Good Morning. The pound has had a great week, and we've seen more gains already this morning. The reason is good GDP estimates, hawkish comments from the Bank of England, and also weak data from the EU and USA. Just look at where the rates are @ 08:30am:
- GBP/EUR 1.1330
- GBP/USD 1.6320
- GBP/AUD 1.7618
- GBP/NZD 2.2100
- GBP/CAD 1.6749
- GBP/CHF 1.6724
- GBP/ZAR 12.026
- GBP/NOK 9.2329
- GBP/JPY 148.17
- EUR/USD 1.4405
Eurozone leaves rates on hold
The European Central Bank (ECB) has kept eurozone interest rates on hold at a record low of 1% for the eighth month in a row. Economists argue that rates are unlikely to increase while eurozone inflation remains well below the ECB's target of 2%.
There are also questions over the state of Europe's economic recovery, with the state of Greece's public fianances a particular concern. Last year, Greece admitted that its budget deficit was expected to reach 12.5% of GDP, attracting the condemnation of the European Union.
The eurozone prohibits budget deficits of more than 3% of GDP.
Summary
So, the weak forecasts from some EU countries has weakened the Euro, helping push GBPEUR rates up. As you can see from the above chart, we're pretty much at the best exchange rates since September last year. It's a very good idea to now consider either locking the rate in with a Forward contract.
If you wish to continue to gamble in the hope rates may rise further, then you should consider placing a Stop Loss order. This allows you to set a level so should rates fall, your currency is secured at a pre agreed level. This then means you can aim for the higher rate, without leaving yourself open to losing out on all the gains made this week. Contact us today to discuss how this works.
When you get in touch, ensure you mention you heard about foremost currency group through our Blog. Simply quote 'Blog'
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