14th September 2010
Good morning. The pound has fallen overnight, after much worse than expected house price data. The Eurozone has also increased it's forecasts, strengthening the Euro and compounding the issue to push GBP/EUR rates down. Today we'll look at this in detail, after the usual snapshot of rates as at 08:30am:
- GBP/EUR 1.1923
- GBP/USD 1.5382
- GBP/AUD 1.6459
- GBP/NZD 2.1091
- GBP/CAD 1.5801
- GBP/CHF 1.5423
- GBP/ZAR 10.946
- GBP/HKD 11.949
- GBP/NOK 9.3917
- GBP/JPY 128.05
- EUR/USD 1.2932
Pound falls on House Price Data
A bigger proportion of surveyors are expecting house prices to fall in the coming months than at any time since March last year. Some 38% more of those asked, in the survey by the Royal Institution of Chartered Surveyors (Rics), expected prices to fall rather than rise in the next three months.
Markets only expected 11% of those asked to expect a fall, and so the figures show that the housing market is not as strong as hoped. House prices are a reflection of the economy as a whole, and so the pound has suffered this morning. Against the Euro, the pound at the time of writing sits at €1.1931.
Eurozone increases growth forecasts
The European Commission has raised its forecast for growth in the EU this year, after "particularly strong" growth in the second quarter. The commission now expects growth in 2010 of 1.8% in the EU, up from an earlier estimate of 1%, and of 1.7% in the 16-member eurozone, up from 0.9%.
As it seems that the EU is now growing faster than the UK, the Euro has strengthened accordingly. This means it's more expensive to purchase, and so GBP/EUR rates have fallen as a result.
If you need to sell Euros
Rates are currently now the best since July this year. It's impossible to predict if rates will continue to fall, however most analysts in the medium to long term do expect the pound to recover back to around €1.30 at some point next year. If you need to sell Euros, you should consider fixing the rate while it's the best for several months.
If you need to buy Euros
If you have lots of time, then next year we expect rates to recover. In the short to medium term however, markets remain volatile while figures hint towards a double dip recession. Due to this, there is a chance things will continue to get worse before they get better, so if you need your currency within the next 3 months, then due to the uncertain volatility, a Forward contract can allow you to lock in today's rates and protect against rates continuing to fall.
Whichever currency you need to buy, click the link below to send us an enquiry, and make the first step to achieving commercial exchange rates that are up to 6% better than available at the high street banks.
Labels: Forecasts for Sterling and Euro, Sterling Euro Outlook