Showing posts from May, 2011

Weekly GBP/EUR & GBP/USD Forecast Outlook

In this week’s Report:

• EU debt worries weaken the Euro significantly
• Concerns remain over UK growth and economic recovery
• Interest Rate speculation still the main driver for exchange rates
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Sterling made strong gains throughout the week against the Euro broadly off the back of continued market commentary regarding the problem of the debt crisis in Greece. At its best the Pound gained almost 2 Cents against the Euro from where it started at the beginning of the week:

The pound's rise came in spite of data confirming Britain's economy made a sluggish start to the year as household spending saw its sharpest quarterly fall in almost two years reinforced the view that UK interest rates were unlikely to rise soon.

Problems continued for Greece and the Eurozone following comments made by Eurogroup President Jean-Claude Juncker who said that sh…

Pound vs Euro hits 10 week high on EU debt worries

27th May 2011
Good morning. Sterling rose to a 10 week high against the Euro yesterday, with the single currency being weakened on further speculation Greece will need further bailouts. Against the US Dollar we are at a 2 week high. At 08:30am this morning rates stand as follows:

GBP/EUR 1.1536
GBP/USD 1.6448
GBP/AUD 1.5392
GBP/NZD 2.0134
GBP/CAD 1.6047
GBP/CHF 1.4110
GBP/ZAR 11.353
GBP/JPY 133.18
GBP/NOK 8.9736
GBP/DKK 8.6012
EUR/USD 1.4254
Weak Euro pushes GBP/EUR to 10 week high
Greece's problems in terms of needing further debt assistance from the EU has weakened the single currency, pushing investors to dump the Euro and buy other currencies such as Sterling.
Despite the fact EU rates are higher and the UK economic recovery is fragile, analysts say that because we have a single monetary and fiscal policy unlike the Eurozone, this has given some strength to the Pound.
However, it's also the fact that due to expectations the UK economy will struggle to recover and that interest rates are…

Sterling surges up against Euro May 2011

26th May 2011
Good morning. The pound surged against the Euro yesterday, after reports Greece may have to face fresh austerity measures weakened the single currency. At one point levels hit €1.1573 which is best exchange rates to buy Euros for 2 months. However, as usual the gains were short lived. At 08:30am this morning rates are as follows:

GBP/EUR 1.1486
GBP/USD 1.6296
GBP/AUD 1.5368
GBP/NZD 2.0147
GBP/CAD 1.5906
GBP/CHF 1.4189
GBP/ZAR 11.330
GBP/JPY 133.49
GBP/NOK 8.963
GBP/DKK 8.5619
EUR/USD 1.4186
Pound hits €1.1575 against Euro, then falls
So why did the Pound gain so much against the Euro? It was due to reports that the Greek government is organising a referendum on more austerity measures, and this cast doubt on Greece's ability to tackle it's debt crisis.
So, this weakened the Euro significantly and as an alternative to the Euro investors flocked to the Pound, giving it some strength.
These gains were despite data showing household spending had fallen, and growth was at the 0.5% …

Pound up against Euro ahead of GDP figures

25th May 2011
Good morning. Sterling is back up above €1.15 against the Euro this morning, recovering losses yesterday after Moodys threatened to cut the credit rating of some UK banks. At 08:30am this morning rates are as follows:

GBP/EUR 1.1513
GBP/USD 1.6147
GBP/AUD 1.5410
GBP/NZD 2.0355
GBP/CAD 1.5834
GBP/CHF 1.4201
GBP/ZAR 11.350
GBP/JPY 132.21
GBP/NOK 9.039
GBP/DKK 8.5842
EUR/USD 1.4023 Pound up against Euro but analysts expect Sterling weakness

The credit agency Moodys recently said it may downgrade the rating of some UK banks and this weakened Sterling yesterday against most currencies. Small Euro gains against the Dollar also helped prop up Sterling.

Analysts say that the general weakness of Sterling vs the Euro mean that the Pound will probably remain vulnerable due to concerns about the banking sector and the fragile UK economic recovery.

Rates to buy Euros are now back to a 2 month high, so those that missed the chance on Monday to buy at these levels has another opportunity today. With …

Pound hits 2 month high vs weaker Euro

24th May 2011
Good morning. In a day of contrast, GBP/EUR rates hit a 2 month high yesterday, but GBP/USD rates hit a 7 week low. The gains against the Euro were short lived though, and have already dropped back away. We'll look at the reasons for this after the usual snapshot of rates as at 08:30am:

• GBP/EUR 1.1462
• GBP/USD 1.6118
• GBP/AUD 1.5279
• GBP/NZD 2.0245
• GBP/CAD 1.5744
• GBP/CHF 1.4222
• GBP/JPY 131.72
• GBP/ZAR 11.256
• GBP/NOK 8.9922
• EUR/USD 1.4062

Pound gains against weaker Euro

The Euro weakened significantly yesterday, on concerns about possible debt restructuring in Greece, a ratings outlook downgrade for Italy and after heavy defeats in regional elections for the ruling parties in Spain and Germany. This made the Euro cheaper to purchase, and pushed GBP/EUR rates up to a 2 month high of just above €1.15.

Also the BoE's chief economist Spencer Dale said in a weekend interview with the Financial Times that the central bank must start to raise interest rates to tackle i…

GBP/EUR & GBP/USD Forecast, (Weekly outlook)

In this week’s Report:
Better UK data overshadowed by growth worriesInflation up, but GBP gains limitedInterest rates continue to drive exchange ratesRound up of the week’s data that may affect rates(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Despite an interesting week for data in the UK, Sterling’s upside pressure against the Euro remains stunted over concerns for the long term growth of the economy. The pound started the week down against the Euro after the previous week’s growth figures had indicated that the UK interest rates would lag behind the Eurozone despite continued problems with the debt crisis in Greece and the bailout:

Tuesday saw the release of the UK Consumer Price Inflation figures for April where the year on year reading was up at 4.5% for 4% previously and significantly higher than the 4.2% that was expected. The movement was largely due to the rise in food prices and alcohol and tobacco duties, however, despite the fi…

Sterling remains weak despite good Retail Sales

20th May 2011
Good morning. Better than expected Retail Sales yesterday boosted Sterling, and it rose against the Euro and US Dollar. Gains were short lived however, as it did not change things fundamentally and UK growth prospects still looked patchy and consumer confidence fragile. Rates at 08:30am this morning are as follows:
GBP/EUR 1.1328GBP/USD 1.6214GBP/AUD 1.5191GBP/NZD 2.0447GBP/CAD 1.5670GBP/CHF 1.4281GBP/JPY 132.44GBP/ZAR 11.124GBP/DKK 8.4449GBP/NOK 8.9024EUR/USD 1.4308Retail Sales better than expected

UK retail sales rose by more than expected in April, boosted by the extra public holiday for the royal wedding, and the warm weather. Sales last month were 1.1% higher than March, said the Office for National Statistics.

Demand rose most for clothing, footwear and food products. However, economists warn the big rise in sales is likely to be a one-off, and that consumer spending remains muted. A separate report by the CBI business organisation said that growth in British factory o…

Sterling falls after BoE minutes and Employment data

19th May 2011
Good morning. Sterling fell to a 6 week low against the US Dollar and slipped against the Euro yesterday, as a mixed UK employment report and a slightly dovish tone to Bank of England policy minutes painted a cloudy picture. At 08:30am this morning rates are as follows:
GBP/EUR 1.1330GBP/USD 1.6140GBP/AUD 1.5145GBP/NZD 2.0362GBP/CAD 1.5630GBP/CHF 1.4214GBP/DKK 8.4472GBP/NOK 8.938GBP/ZAR 11.133GBP/JPY 131.93EUR/USD 1.4242Bank of England minutes and Employment data

The minutes of the BoE's May meeting showed an unchanged 6-3 majority seeing no need for an increase in UK interest rates, but two of the hawks, Spencer Dale and Martin Weale, said their decisions were finely balanced.

Also yesterday figures showed the number claiming unemployment benefit unexpectedly rose in April, posting its biggest rise in more than a year.

The news caused Sterling to fall against the Euro, and also to a 6 week low vs the US Dollar. Sentiment remains weak for the Pound, with most analysts exp…

Sterling weak despite high inflation/BoE Minutes today

18th May 2011
Good morning. High inflation figures yesterday gave Sterling a boost, however the gains were short lived. Rates this morning have already started to fall, as investors acknowledged that higher inflation for now was unlikely to lead to an interest rate rise before year-end. Today we have the BoE minutes, which we'll look at in more detail after the usual rate snapshot as at 08:30am this morning:
GBP/EUR 1.1379GBP/USD 1.6249GBP/AUD 1.5273GBP/NZD 2.0599GBP/CAD 1.5771GBP/CHF 1.4293GBP/ZAR 11.222GBP/JPY 131.80GBP/HUF 304.06GBP/DKK 8.4853EUR/USD 1.4275High inflation for the UK, but Sterling remains weak

The UK Consumer Prices Index (CPI) annual rate of inflation rose to 4.5% in April, up from 4% in March.The rise in CPI was bigger than analysts had forecast and follows a surprise fall in the index last month.

CPI is now at its highest level since October 2008. The increasing pressure to raise rates following the jump in inflation was reflected in the currency markets, where th…

Weak data this week could hurt Sterling

17th May 2011
Good morning. Sterling fell against the euro yesterday and was seen vulnerable before UK data this week, including inflation and jobs numbers, which could add to the view that interest rates will stay on hold in the coming months. EU debt worries however are pulling rates back the other way this morning, and at 08:30am rates are as follows:
GBP/EUR 1.1462GBP/USD 1.6241GBP/AUD 1.5321GBP/NZD 2.0780GBP/CAD 1.5831GBP/CHF 1.4377GBP/ZAR 11.333GBP/JPY 132.18GBP/HUF 306.54GBP/NOK 9.0622EUR/USD 1.4164Data this week that could push Sterling down

Economic data today is expected to show inflation up in April vs March, but most in the market believe recent signs of a shaky UK economy will prevent the Bank of England from raising rates from historic lows soon.

Jobs data on Wednesday and retail sales numbers on Thursday could add to this view, while the release of BoE meeting minutes on Wednesday will be watched closely for any shift in tone from policymakers.

EU debt worries could push th…

Pound vs Euro / Pound vs USD forecast predictions 2011

In this week’s Report:
Interest Rates still driving GBP/EURMixed UK economic figures create uncertaintyPound vs. US Dollar retreats from 18 month highRound up of the week’s data that may affect rates(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week saw a number of volatile swings on the Sterling Euro cross with both currencies attempting to establish a trend over the other on the back of bullish data releases and official statements. Early in the week Sterling made gains over the single currency with decent retails sales figures overshadowing the expected slight fall in house prices. Indeed the fact that the B of E’s inflation report and Mervyn Kings’ following speech were viewed by many analysts as more hawkish than other recent B of E statements pushed the Pound up further against the Euro on Wednesday.

Investors are mainly occupied with thoughts of interest rates at present, attempting to predict who will be the next to push their …

Sterling hits 6 week high vs Euro on BoE Inflation report

12 May 2011
Good morning. What a difference a week makes... This time last Thursday GBP/EUR rates were at a 13 month low of €1.1050, but with yesterdays bullish inflation report from the Bank of England, rates have climbed significantly, as you can see in the daily rate snapshot:
GBP/EUR 1.1477GBP/USD 1.6328GBP/AUD 1.5360GBP/NZD 2.0699GBP/CAD 1.5739GBP/CHF 1.4470GBP/ZAR 11.248GBP/JPY 132.35GBP/NOK 8.946GBP/DKK 8.555EUR/USD 1.4225Pound hits 6 week high vs Euro on BoE inflation report

Sterling climbed to a 6 week high against the Euro yesterday, after the Bank of England raised its inflation forecasts. This led markets to bring forward the possible timing of an interest rate hike, and as a result Sterling surged against other currencies.

Some analysts have said that with weakness in the Euro also caused by EU debt fears, rates could continue to climb higher. However, others said the pound's rally could reverse as it has not fully priced in lowered interest rate expectations, with sterl…

BoE Inflation report could affect GBP exchange rates

11th May 2011
Good morning. Exchange rates remained fairly stable yesterday, with little economic data of note being released. Today however we have some key UK data which could change things, which we'll look at in a moment after the usual snapshot of rates as at 08:30am:
GBP/EUR 1.1381GBP/USD 1.6359GBP/AUD 1.5069GBP/NZD 2.0604GBP/CAD 1.5641GBP/CHF 1.4404GBP/JPY 132.05GBP/ZAR 11.087GBP/DKK 8.4842GBP/NOK 8.8777EUR/USD 1.4369Key UK data today that could change exchange rates

The Bank of England today will release its quarterly inflation report. This is likely to forecast higher inflation and they will likely defend their decision to keep interest rates at a record low 0.5 %.

Traders said such a view may push back the chances of a UK rate hike and could weigh on sterling, allowing the euro to regain some lost ground against the pound. Recently it's the fact that EU interest rates are going up before the UK that caused GBP/EUR rates to hit a 13 month lows.

So why is Sterling so weak?

Pound set to fall again vs Euro & USD?

10th May 2011
Good morning. Sterling fell against the US Dollar yesterday, due to worries in the EU over debt weakening the Euro and benefiting the USD. The net result is lower GBP/USD rates but slightly higher GBP/EUR rates. As we'll see in a moment though analysts do expect the Pound to fall again this week. At 08:30am rates are as follows:
GBP/EUR 1.1408GBP/USD 1.6374GBP/AUD 1.5187GBP/NZD 2.0659GBP/CAD 1.5774GBP/CHF 1.4376GBP/ZAR 11.025GBP/JPY 132.03GBP/DKK 8.5044GBP/NOK 8.9732EUR/USD 1.4343Pound falls vs US Dollars

The Pound fell to its lowest in nearly three weeks against the US Dollar yesterday, dragged down by falls in the euro against the U.S. currency as a downgrade of Greece's debt worsened euro zone debt worries. The debt worries have also weakened the Euro, and despite the fact last week rates sat at €1.1050, today rates are above €1.14 again due to this weakness.

Sterling to fall again this week?

Many analysts expect sterling to stay under pressure on concerns the Ban…

Weekly GBP/EUR & GBP/USD currency forecast

In this week’s Report:
Pound/Euro finally gains from it’s 13 month low Euro weakens significantly after ECB comments Pound vs US Dollar rates fall from 19 month high Round up of the week’s data that may affect rates(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Despite the short trading week last week the GBP/EUR cross certainly didn’t lack in volatility with the total movements between the currencies amounting to approximately 3% over the week.

Early in the week Sterling fell to a 13-month low against the euro after a raft of data releases showed a patchy British economic recovery, this in turn suggested the Bank of England would not raise interest rates soon. The pound fell to 1.1048, its lowest since March 2010, as markets continued to factor in diverging rate outlooks with further hikes expected this year in the euro zone.

Analysts said further near-term gains were likely for the euro but the currency was reaching levels that may be uns…

Pound gains almost 2% against Euro

6th May 2011
Good morning. Well, after weeks of GBP/EUR rates falling, we saw a significant gain in rates yesterday after the Euro weakened. We'll look at the reasons why after the usual rate snapshot, as at 08:30am:
GBP/EUR 1.1270GBP/USD 1.6373GBP/AUD 1.5346GBP/NZD 2.0822GBP/CAD 1.5825GBP/CHF 1.4271GBP/ZAR 11.020GBP/JPY 131.60GBP/HUF 298.70EUR/USD 1.4526Pound vs Euro rates gain nearly 2%

Yesterday both the Bank of England (BoE) and European Central Bank (ECB) left interest rates on hold as expected. It was the comments from the ECB president, Jean Claude Trichet, that caused the Euro to weaken and rates to rise.

He offered a much less hawkish tone on the central bank's rate outlook than markets had been expecting after April's hike, prompting traders to book profits on the euro's gains versus sterling after weak UK services data earlier in the day drove the pound lower against the common currency.

"The ECB sounded more dovish at its press conference, which is weighing…

GBP at 13 month low vs EUR ahead of interest rate decisions

5th May 2011
Good morning. Sterling slipped to a fresh 13-month low against the euro on Wednesday after weak British construction figures boosted views UK interest rates could stay on hold till year-end, in contrast to a hawkish euro zone outlook. At 08:30am this morning rates are as follows:
GBP/EUR 1.1104GBP/USD 1.6529GBP/AUD 1.5405GBP/NZD 2.0869GBP/CAD 1.5831GBP/CHF 1.4151GBP/ZAR 10.966GBP/JPY 132.63GBP/HUF 293.33GBP/DKK 8.2791EUR/USD 1.4885Pound remains weak against Euro

So why is Sterling so low against the Euro? It's all to do with interest rate expectations. Recent figures have meant analysts are now pricing in a rate hike from the Bank of England around the end of the year, while the European Central Bank is expected to raise rates for the second time this year by July.

Higher interest rates generally strengthen a currency as it provides more return for investors. As EU rates are now likely to rise well before the UK, the Euro is gaining against the Pound and this is why rates…

Pound hits 13 month low vs Euro

4th May 2011
Good morning. Sterling fell to its lowest in over 1 year against the Euro yesterday, and also fell against the dollar after disappointing UK manufacturing data prompted investors to push back forecasts of a UK interest rate rise. At 08:30am this morning rates are as follow:
GBP/EUR 1.1112GBP/USD 1.6512GBP/AUD 1.5186GBP/NZD 2.0775GBP/CAD 1.5731GBP/CHF 1.4231GBP/JPY 133.74GBP/ZAR 9.8280GBP/NOK 8.6920GBP/DKK 8.2850EUR/USD 1.4858Sterling falls on Manufacturing data

The UK's manufacturing sector grew at its weakest pace for seven months in April, a survey suggests."There was a dip in the output prices component, but it is still the third-highest index reading since the series began in 1999," said James Knightley from ING Financial Markets.

"Consequently, the issue of weak growth and high inflation will continue to trouble the Bank of England (BoE). Given they have a mandate of targeting 2% inflation in two years' time, the worrying outlook for growth favours…