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Showing posts from September, 2011

Sterling at risk of slide due to QE

Friday 30th September 2011
Good morning. Sterling was at a 1 week high against the dollar yesterday, and was up very slightly against the euro. This was due to the Swiss National Bank saying they would look to increase its foreign exchange reserves of sterling assets next year, creating some support for the Pound. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1512
• GBP/USD 1.5547
• GBP/AUD 1.5967
• GBP/NZD 2.0365
• GBP/CHF 1.4036
• GBP/CAD 1.6196
• GBP/ZAR 12.427
• GBP/JPY 119.16
• GBP/DKK 8.5662
• GBP/NOK 9.0841
• EUR/USD 1.3500

Sterling holding firm against USD and EUR, but gains likely to be limited

Despite the decent support we've seen for Sterling this week, we still think that any gains for the Pound are likely to be capped and limited, given concerns about a fragile UK economy and its vulnerability to any escalation of the euro zone debt crisis. Also, as we've been talking about all week, there are market expectations that the Bank of England will soon launch another rou…

Sterling vs Euro Outlook Forecast October 2011

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Thursday 29th September
Good morning. Sterling was range bound against the US Dollar yesterday, and down slightly on the Euro. This is because risk appetite has been boosted by optimism that policymakers could stave off a Greek default for the time being, however signs the Bank of England may adopt more stimulus measures is keeping the Pound in check. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1481
• GBP/USD 1.5634
• GBP/AUD 1.5920
• GBP/NZD 2.0063
• GBP/CHF 1.4012
• GBP/CAD 1.6112
• GBP/ZAR 12.278
• GBP/JPY 119.57
• GBP/DKK 8.5432
• GBP/NOK 9.0105
• EUR/USD 1.3611

Sterling down vs the Euro

The pound was down slightly versus the euro during trading yesterday. The single currency has been supported on news that leaders are resuming their mission to Greece today, and that euro zone finance ministers will meet again in October to discuss the release of more aid . This strengthened the Euro and made it more expensive to purchase.

Also hampering the Pound is the continued speculation that …

Sterling up as IMF and ECB try to resolve debt crisis

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Wednesday 28th September 2011
Good morning. Sterling rose against the Euro and US Dollar slightly. This was due to cautious optimism that policymakers were putting together measures to ease the euro zone debt crisis. This supported demand for riskier currencies such as the Pound, and this is why we're up slightly, however as we will see shortly it's not likely to continue. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1502
• GBP/USD 1.5656
• GBP/AUD 1.5783
• GBP/NZD 1.9875
• GBP/CHF 1.4036
• GBP/CAD 1.6000
• GBP/ZAR 12.242
• GBP/JPY 119.69
• GBP/DKK 8.5597
• GBP/NOK 8.9846
• EUR/USD 1.3603

Optimism over Greek debt boosts risky currencies

European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) officials are expected to review progress today in cutting its debt levels. They will decide whether to release about 8bn euros from a 110bn bailout package agreed last summer.

There has been renewed optimism this week that eurozone leaders may finally be ready…

Pound rises against Euro and Dollar, but gains limited

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Tuesday 27th September 2011
Good morning. Sterling rose against both the Euro and US Dollar yesterday, as a UK bank had to convert significant sums to Sterling, strengthening the currency. The Pound rose against the Euro on talk of further plans to help Greece with it's debts. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1502
• GBP/USD 1.5574
• GBP/AUD 1.5742
• GBP/NZD 1.9761
• GBP/CHF 1.4042
• GBP/CAD 1.5970
• GBP/ZAR 12.349
• GBP/JPY 118.92
• GBP/DKK 8.5560
• GBP/NOK 8.9574
• EUR/USD 1.3538

Sterling rises against Euro & US Dollar

The Euro weakened slightly yesterday, on the news that Greek Prime Minister George Papandreou will hold talks with Angela Merkel to discuss his country's progress in cutting its budget deficit. The meeting comes as policymakers decide whether to release the latest tranche of Greek bailout funds.

European leaders are trying to agree a comprehensive package to solve the eurozone debt crisis once and for all, however divisions remain between member s…

Weekly GBP/EUR & GBP/USD and weekly economic data

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Good morning. As usual for Monday's, today we'll take a look at how the currency markets fared last week, with a detailed look at Sterling vs Euro and Sterling vs US Dollar exchange rates.

In this week’s Report:

• GBP/USD falls to 1 year low
• Eurozone crisis continues
• Safe Haven currencies gaining strength
• 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;
An all too familiar week for the Sterling Euro cross saw a high of 1.1526 and a low of 1.1373 as concerns about the Euro play off against a weak pound, currently governed by further talks of Quantitative Easing. Mediocre data releases continue to have less effect on a market currently driven heavily by investor movement and risk aversion.













Greece continues to play a leading role in Eurozone developments, despite its inferior percentage share of the Eurozone economy as a whole. With the French and Germans in particular heavily invested in…

Why are Sterling/Euro & Dollar exchange rates falling?

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Friday 23rd September 2011
Good morning. It was a very volatile day in the currency markets yesterday. Notably the GBP/USD exchange rate dropped to a 1 year low, after the Federal Reserve warned about significant downside to the U.S. economy and triggered broad risk aversion in financial markets.

As the Dollar is a safe haven currency, it strengthened. The 1 year low is even more remarkable when you consider just a few weeks ago it was near a 2 year high! This is how rates fared throughout trading yesterday:












Markets fall as FED and others warn on growth

Yesterday the Federal Reserve warned that the US economy faced significant downside risks. The news sparked panic in the markets, and was one of only a series of grim warnings about the global economy.

Christine Lagarde, head of the International Monetary Fund, said the economic situation was entering a "dangerous place". Earlier, the president of the World Bank, Robert Zoellick, said the world's economy was "in a danger …

Sterling falls after BoE minutes signal QE

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Thursday 22nd September 2011
Good morning. Sterling fell to a new 8 month low against the US Dollar, fell below the €1.14 level vs the Euro and hit a 2 and a half year low versus the yen yesterday. This was after Bank of England minutes showed an increasing chance the central bank will soon opt for more monetary easing, as we predicted in yesterdays post. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1416
• GBP/USD 1.5465
• GBP/AUD 1.5485
• GBP/NZD 1.9479
• GBP/CHF 1.4019
• GBP/CAD 1.5700
• GBP/ZAR 12.586
• GBP/JPY 118.33
• GBP/DKK 8.4977
• GBP/NOK 8.9457
• EUR/USD 1.3548

Sterling falls on Bank of England (BoE) minutes

Yesterday the BoE released the minutes to the recent decision to hold interest rates, and hold off on further Quantitative Easing. Adam Posen voted for an extra 50 billion pounds in asset purchases but the minutes showed most members felt it was increasingly likely more asset purchases would be warranted at some point. As a result, Sterling fell across the board during tr…

Sterling at risk of fall due to Quantitative Easing

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Wednesday 21st September 2011
Good morning. Sterling remains near 8 month lows vs the US Dollar, but was up slightly against the Euro following the downgrade of Italy's credit rating. More losses for the Pound are expected today if the Bank of England (BoE) minutes show Quantitative Easing (QE) is discussed. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1480
• GBP/USD 1.5691
• GBP/AUD 1.5299
• GBP/NZD 1.9095
• GBP/CHF 1.4016
• GBP/CAD 1.5613
• GBP/ZAR 12.204
• GBP/JPY 119.72
• GBP/DKK 8.5485
• GBP/NOK 8.8934
• EUR/USD 1.3665

Sterling at risk of a drop due to Quantitative Easing

At 09:30am this morning we will see the minutes to the recent Bank of England minutes. We already know that interest rates were left on hold. What we will be looking for is any sign QE was discussed at the meeting. If it was, then this will weaken the Pound as it will show that QE is the only method the BoE has to try and stimulate the economy. Quantitative Easing is explained here on the Bank of England site

Sterling falls against Euro & USD on QE concerns

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Tuesday 20th September 2011
Good morning. Sterling fell against both the Euro and US Dollar yesterday. This is due to uncertainty in Europe pushing investors back to the safe haven US Dollar. GBP/EUR rates fell as there are concerns there may be mention of Quantitative Easing by the Bank of England this week. This is how rates fared for GBP/EUR and GBP/USD during trading yesterday:










Pound falls to 8 month low vs US Dollar

Sterling hit a new 8 month low against the dollar yesterday, tracking losses in the euro which fell as concerns over policymakers' lack of progress on the euro zone debt crisis fuelled demand for the relative safe haven of the greenback. The increased demand for the USD strengthened it, making it more expensive and pushing GBP/USD rates down.

"There is increasing uncertainty over where the policy response in the euro zone crisis is going to come from, which means safety first as people continue to sell equities and the dollar is king," said Chris Turner, h…

Weekly GBP/EUR & GBP/USD round-up, and weekly data

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Monday 19th September 2011 Good morning. It's Monday morning, so let's take stock of movements in GBP/EUR and GBP/USD over the last weeks trading, in our Monday weekly round-up. In this week’s Report:

• Central Banks in Co-Coordinated move
• GBP/EUR falls from 6 month high
• GBP/USD remains near 8 month low
• 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;
Monday morning saw the GBP/EUR reach a six month high of 1.1720 (interbank). As the week progressed, trading rates returned to a more familiar level of around 1.14+ as we have seen over the last couple of weeks.











Speculation of the possible downgrade of French banks at the beginning of the week saw the rates increase. This was shown when the Credit Rating agency Moody’s downgraded two French banks after reviewing their exposure to Greek debt. Credit Agricole was cut from Aa1 to Aa2 and Societe Generale from Aa2 to Aa3. A third bank, BNP P…

Sterling rises on Central Bank move

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Friday 16th September 2011
Good morning. Yesterday evening the worlds central banks have announced a co-ordinated move to try to help the financial system. The central banks are to provide commercial banks with three additional tranches of loans to help ease funding pressures. The news have calmed the markets, and riskier currencies such as the Pound have benefited. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1427
• GBP/USD 1.5761
• GBP/AUD 1.5266
• GBP/NZD 1.9110
• GBP/CHF 1.3780
• GBP/CAD 1.5530
• GBP/ZAR 11.683
• GBP/JPY 120.96
• GBP/DKK 8.5090
• GBP/NOK 8.8291
• EUR/USD 1.3791

Central Banks in co-ordinated move

The move by the Federal Reserve, Bank of England, European Central Bank, Bank of Japan and Swiss National Bank will provide additional lending, and follows fears about the exposure of banks in the EU to eurozone sovereign debt. The debt problems had made the banks reluctant to lend and this in turn has created funding problems.

US and EU banks have been moving funds out of E…

Pound vs Euro Outlook Forecast September 2011

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Thursday 15th September 2011
Good morning. Sterling fell again yesterday against both the Euro and US Dollar, on concerns over the impact of the euro zone's debt crisis on UK economic growth and British. This could force the Bank of England into more Quantitative Easing, and it's this that has pushed the Pound down. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1458
• GBP/USD 1.5750
• GBP/AUD 1.5396
• GBP/NZD 1.9312
• GBP/CHF 1.3808
• GBP/CAD 1.5626
• GBP/ZAR 11.682
• GBP/JPY 120.76
• GBP/DKK 8.5314
• GBP/NOK 8.9444
• EUR/USD 1.3743

Sterling falls to fresh 8 month lows vs US Dollar

Continuing worries over the euro zone's debt problems kept investors wary of riskier currencies such as the Pound, and the Dollar has benefited as it's perceived as a safe haven currency. This has caused significant strength for the USD, and as a result rates have dropped to an 8 month low in the $1.57's. With the Swiss Franc no longer as attractive as it was due to the SNB intervention, w…

Sterling falls further on inflation data & BoE comments

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Wednesday 14th September 2011
Good morning. Sterling slipped further against the US Dollar and Euro yesterday, on concerns the UK banks may be exposed to EU debt. Inflation data and BoE comments also weakened Sterling against other currencies, and at 08:30am this morning rates are as follows:

• GBP/EUR 1.1524
• GBP/USD 1.5715
• GBP/AUD 1.5367
• GBP/NZD 1.9194
• GBP/CHF 1.3870
• GBP/CAD 1.5579
• GBP/ZAR 11.606
• GBP/JPY 120.71
• GBP/DKK 8.5833
• GBP/NOK 8.9061
• EUR/USD 1.3627

Sterling falls on inflation data and BoE comments

Inflation data released yesterday failed to squash speculation the Bank of England may opt for more Quantitative Easing. Also weakening Sterling against other currencies were comments from BoE policymaker Adam Posen, who said the central bank should immediately add more monetary stimulus.

More QE would weaken the Pound as it signals worries about how to stimulate growth in the economy. Other data released yesterday showed an unexpected deterioration in the UK's trade deficit…

Pound falls vs Euro and to 8 month low vs USD

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Tuesday 13th September 2011
Good morning. Sterling fell to a near 8 month low against the US Dollar yesterday, as worries about the euro zone debt crisis spreading boosted demand for the USD. The Pound also fell slightly against the Euro, but remains just above €1.16. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1611
• GBP/USD 1.5819
• GBP/AUD 1.5306
• GBP/NZD 1.9222
• GBP/CHF 1.3983
• GBP/CAD 1.5717
• GBP/ZAR 11.679
• GBP/JPY 121.69
• GBP/DKK 8.6458
• GBP/NOK 8.9840
• EUR/USD 1.3621

Sterling falls against Euro and to 8 month low vs US Dollar

Worries about the Eurozone debt crisis spreading has meant investors moving funds to the safe haven US Dollar. This has strengthened the greenback, pushing GBP/USD rates down to near the lowest in 8 months.

Sterling also fell slightly vs the Euro, after last weeks surge against the single currency. It's due to worries the UK economy is facing contraction, and this is keeping the Pound in check. Also keeping the pound under pressure versus the d…

Weekly GBP/EUR & GBP/USD, plus weekly market data

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Monday 12th September 2011
Good morning. As always on a Monday morning, today we'll take stock of last weeks movements in Sterling vs Euro, Sterling vs US Dollar, and the weeks data that may affect exchange rates this week.



In this week’s Report:

• Pound hits near 6 month high vs Euro
• Sterling down at 2 month low vs US Dollar
• Swiss National Bank peg CHF against Euro
• Most volatile week in currency markets for some time
• 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;

After a relatively slow start to the week, ECB comments on Thursday saw the Pound gain heavily against the Euro, ending the week very near a 6 month high. The Pound made a small advance against the Euro at the start of the week despite PMI services index for August falling from 51.1 to 50.4; the sharpest slowdown since 2001.












Sterling saw a day of disappointing trading against the Euro on Tuesday. The GBP/EUR exchange rate fell …

Pound/Euro rates climb September 2011 - Why?

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Friday 9th September 2011

Good morning. Well, what a difference a day makes! This time yesterday the Pound/Euro rate was €1.1320, with forecasts for it to drop further. Instead, the Euro weakened significantly on the back of the press conference by ECB president Jean Claude Trichet, and this caused GBP/EUR rates to rise by over 1.5% to near €1.15. Today we'll take a look at his comments and what caused the gains. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1497
• GBP/USD 1.5973
• GBP/AUD 1.5036
• GBP/NZD 1.9125
• GBP/CHF 1.3923
• GBP/CAD 1.5795
• GBP/ZAR 11.475
• GBP/JPY 123.68
• GBP/DKK 8.5610
• GBP/NOK 8.6456
• EUR/USD 1.3891

Pound makes significant gains vs Euro
















These charts show the GBP/EUR and GBP/USD rates as they moved throughout the day yesterday. There was a general strengthening of Sterling in the morning as a UK clearer purchased the Pound, creating strength.

Then, we had the BoE decision to hold interest rates, and no mention was made of QE at all. This helped the poun…

Sterling falls on rumour of more QE

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Thursday 8th September 2011
Good morning. Sterling has fallen to an 8 week low this morning against a basket of currencies, on speculation the Bank of England (BoE) may have to pursue more Quantitative Easing (QE) to try to stimulate growth in the economy. We have interest rate decision from the BoE today, and if they do indeed announce QE then Sterling could drop further. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1326
• GBP/USD 1.5934
• GBP/AUD 1.5040
• GBP/NZD 1.9138
• GBP/CHF 1.3727
• GBP/CAD 1.5705
• GBP/ZAR 11.372
• GBP/JPY 123.22
• GBP/DKK 8.4343
• GBP/NOK 8.5712
• EUR/USD 1.4063

Sterling falls on rumour of further Quantitative Easing

Due to continuing poor data showing growth is slow in the UK, many analysts think that the BoE will have no choice other than to pump more money into the economy through Quantitative Easing. A Reuters poll on their website today shows economists expect there is a 35% chance the BoE will resort to another bout of asset purchases to support the fla…

Pound falls against EUR after Swiss National Bank intervene

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Wednesday 6th September 2011
Good morning. Sterling fell yesterday after George Osbourne gave a negative speech on UK growth. The Pound hit a 7 week low against the US Dollar, and also fell vs the Euro after the Swiss National Bank put set a floor on the EUR/CHF rate, causing the biggest one day swing in exchange rates I've ever seen. At 08:30am this morning, rates are as follows:

• GBP/EUR 1.1357
• GBP/USD 1.5984
• GBP/AUD 1.5076
• GBP/NZD 1.9304
• GBP/CHF 1.3702
• GBP/CAD 1.5785
• GBP/ZAR 11.346
• GBP/JPY 123.47
• GBP/DKK 8.4578
• GBP/NOK 8.5112
• EUR/USD 1.4067

Swiss National Bank intervene in exchange rate

The euro rose broadly after the SNB said yesterday it would set a minimum exchange rate target of 1.20 francs to the euro and would enforce it by buying foreign currency in unlimited quantities. Immediately after the announcement, Sterling shot up vs the Swiss Franc, as this chart illustrates:









The rate shot up from 1.28 to 1.38 in a matter of minutes, easily the biggest one day swing in ex…

Weekly GBP/EUR and GBP/USD forecast

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Tuesday 6th September 2011
Good morning. Today we'll take a detailed look at GBP/EUR and GBP/USD rates over the course of the last weeks trading. In this week’s Report:

• Pound slips away on poor data but rallies at end of week
• UK interest rates to remain on hold for some time
• 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;

At the start of the week we saw the GBP/EUR rate reduce for two consecutive trading days to 1.1283. Clients were receiving less Euros for their pounds as the Euro gained ground against Sterling. This movement would have seen a difference of nearly 1000 euros on a £200,000 trade over a two day period.

















Sterling was vulnerable almost across the board this week. UK net lending and money supply data was poor on Tuesday and consumer confidence data remains at very low levels. The euro was on the back foot.

Euro zone annual inflation was unchanged in August while the number of …