates may start rising will most likely be pushed back in the light of the poor figures. The Bank of England has signalled it will keep interest rates low well into 2015 as earnings struggle to grow more than inflation. 

The UK GDP estimate released at 3pm today was as expected, so didn’t have any effect on exchange rates. 

Pound/Dollar up 


This afternoon, we saw some Euro strength which pushed GBP/EUR lower, and caused flows out of the US Dollar. This caused the GBP/USD rate to recover to the $1.57 levels. 

Getting the best exchange rates 


If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.