Showing posts from May, 2010

Sterling Euro exchange rate forecast 28 May 2010

Good Morning. The pound gained some strength yesterday after talk of the Prudential taking over AIG may be off the table. The Euro also gained some strength after China talked positively about the Euro. Pound to Euro rates pushed up to the high €1.18's, but the spike was short lived and dropped a point later in trading. This morning rates stand as follows:
GBP/EUR 1.1769GBP/USD 1.4530GBP/AUD 1.7070GBP/NZD 2.1306GBP/CAD 1.5271GBP/CHF 1.6790GBP/ZAR 10.972GBP/JPY 132.73EUR/USD 1.2340Prudential Talk spurs Sterling In March, when the takeover was announced, the pound fell massively against the US Dollar as the firm took up USD positions. These positions have now been reversed, and the bug demand for the pound by the firm meant it strengthened and boosted rates. So, sterling gained on expectations the UK firm would need to unwind previous dollar purchases. As we said earlier in the week, supply and demand is a huge driver for exchange rates, and the demand for GBP has pushed up it's …

Currency Exchange Rate predictions for May June 2010

Good morning. The pound gained against the Euro yesterday, hitting a 2 week high due to continued weakness in the Eurozone due to the debt problems in Greece, and now Spain. We'll have a detailed look at this in a moment, and look at the forecast for Sterling exchange rates for May and June 2010. First, the usual snapshot of rates @ 08:30am: GBPEUR 1.1789GBPUSD 1.4492GBPAUD 1.7374GBPNZD 2.1614GBPCAD 1.5318GBPZAR 11.094GBPJPY 130.77GBPCHF 1.6730EURUSD 1.2293Eurozone Weakness
With UK political risk out the way, investors and speculators have been shifting their focus to the Eurozone. The sovereign debt worries were compounded yesterday with expected austerity measures coming in Spain, and also poor take up of a German debt auction. As you can see from the illustration, most of the EU has severe debt problems, and this is what's causing Euro weakness.Coupled with these problems is the fact the policy makers response in the EU seems to be very uncoordinated. This has meant more and…

How EU debt crisis/Korea is affecting exchange rates

Good Morning. World markets were affected yesterday due to ongoing concerns about the sovereign debt crisis in the Eurozone. Markets were also nervous due to the developing crisis in North Korea following the sinking of a South Korean warship. Today we'll look at how these events are affecting exchange rates. First, the usual snapshot of rates @ 08:30am:
GBP/EUR 1.1681GBP/USD 1.4344GBP/AUD 1.7423GBP/NZD 2.1527GBP/CAD 1.5384GBP/CHF 1.6645GBP/NOK 9.4287GBP/HUF 325.50GBP/JPY 129.17GBP/ZAR 11.266EUR/USD 1.2276Eurozone Debt - how is this affecting exchange rates?The renewed concerns about EU debt follow comments on Monday from the IMF that the Spanish economy needs reform. Over the weekend the rescue of Spanish bank Cajasur by the Bank of Spain sparked fears about the Spanish Banks. Four Spanish banks have since announced plans to merge. These concerns have lead investors to seek "safe havens" for their money. German government bonds and the US Dollar are safe havens, and that…

Will the pound keep rising against the Euro?

Good Morning. We'll look today if the pound will keep rising against the Euro, and why it's been doing so. We'll also take a detailed look at GBP/USD rates. First a quick look at where rates stand at 08:30am this morning:
GBP/EUR 1.1661GBP/USD 1.4292GBP/AUD 1.7604GBP/NZD 2.1596GBP/CAD 1.5374GBP/CHF 1.6605GBP/JPY 128.06GBP/ZAR 11.414EUR/USD 1.2249So, will the pound keep rising against the Euro?
Sterling rallied over 1 % against the Euro yesterday but lagged a broadly firmer U.S. dollar, which was supported on risk-aversion stemming from the single currency's weakness. Because the Euro is so weak, other currencies such as the pound are benefiting, despite the weakness surrounding Sterling.

In a nutshell, it's unlikely that this will continue for very long. The reason rates are still buoyant is due to weakness in the Euro and nothing to do with any strength in the pound. Fears over the sovereign debt crisis has weakened the Euro; this has the effect of making it cheaper…

Pound to Euro predictions

Good morning. Last week we witnessed another volatile week for Sterling against the single currency with a 3.2% fluctuation in exchange rates across the week. In real money terms this equated to a difference of over £5500 when purchasing €200,000.

The movements came following a series of economic announcements in both the UK and the Eurozone further proving the fragile state of both economies and in turn their respective currencies.

The main details of note from a UK perspective came in the shape of the consumer price index showing a hike by 0.6% taking the annual rate to 3.7%, higher than the expected 3.5% that had been forecast making the current level the highest seen in 17 months.

This was followed by the bank of England minutes which showed an expected 9-0 vote from the Monetary Policy Committee to hold the base rate at 0.5% and pause its quantitative easing program at £200bn. The final piece of data released on Friday saw the UK’s budget deficit revised down to £156bn from £163bn.

Why has the pound fallen 21st May 2010?

Good morning. The pound to Euro exchange rate has been very volatile overnight, in unusual big swings when the UK and EU markets were closed. We'll look at this in a moment. First the usual snapshot of rates as at 08:30am

GBP/EUR 1.1488GBP/USD 1.4363GBP/AUD 1.7359GBP/NZD 2.1363GBP/CAD 1.5315GBP/CHF 1.6520GBP/ZAR 11.368GBP/JPY 129.33EUR/USD 1.2502

As you can see from the chart, GBP/EUR rates fell quite dramatically through the night, hitting €1.1398 at the low, before starting to recover slightly this morning. It's to do with fears that the debt crisis in Europe will spread, and in overnight trading in the Asian markets, there was a big sell off of both Euro and Sterling, as investors flocked to the safe haven US Dollar.

"There's uncertainty over the extent of the fallout from the crisis, such as whether it would end up leading to a halt in financial trades like after the Lehman shock," commented MasaruHamasaki, a senior strategist at Toyota Asset Management.

When thi…

Sterling drops as markets close


The pound has fallen against the Euro, in an unusual large movement outside market hours.

Sterling fell after markets closed this evening:

It's to do with Euro strength, as we've been warning about in the last few days. This is the biggest daily drop since October last year. Sterling to Euro has now fallen more than 2 cents since yesterday.Why has it dropped?It's likely to do with the speech by Prime Minister David Cameron and French Premier Nicholas Sarkozy - also with the US markets still open, investors are continuing to shun risk, and are flocking to safer haven currencies such as USD which is hurting the pound. As we've been saying for the last few days in our recent posts, the weakness was likely to be short lived, and GBPEUR rates are now well down from the highs earlier in the week. We're now at 20:30pm BST and after rates dropping to the mid to low €1.14's, GBPEUR now recovered back €1.15. Check back tomorrow for the latest developments, and g…

Why has the pound fallen against the Euro?

Good Morning. The pound has fallen against the Euro and US Dollar this morning, as the Bank of England minutes showed that interest rates in the UK are likely to remain very low for some time. The main reason that rates have dropped however, is due to risk aversion. More on that in a moment. Rates this morning are as follows:
GBP/EUR 1.1574GBP/USD 1.4343GBP/AUD 1.7264GBP/NZD 2.1139GBP/CAD 1.5088GBP/ZAR 11.193GBP/JPY 130.92GBP/CHF 1.6518EUR/USD 1.2390

As you can see from the 24 hour chart above, Sterling to Euro rates have tumbled overnight from €1.1750 down to €1.1560. Those that took heed of yesterdays report were able to use a Forward contract to lock in rates while they were high. Those clients will be glad of doing so after we correctly predicted rates would not likely last at those levels for very long. The pound may recover with short term spikes, but looking at where rates have moved this year, it's much more likely that rates will fall than moving up. Those that need to buy…

Pound to Euro exchange rates rise due to Euro weakness

Good Morning. The Euro has weakened further this morning after a surprise move by Germany to ban the naked short-selling of shares. Analysts said Berlin's move had led to uncertainty and had added to fears for Europe's banks.

The result is a weaker Euro, and this has pushed pound to Euro rates up despite the weak pound. At 08:30 am rates are as follows:
GBP/EUR 1.1739GBP/USD 1.4327GBP/AUD 1.6680GBP/NZD 2.0775GBP/CAD 1.4914GBP/CHF 1.6436GBP/ZAR 10.943GBP/JPY 131.90EUR/USD 1.2198Continued Euro Weakness
You can read more about the new ban here on the BBC site. In a nutshell, it's when investors are betting on the fall of the Euro, which in turn drives selling in the market and may cause it to fall more than necessary. After the move, the Euro hit a fresh 4 year low against the dollar.
In Tokyo, the single currency fell below $1.215 for the first time since April 2006, before recovering to $1.2202.

This Euro weakness is giving some good buying opportunities for those that need E…

What will happen to Pound Euro exchange rates, May June 2010?

Good Morning. So, what's happening with exchange rates?
Well Sterling is getting weaker, as is the Euro. The dollar is getting stronger. We'll have a detailed look at each currency in turn in a moment, and look at the impact it will have on Sterling exchange rates, particularly for pound to Euro. First, the usual snapshot of rates as at 08:30am:
GBP/EUR 1.1680GBP/USD 1.4491GBP/AUD 1.6500GBP/NZD 2.0639GBP/CAD 1.4865GBP/JPY 134.47GBP/ZAR 10.848GBP/CHF 1.6390EUR/USD 1.2404Sterling Weakness
Following the election, the pound was initially buoyed and rates hit a 1 year high against the Euro. Since then, the problems that have not gone away have started to resurface. Very high debt levels, with big spending cuts and tax rises expected to curb the deficit. The UK was the last major economy to exit recession, and the government at the time tried to combat the recession by borrowing huge sums through Quantitative Easing.

This has left the UK with a huge deficit, and the Bank of England …

Pound vs Euro Forecast

Pound to Euro Forecast
Last week we witnessed a volatile week for the GBP/EUR pairing with a massive 4.1% difference between the high point and low point of the week, in monetary terms this would mean a huge difference of £8,200 on a £200,000 trade. The high point of 1.18370 was near the highest level seen since June of last year and represented some excellent buying opportunities.

Confusion and unrest seem to have gripped the Eurozone following Nicolas Sarkozy’s statement at a Brussels summit of EU leaders on Friday that unless drastic measures were taken France would pull out of the Euro. Share prices dropped across Europe and the Euro has slid to an 18-month low against the dollar on fears that the Eurozone bailout of Greece will fail.

Reports have surfaced that French president threatened to pull his country out of the single currency altogether to force Germany to agree to the rescue plan. Sarkozy reportedly demanded "a compromise from everyone to support Greece ... or France w…

Pound drops further as trade deficit widens

Good morning. The pound fell again yesterday after figures showed the trade deficit was more than expected. We're coming off near 12 month highs for GBP to Euro, and at 08:30am this morning rates are as follows:
GBP/EUR 1.1612GBP/USD 1.4572GBP/AUD 1.6273GBP/NZD 2.0430GBP/CAD 1.4905GBP/CHF 1.6279GBP/JPY 135.23GBP/ZAR 10.873EUR/USD 1.2543Trade Deficit widens.
The pound fell nearly two cents (1.2%) against the US Dollar and by a cent against the euro, reversing gains made earlier in the week following the general election. Figures from the Office for National Statistics (ONS) showed that gap between the UK's imports and exports widened last month.

The value of imports exceeded exports by £3.7bn ($5.5bn), up from £2.2bn gap recorded in February.

A weak pound good for the UK?
The Bank of England and some economists say that the government and BoE will be happy for the pound to remain weak as it makes UK exports cheaper for foreign buyers. While this may be true, it's also true we d…

Sterling drops on Bank of England comments

Good Morning. The pounds strength after a government was formed did not last long, and comments from the Bank of England and poor employment data caused rates to drop away during trading yesterday. We've recovered slightly this morning, and rates @08:30am are as follows:
GBP/EUR 1.1754GBP/USD 1.4900GBP/AUD 1.6507GBP/NZD 2.0715GBP/CAD 1.5061GBP/ZAR 11.049GBP/JPY 139.22GBP/CHF 1.6523EUR/USD 1.2673Bank of England comments
BoE governor Mervyn King warned risks to growth had increased and that the EU debt crisis had made it more urgent for Britain to cut a budget deficit, which is by far the biggest amongst industrialised nations. The central bank also suggested UK interest rates would stay at a record low 0.5 % for far longer than markets had expected as it forecast inflation would be below its 2 percent target in two years even with rates at current levels.

The comments caused the pound to drop against the Euro and US Dollar. Now that the political uncertainty that has been dogging…

New Government gives Sterling strength - will it last?

Good Morning. New UK Prime Minister David Cameron is beginning to shape his government, after the Conservatives agreed to form a historic coalition with the Lib Dems. Mr Cameron was installed as PM on a dramatic day that saw Lib Dem leader Nick Clegg announced as his deputy. The news has given the pound some strength, and this morning rates are as follows:
GBP/EUR 1.1820GBP/USD 1.4966GBP/AUD 1.6747GBP/NZD 20.911GBP/CAD 1.5248GBP/JPY 138.97GBP/ZAR 11.239GBP/CHF 1.6626EUR/USD 1.2660Sterling Strength
Cameron's move into No. 10 Downing Street removed some of the uncertainty that drove sterling to a 13-month low against the dollar last week after an inconclusive election gave no party an absolute majority in parliament.

"While we doubt that any government would be able to quickly put the UK back on a more sustainable fiscal path, this may raise the risk for 'positive' political surprises and could leave the pound well positioned to gain," said Todd Elmer, currency strate…

Political developments causing huge swings in exchange rates

Good Morning. It was a very volatile day on the currency markets yesterday, with exchange rates for Sterling to Euro fluctuating from lows in the €1.14's up to the mid €1.16's. We'll have a look at all yesterdays developments in a moment. First a snapshot of rates @ 08:30am:
GBP/EUR 1.1655GBP/USD 1.4832GBP/AUD 1.6516GBP/NZD 2.0605GBP/CAD 1.5195GBP/CHF 1.6465GBP/ZAR 11.150GBP/JPY 137.17EUR/USD 1.2725What caused the volatility?
First we had the announcement that Emergency measures worth 750bn euros ($975bn; £650bn) have been agreed to prevent the Greek debt crisis from affecting other eurozone countries. You can read more about that here. The news caused markets around the world to surge, as the package gives some sort of stability to the single currency.

We then had the BoE announcement that rates would be left on hold, and that the Quantitative Easing programme would remain unchanged. Again, a detailed BBC report outlines this here.

Political Developments
By far the most im…

Pound vs Euro & Pound vs Dollar predictions.

Pound vs Euro
Last week we witnessed a turbulent week for Sterling against the single currency with a 4.5% fluctuation in exchange rates on Friday alone. This equated to a difference of an astonishing £7500 when purchasing €200,000. The movements came following the UK election and the hung parliament verdict that came out of it.

The week had begun so well with the Pound opening at 1.1530 racing to a high of 1.1865 by Thursday. This was mainly down to the riots seen in Greece and the increased speculation of a credit rating cut for Portugal, Spain, Italy and Ireland sending the Eurozone into meltdown. The highs seen represented some of the best buying levels seen for 12months as seen in the graph below.

The UK election then took centre stage and the hung parliament verdict was anything but well received by the currency markets. As mentioned earlier in the report the rate plummeted from €1.1865 down to €1.1357 in a shift seldom seen in the markets. The Pound did rebound in the afternoons t…

Sterling Euro at 9 month high as election nears.

Good Morning. The Pound has hit it highest level since 11th August 2009 against the Euro this morning as a hung parliament is priced into the market and debt fears in Europe are still a main concern. EUR/USD is now below 1.3! Rates @ 08:50am are as follows:GBP/EUR 1.1695GBP/USD 1.5139GBP/AUD 1.6661GBP/NZD 2.1027GBP/CAD 1.5553GBP/ZAR 11.450GBP/JPY 143.17GBP/CHF 1.6746EUR/USD 1.2942Once you've finished reading today's blog it might be worth reading the following link:
which is a very good article from Bloomberg on how the election could affect the Pound depending on the result.

USD report for this week

Over the past week we have seen a high level of volatility for the Sterling-Dollar currency pairing with a 2.4% difference between the highs and the lows of the week.

On Monday, the Dollar gathered strength on the back of a host of data releases; new U.S. home sales rose at their fastest pace in 47 years in…

Sterling Euro rate effected by new poll showing conservatives with 10 point lead.

Good Morning. The election will be the main driver this week, especially with the Tories regaining a 10 point lead over the chasing pack. Rates @ 09:05am are as follows:
GBP/EUR 1.1538GBP/USD 1.5204GBP/AUD 1.6497GBP/NZD 2.0829GBP/CAD 1.5380GBP/ZAR 11.269GBP/JPY 144.00GBP/CHF 1.6524EUR/USD 1.3175
Market Report this for week


The past week has seen a slightly milder fluctuation in the GBP/EUR pairing, with a rate for exchanging Sterling to Euro reaching a high of 1.16190 and a low of 1.14470. This means a 1.5% shift between the highs and lows of the week. To put this into monetary terms it would mean a difference of £3,440 on a £200k trade.

Sterling has seemingly been at the mercy of the media and its political opinion polls this week, as every time a hung parliament is published as looking more likely, Sterling seems to have lost strength. That said, the downgrading of Spain and Portugal’s credit ratings along with the now uninvestible status of Greece has weighed heavily on the Euro, ba…