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Showing posts from June, 2011

Pound/Euro lower following Greek vote/ECB comments

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Thursday 30th June 2011
Good morning. Following the passing of the Greek vote on austerity measures, the Euro has stabilised and this has pushed GBP/EUR rates down. Also comments from the ECB president this morning signal interest rates are going up in the EU next week, this is likely to push exchange rates to buy Euros even lower. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1095
• GBP/USD 1.6091
• GBP/AUD 1.4984
• GBP/NZD 1.9400
• GBP/CAD 1.5556
• GBP/CHF 1.3409
• GBP/ZAR 10.865
• GBP/JPY 129.29
• GBP/DKK 8.2737
• GBP/NOK 8.6317
• EUR/USD 1.4500

Greek vote on Austerity measures strengthens Euro

Yesterday the vote was narrowly won to push through austerity measures in return for financial aid. The package of tax rises and budget cuts worth about 28bn euros over five years, had been championed by Greek Prime Minister George Papandreou.

If it had been rejected, Greece could have run out of money within weeks. The EU and the International Monetary Fund have demanded that the measures ar…

Sterling hits 2 month low vs Euro

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Wednesday 29th June 2011
Good morning. Sterling has hit a 2 month low vs the Euro this morning, as the single currency has gained significant support ahead of the Greek vote on austerity measures. At 08:30am this morning rates are as follows:



GBP/EUR 1.1116
GBP/USD 1.6008
GBP/AUD 1.5133
GBP/NZD 1.9590
GBP/CAD 1.5680
GBP/CHF 1.3289
GBP/ZAR 10.941
GBP/JPY 129.65
GBP/DKK 8.2875
GBP/NOK 8.6686
EUR/USD 1.4396Sterling hits 8 week low vs Euro

The pound is at a 2 month low vs the Euro this morning, and the lowest in over a year against a currency basket. This is because the Bank of England have renewed the possibility of further Quantitative Easing and data showing very slow growth in the UK.

We saw figures yesterday showing that the economy only grew by 0.5% in the first quarter, and annual growth has also been revised down. The UK data added to the view that UK interest rates are likely to stay at their record low 0.5 percent well into next year. Also some BoE policymakers, speaking in parliamentary test…

Sterling down against EUR & USD

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Tuesday 28th June 2011
Good morning. Sterling has dropped to a 5 month low vs the US Dollar, after the US currency strengthened on it's safe haven status, following renewed concerns over the EU debt crisis. Sterling is also likely to remain under pressure in the coming weeks as the BoE consider further Quantitative Easing. At 08:30am this morning rates are as follows:



GBP/EUR 1.1172
GBP/USD 1.5976
GBP/AUD 1.5254
GBP/NZD 1.9802
GBP/CAD 1.5744
GBP/CHF 1.3328
GBP/ZAR 10.944
GBP/JPY 129.10
GBP/DKK 8.3310
GBP/NOK 8.7510
EUR/USD 1.4303Pound down against Euro and US Dollar

As stated above, the US Dollar has strengthened on it's safe haven status, pushing rates to a 5 month low. Against the euro, sterling also lost ground with the common currency lifted by a bout of short-covering and signs of progress on a scheme to make private bondholders share the burden of any Greek debt solution.

Despite this, euro zone peripheral bond yield spreads widened and kept investors edgy ahead of Tuesday's Greek…

Weekly GBP/EUR & GBP/USD update forecast

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In this week’s Report:

• Bank of England minutes causes fall for Sterling
• Chance of further Quantitative Easing for the UK
• Greek debt keeps Euro weak, limiting GBP/EUR drop
• 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 finished last week over half a cent down against the euro from the start of the week but almost 1 cent better than the lowest point of trading midweek. Last weeks key UK data and indeed the biggest drop came following the minutes of the Bank of England meeting, held at the beginning of the month, which of course showed a 7-2 split in favour of keeping rates on hold.











However, with exit of Andrew Sentence from the committee and the addition of Ben Broadbent the minutes were interpreted as being particularly dovish. As a result, the money markets are now not pricing in a BoE rate rise until July or August 2012, while only a few months ago the expectation was for two ra…

Sterling falls to 8 month low vs currency basket

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Friday 24th June 2011
Good morning. Sterling has fallen to a 3 month low vs the US Dollar, and an 8 month low vs a basket of currencies, due to the fact the Bank of England may pursue more Quantitative Easing. At 08:30am this morning rates are as follows:

GBP/EUR 1.1235
GBP/USD 1.5958
GBP/AUD 1.5182
GBP/NZD 1.9653
GBP/CAD 1.5648
GBP/CHF 1.3380
GBP/ZAR 10.958
GBP/JPY 128.55
GBP/DKK 8.3792
GBP/NOK 8.7508
EUR/USD 1.4203Sterling continues to fall on QE fears

A darker economic outlook from the BoE as outlined in this weeks MPC minutes prompted a sell-off in the pound. This is on speculation that ongoing economic weakness would keep the BoE from raising rates until well into 2012. Sterling also came under pressure as investors cut exposure to riskier assets after Federal Reserve Chairman Ben Bernanke cut the Fed's U.S. growth forecast and on persistent uncertainty about Greece's debt crisis.

"Risk-off sentiment and the increased possibility of more QE in the UK is encouraging sterling lowe…

Sterlng falls sharply on BoE minutes

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Thursday 23rd June 2011
Good morning. Sterling had a very poor day yesterday, falling broadly against other currencies after the Bank of England minutes showed there may be further Quantitative Easing and no chance of an interest rate hike any time soon. Today we will look at why the Pound has fallen so much against the Euro, and the prospects for the coming weeks. At 08:30am this morning rates are as follows:

GBP/EUR 1.1226
GBP/USD 1.6025
GBP/AUD 1.5208
GBP/NZD 1.9660
GBP/CAD 1.5590
GBP/ZAR 10.856
GBP/JPY 129.01
GBP/DKK 8.3720
GBP/NOK 8.7629
EUR/USD 1.4270Sterling falls on Bank of England minutes

Yesterday the minutes to the recent BoE decision to hold rates showed the 9 member committee voted 7-2 to hold rates. The new member Ben Broadbent voted to hold rates, in stark contrast to his predecessor who had consistently voted to raise rates. This signalled that interest rates in the UK are likely to remain low for some time, and there is now a greater chance of more Quantitative Easing.

Sterling f…

Sterling falls on BoE members comments

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Wednesday 22nd June 2011
Good morning. Sterling fell against the Euro and US Dollar yesterday, after one of the Bank of England policy makers said there may have to be more Quantitative Easing in the UK, due to poor Pubic finance data and a fragile economic recovery. At 08:30am this morning rates are as follows:



GBP/EUR 1.1263
GBP/USD 1.6229
GBP/AUD 1.5295
GBP/NZD 1.9929
GBP/CAD 1.5760
GBP/CHF 1.3647
GBP/ZAR 10.868
GBP/JPY 130.11
GBP/HUF 300.21
GBP/DKK 8.4002
EUR/USD 1.4405
Sterling falls on Paul Fishers comments

Yesterday ths policy maker at the Bank of England painted a very gloomy picture of the UK economy, saying the economic recovery remains fragile and more monetary stimulus may be required in the UK. His comments caused investors to sell the Pound and as a result Sterling took a sharp fall against other currencies.

Investors are now not expecting a UK interest rate hike until next year, while the Eurozone is likely to raise their interest rates in July this year. This means the better return …

Pound vs Euro lower as markets calmer on EU debt

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Tuesday 21st June 2011
Good morning. Sterling has climbed against the US Dollar, but dropped against the Euro. Why? It's because a top EU policy maker has calmed fears about stability in the region, strengthening the Euro and weakening the US Dollar. We'll look at this in detail after the usual snapshot of rates as at 08:30am:


GBP/EUR 1.1304
GBP/USD 1.6231
GBP/AUD 1.5339
GBP/NZD 1.9929
GBP/CAD 1.5847
GBP/CHF 1.3677
GBP/ZAR 10.950
GBP/JPY 130.11
GBP/DKK 8.4302
GBP/NOK 8.9616
EUR/USD 1.4357
EU debt fears calmed and Euro strengthens
Yesterday Eurogroup chairman Jean-Claude Junker made comments that have calmed the markets meaning countries such as Ireland and Portugal can re-enter the markets. The comments were made in a meeting where finance ministers are discussing the bailout funds for countries such as Greece.
So what have the analysts said may be the effect on GBP/EUR rates? "The market overreacted this morning to news of the euro zone finance ministers' meeting. There are some h…

Pound vs Euro/Pound vs US Dollar weekly forecast

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Monday 20th June 2011

• Poor UK data puts Sterling on back foot
• Greek debt weakens the Euro
• US Dollar strengthens on safe haven status
• 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;

Last week began with a bank holiday for Europe’s strongest economies France and Germany whilst Sterling hit its strongest levels in more than a week against the euro, helped by euro zone debt concerns. Sterling pared brief gains made against the euro on Tuesday after UK inflation data came in as forecast, giving investors little reason to believe the Bank of England will raise interest rates any time soon.















Wednesday saw mixed fortunes for Sterling. A fall after UK employment data showed the number of Britons claiming unemployment benefits rose sharply at their fastest pace in two years, then a rise as credit agency Moody’s said it would review the credit ratings of BNP Paribas, France's biggest bank, and its…

Poor Retail Sales hurts Sterling, but Greek debt supports GBP/EUR

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17th June 2011
Good morning. Sterling fell slightly during trading yesterday, after Retail Sales figures were very disappointing indeed, and this weakened the Pound. It's very clear that the Bank of England will not be raising interest rates for some time, and this news pushes back the chances of a hike even further.

Interest Rates

Most analysts now expect the Bank of England to push up interest rates in June 2012. This is nearly a year away, and is likely to keep Sterling very weak indeed. As I've stated several times in the last few weeks, the EU are likely to raise their interest rates several times this year, and that's going to strengthen the Euro and make it more expensive to purchase.

So why hasn't the GBP/EUR rate fallen that much?

It's to do with the debt problems. On economic figures alone, it's clear that the UK economy is going to get worse before it gets better. However the debt problems with Greece have weakened the Euro slightly, so this is limiting t…

Pound goes up vs Euro due to Greek debt

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16th June 2011
Good morning. Sterling fell against all currencies except the Euro yesterday, after poor jobs data and slow wage growth added to the view interest rates are going nowhere in the near term. The Euro however weakened significantly on Greek debt concerns, pushing GBP/EUR rates through the €1.14 level. At 08:30am this morning rates are as follows:



GBP/EUR 1.1433
GBP/USD 1.6157
GBP/AUD 1.5326
GBP/NZD 2.0103
GBP/CAD 1.5854
GBP/CHF 1.3757
GBP/ZAR 11.042
GBP/JPY 130.20
GBP/HUF 305.72
GBP/DKK 8.5248
EUR/USD 1.4131
Weak jobs data hurts Sterling
Yesterday the office for national statistics (ONS) showed that more than double the amount of people claiming jobless benefit that forecasts had suggested. This shows that the UK recovery is still on very shaky ground, and as a result Sterling dropped against nearly all major currencies.
Sterling Euro rates rise
Against the Euro however GBP/EUR rates rose due to fears over Greek debt. It's to do with the EU banking system; Moody's the ratings agen…

Pound vs Euro will the rate go up?

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15th June 2011
Good morning. UK inflation figures yesterday offered little reason to believe the Bank of England will raise interest rates any time soon, and as a result Sterling fell slightly and struggled vs other currencies. At 08:30am this morning rates are as follows:



GBP/EUR 1.1385
GBP/USD 1.6351
GBP/AUD 1.5286
GBP/NZD 2.0066
GBP/CAD 1.5814
GBP/ZAR 11.074
GBP/JPY 131.78
GBP/DKK 8.4933
GBP/NOK 8.8843
EUR/USD 1.4355
UK Inflation / Interest Rates
Inflation rose to 4.5% yesterday, in line with analysts expectations. Despite this being well above the governments target of 2%, it's unlikely the Bank of England will raise interest rates to combat this due to the effect it would have on the economic recovery.
The BoE has repeatedly warned that inflation could get as high as 5% before retreating, and the fact interest rates will stay low despite this is keeping the Pound weak.
With other central banks such as the EU expected to raise interest rates several times this year, the differential is lik…

Sterling at 1 week high vs Euro

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14th June 2011
Good morning. The pound has risen to a 1 week high vs the Euro. This is due to Greece having it's credit rating downgraded, causing concerns again over EU debt which has weakened the Euro slightly. There are also inflation figures for the UK today which are expected to be high, increasing the chance of a UK interest rate hike and strengthening Sterling. At 08:30am this morning rates stand as follows:


GBP/EUR 1.1360
GBP/USD 1.6423
GBP/AUD 1.5444
GBP/NZD 2.0074
GBP/CAD 1.5999
GBP/CHF 1.3732
GBP/ZAR 11.066
GBP/JPY 131.90
GBP/HUF 300.31
GBP/DKK 8.4725
EUR/USD 1.4452Greek debt worries weaken the Euro

EU policy makers are thrashing out an agreement on whether private investors should take part in the restructuring of Greek debt. This ongoing debt worries in the EU have weakened the Euro very slightly, pushing GBP/EUR to a 1 week high. The ongoing EU finance summit is discussing this and other issues that could affect the value of the Euro.

UK Inflation data today

Concerns about the UK e…

Pound vs Euro Forecast/Outlook Predictions for 2011

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13th June 2011
Good morning. As usual for a Monday, we're going to take a detailed look at Sterling vs Euro exchange rates, the movements over the last week, and where GBP/EUR rates may head for the remainder of 2011. Thisoutlook forecast can help you make the decision on when to buy your Euros and help you achieve the best exchange rates for Euros.

Sterling vs. Euro;

Last week was a volatile one for the Sterling/Euro cross, hitting a 1 month low before making a muted recovery later in the week. In just the last 10 days alone rates have fluctuated from highs of €1.1550 to lows in the €1.11’s. This represents a difference of more than £6000 on a €200,000 currency purchase, clearly illustrating just how volatile the currency markets can be:













Last week started with a warning from the International Monetary Fund (IMF) on UK growth. The IMF's annual economic assessment said the UK economic recovery was broadly on track but more quantitative easing may be required if growth continues to …

Effect of Interest Rates on Exchange Rates

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10th June 2011
Good morning. Both the UK and EU left interest rates on hold yesterday as expected, but the EU signalled rates would rise in July. We'll take a detailed look in a moment on how this may affect exchange rates in the coming months. First, the usual snapshot of rates as at 08:30am:


GBP/EUR 1.1260
GBP/USD 1.6271
GBP/AUD 1.5354
GBP/NZD 1.9742
GBP/CAD 1.5876
GBP/CHF 1.3711
GBP/ZAR 10.997
GBP/JPY 130.20
GBP/DKK 8.3965
GBP/NOK 8.8654
EUR/USD 1.4448
UK Interest Rates
The Bank of England yesterday left interest rates on hold for the 27th month in a row. This is due to stagnant growth. Most analysts now don't expect interest rates to go up until well into 2012, and as such Sterling is likely to remain weak.
Higher interest rates strengthen a currency due to the higher return attracting investors to the currency. As rates are at a record low and likely to remain so for quite some time, Sterling will remain weak.
EU Interest Rates
The ECB also left interest rates on hold, however in the pr…

Sterling recovers against Euro/Interest Rates today

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9th June 2011
Good morning. Yesterday Sterling fell on rumours that Moody's would downgrade the UK's credit rating. However these comments have now been downplayed and Sterling has recovered slightly. Today we have interest rate decisions for the UK and EU. At 08:30am this morning rates are as follows:


GBP/EUR 1.1234
GBP/USD 1.6444
GBP/AUD 1.5506
GBP/NZD 2.0010
GBP/CAD 1.6083
GBP/CHF 1.3762
GBP/ZAR 10.980
GBP/JPY 131.76
GBP/DKK 8.3773
GBP/NOK 8.8377
EUR/USD 1.4634
Moody's Comments downplayed
Yesterday a media report had quoted a Moody's analyst saying the UK was at risk of losing its good credit rating. This caused Sterling to fall significantly against other currencies. However as it was not an official announcement, as I said in yesterdays post, the losses were short lived.
They have said that the outlook for the UK remains stable, however did also say that weaker growth in the UK could lead to a reassessment.
Interest Rate decisions today
Both the UK and EU announce their interest …

Pound falls again vs Euro on Moodys downgrade warning

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8th June 2011
Good morning. Sterling has continued to fall vs the Euro on UK data that shows growth is very slow, adding to the view that softness in the economy will keep UK interest rates on hold for the foreseeable future. Also this morning Moody's has warned the UK risks having its credit rating downgraded, pushing the Pound lower. At 08:30am this morning rates are as follows:



GBP/EUR 1.1146
GBP/USD 1.6369
GBP/AUD 1.5345
GBP/NZD 2.0043
GBP/CAD 1.6001
GBP/CHF 1.3676
GBP/ZAR 10.989
GBP/JPY 130.76
GBP/DKK 8.3103
GBP/NOK 8.7555
EUR/USD 1.4680
Moody's warns on UK Credit Rating
Sterling has fallen to a new one month low versus the euro and slid to a session low against the dollar this morning, on a media report of a Moody's warning that the UK could lose its AAA rating. The report quoted the rating agency as saying the UK could lose its top-notch rating if growth remained weak and the government failed to meet its fiscal consolidation targets.
It should be noted however that this was simpl…

IMF assesment pushes GBP/EUR to 1 month low

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7th June 2011
Good morning. Sterling fell again vs the Euro yesterday, hitting a new 1 month low. It was due to the IMF giving a muted reaction to UK growth, stating further Quantitative Easing may be required. At 08:30am this morning rates are as follows:

GBP/EUR 1.1202
GBP/USD 1.6400
GBP/AUD 1.5330
GBP/NZD 2.0014
GBP/CAD 1.6013
GBP/ZAR 11.058
GBP/JPY 131.58
GBP/CHF 1.3676
GBP/NOK 8.7774
GBP/DKK 8.3526
EUR/USD 1.4634
IMF annual assessment weakens SterlingThe IMF's annual economic assessment said the UK economic recovery was broadly on track but more quantitative easing may be required if growth continues to be weak.

The news weakened Sterling and pushed exchange rates lower. This combined with expectations the European Central Bank will flag an interest rate hike at its meeting on Thursday, helped the euro shrug off lingering worries over Greek debt and caused Strength in the single currency.

The combined effect was the GBP/EUR rate dropping into the €1.11's which is now the lowest in over…

GBP/EUR & GBP/USD Forecast Outlook June 2011

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Good morning. As usual for a Monday, we'll take a detailed look at the past week and future weeks prospects for Sterling exchange rates. In this week’s Report:

• Pound falls to 4 week low vs. Euro
• US Jobs Data affects GBP/USD rates
• EU and UK Interest Rate Decisions this week
• 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 slipped to a four-week low against a broadly supported Euro on Friday, and the UK currency risked more selling as UK services sector PMI rounded off a week of largely dismal data for the UK economy, which has hurt Sterling by bolstering the view that a sluggish recovery will keep UK interest rates low for months to come. The Euro ended the week nearly 2 percent higher versus Sterling, its best weekly performance since October, as the single currency has clawed back from losses in May, when it was sold on rising concerns about Greece's debt problems.…