Showing posts from February, 2012

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 27th February 2012
Good morning. A new week, and as usual I will take a detailed look at the last weeks movements in Sterling/Euro, Sterling/US Dollar and the forecasts for where rates are headed through 2012. I will also list the weeks economic data releases that I think will have the biggest impact on exchange rates.

In this week’s Report:

• Pound falls to 10 week low vs. Euro
• Dovish BoE Minutes pushes Sterling down
• Greek debt crisis – is it really over?
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

Last week saw the single currency gaining on investor relief that Greece’s second bailout package was agreed by European authorities. The end of the week saw the GBP/EUR Interbank rate around the 1.18 level, and the sharp decline is clearly illustrated in the chart below:

The start of the week saw the Euro strengthen against the Pound as the markets showed renewed optimism towards the Gr…

Sterling falls on Bank of England MPC minutes

Thursday 23rd February 2012
Good morning. The Pound fell across the board yesterday, so the recent peaks are over for now. It was due to the Bank of England minutes, which most analysts, myself included, thought would actually strengthen the Pound due to better data of late. It actually showed the uncertainty over how much QE to pump in to the economy, and this caused Sterling to fall as the charts below show.

~Currency Movements on Wednesday 22nd February 2012~

Bank of England minutes causes Sterling to fall

Yesterday we saw the most recent Bank of England minutes to the decision two weeks ago to hold interest rates, and pump £50bn into the economy through Quantitative Easing. In the minutes it was revealed that 2 members of the Bank of England's Monetary Policy Committee (MPC) wanted even more money pumped into the economy than the £50bn that was agreed earlier this month.

Two of the MPC members voted for a £75bn stimulus to the economy in February, but the other seven disagreed. The…

Greek Bailout and effect on exchange rates

Wednesday 22nd February 2012
Good morning. Yesterday exchange rates were driven by reaction to the Greek bailout, and in general the Pound fell against both the Euro and US Dollar. Today I will take a detailed look at how the Greek bailout could affect exchange rates, and the Pound Sterling forecast for other major currencies for the next few weeks and months. The below charts shows how rates moved throughout the day yesterday.

~Currency Movements on Tuesday 21st February 2012~

EU Greek Bailout and what it means for exchange rates

Yesterday markets were reacting to the fresh bailout which has finally been agreed for Greece. In the latest bailout deal, Greece is to receive loans worth more than 130bn euros, and in return it needs to to reduce its debts and accept an "enhanced and permanent" presence of EU monitors to oversee economic management.

It was widely expected that the deal would go through, and initially there was little to no reaction in terms of exchange rates. Indeed, …

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 20th February 2012
Good morning. As always on a Monday, today I will take a detailed look at movements in the last week against Pound/Euro, Pound/Dollar and the forecast for what might happen with exchange rates this week, in addition to the weeks economic data that might move the markets.

In this week’s Report:
Key deadline on Greek bailout todayBoE Inflation Report strengthens PoundForecast for GBP/EUR and GBP/USDRound up of the week’s data that may affect rates(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Sterling finished in a strong position last week against the Euro following better than expected retail sales and nervousness amongst investors over whether the long awaited Greek Bailout will be approved.

The Euro was also on the back foot on Friday following the resignation of the German President Christian Wulff. He was forced to resign after prosecutors asked for his immunity to be lifted as part of a corruption investigation. …

Pound Euro rates go up Feb 2012 Forecast Outlook

Friday 17th February 2012
Good morning. Sterling gained well against the Euro yesterday as the single currency suffered from delays to a second Greek bailout. The pound was also supported by fresh questions as to whether there would be further UK monetary stimulus. Sterling was also up slightly on the day versus the dollar, as risk sentiment declined over Greece. The below charts show how rates moved throughout the day yesterday.

~Currency Movements on Thursday 16th February 2012~

Doubts over Greek Bailout weakens Euro; Pound/Euro up

Why have Pound/Euro rates gone up? Eurozone finance ministers have demanded much greater oversight of Greece's economy in return for the €130 billion bailout package. In a three-hour conference call this week, the ministers scrutinised Greece's planned budget cuts.

The single currency bloc praised Greece's "substantial progress", but demanded more detail, including a full timeline for implementing the measures. A decision on the bailout i…

Pound breaks €1.20 vs Euro on BoE inflation report

Thursday 16th February 2012
Good morning. Sterling rose against the Euro yesterday on the back of the Bank of England inflation report, pushing a cent higher and breaking through the €1.20 level. Against the Dollar, we ended slightly lower. Today after the snapshot of yesterdays movements I'll cover how Sterling exchange rates may be affected by: The inflation report, UK unemployment, the prospects for UK recovery, and faltering UK growth.

~Currency Movements on Wednesday 15th February 2012~

UK Unemployment

As you can see from the chart above, as trade opened GBP/EUR rates fell due to UK unemployment figures. UK unemployment rose by 48,000 to 2.67 million in the three months to December, official figures have shown, the smallest rise in almost a year. However, the number of claimants was nearly double the forecast, and so Sterling took a hit pushing lower to €1.19 on the Euro and in the $1.56's against the Dollar. The Pounds fortunes were soon to change however, following the Bank…

Pound Sterling Forecast affected by Inflation and Credit Rating

Wednesday 15th February 2012
Good morning.Credit ratings agency Moody's yesterday unnerved investors by warning it could cut the UK's AAA credit rating due to weak growth, and also due to it's exposure to the euro zone debt crisis. As the daily charts show below, this caused GBP/USD to drop significantly, and the GBP/EUR rate also fell, although not by as much.

~Currency Movements on Tuesday 14th February 2012~

Sterling falls on downgrade risks

Why has Pound Euro rate fallen Feb 2012? As mentioned above, the main reason for rate drop other than the UK QE programme and possible Greek bailout, is the credit warning given by Moody's, that has weakened the Pound off slightly this week.

Losses have been limited somewhat however as this isn't a huge surprise and had been a possibility for some time. Because of the strict government austerity measures that have contributed to a poor UK growth outlook, many in the market had been expecting this for some time. It is the first ti…

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 13th February 2012
Good morning. So, the start of a new week in the currency markets, so a review of the last weeks movements is in order, in addition to forecasts for Pound/Euro and Pound/Dollar, and the weeks economic data releases that I think will affect exchange rates.

In this week’s Report:

• Bank of England announce £50bn Quantitative Easing
• Greek Bailout – will they or won’t they?
• Forecasts for GBP/EUR and GBP/USD
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

Events in the euro zone continued to drive currency movements with Sterling beginning the trading week with a rise against the euro as Greek politicians struggled to find a consensus on bailout terms, heightening anxiety over the debt crisis in Europe. Failure to secure a second bailout would result in an unruly default by Greece on its sovereign debt.

Last week’s run of positive UK economic data gave some added support …

Sterling vs Euro exchange rate forecast 2012

Friday 10th February 2012
Good morning. As I predicted in yesterdays post, the Bank of England announced a further £50 billion in Quantitative Easing, and left interest rates on hold, as did the European Central Bank. Despite a temporary gain for the Pound in the immediate aftermath of the announcement, rates fell back away and ended the day largely unchanged, as yesterdays graphs demonstrate:

~Currency Movements on Thursday 9th February 2012~

Central Bank announcements as expected

Yesterday as expected the BoE announced a further £50 billion of Quantitative Easing. The Bank justified its decision against a backdrop of a weak economy, uncertain outlook, and falling inflation.

In a statement they said "In the United Kingdom, the underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter. Some recent business surveys have painted a more positive picture and asset prices have risen. But the pace of expansion in the United Kingdom’s main export…

Quantitative Easing effect on Exchange Rates

Thursday 9th February 2012
Good morning. Sterling was down against most currencies including the Euro and US Dollar, as markets brace for more Quantitative Easing today from the Bank of England. This is what we will focus on today, and look at what effect Quantitative Easing may have on Sterling exchange rates. First, let's look at how rates moved throughout trading yesterday:

~Currency Movements on Wednesday 8th February 2012~

Quantitative Easing and the effect on Sterling exchange rates

Today at 12:00pm, the Bank of England will announce if they are changing interest rates, and also if they will pump more money into the economy through their QE programme. It's expected that they will announce a further £50 billion of stimulus, in an effort to bolster the UK's struggling economy. QE involves flooding the market with more pounds and usually weakens the currency. Indeed last time the BoE pumped money in, the Pound fell across the board.

So what effect could it have? As the forec…

Pound drops against Euro; how to protect against falling rates

Wednesday 8th February 2012
Good morning. Sterling fell against the Euro yesterday, and in the absence of any UK data it was developments in the Eurozone affecting rates, with the single currency holding firm even as Greek talks on the terms of a new bailout deal dragged on. The Euro is being supported by comments from Eurogroup President Jean-Claude Juncker who said he had no doubt about Greece's future in the euro zone provided the country fulfilled its duties towards other euro members. This is what caused rates to dip yesterday, as the chart below shows:

~Currency Movements on Tuesday 7th February 2012~

Sterling falls vs Euro, markets braces for further drops

The GBP/EUR rate has been fairly steady in the last few weeks, but yesterday rates fell slightly as there was more optimism over Greek debt. As stated above, positive comments from the Eurogroup president gave the single currency some strength, and this is what driven rates yesterday.

His comments strengthened the Euro, makin…

Pound Sterling Forecast and Euro Rate Forecast

Monday 6th February 2012
Good morning. Today we'll take a detailed look at recent exchange rate movements. With the GBP/EUR rate coming down from an 18 month high, and GBP/USD down from a 2.5 month high, we will look at the Pound Sterling Forecast and Euro rate forecast, and if exchange rates will go up or down through February 2012.

In this week’s Report:

• Bank of England to resume Quantitative Easing this week?
• Pound/US Dollar drop from 2.5 month high
• Pound/Euro predicted to fall from near 18 month high
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

Sterling’s week against the Euro remained relatively range bound with data releases having little effect on the pairing. Most investors spent much of the week holding out before making any serious moves as they waited for a conclusion to the Greek debt problems and a potential bail out through private creditors. “There's not very much …

Sterling Euro exchange rate forecast will the rates last this high?

Friday 3rd February 2012
Good morning. Sterling was pretty steady against the US Dollar yesterday, remaining around the 2.5 month high. Against the Euro it was up and down, but remained in the €1.20's all day. The Pound is being supported by a cautiously optimistic outlook for riskier currencies and data from the UK which pointed at growth in the construction and manufacturing sectors. Below shows how rates moved throughout the day yesterday:

~Currency Movements on Wednesday 1st February 2012~

Markets Flat

There is little to report in fact with regards to yesterdays currency movements. Most data came out roughly as expected, and there wasn't much volatility. Pound/EUro remained between €1.20 and €1.2080, and the Pound/Dollar rates hovered around the 2.5 month high for most of the day.

The GBP/EUR rate briefly spiked as there was some uncertainty over a Greek debt swap deal and an increasingly ominous outlook for Portuguese sovereign debt kept investors wary of the common currency. …

Pound Euro rate forecast Feb 2012

Thursday 2nd February 2012
Good morning. Sterling levelled off around the €1.20 level against the Euro yesterday, as markets repositioned the Euros value for the start of the month. Overall, the Pound gained, especially against the US Dollar after better than expected UK manufacturing PMI data meant markets are wondering about the level of QE expected next week from the Bank of England (BoE). Below shows how the rates moved throughout the day.

~Currency Movements on Wednesday 1st February 2012~

Pound surges against the US Dollar

Yesterday the pound gained well against the Greenback. We started the day in the low $1.57's however by later afternoon the rate had risen to the mid $1.58's. This represents the best buying levels for US Dollars in nearly 3 months.

The main reason for the gain was the fact Sterling was supported by a surprise return to growth in the UK's manufacturing sector. This in turn means the QE from the BoE next week may not be as high as the £75bn estimated, a…

Pound/Euro gains February 2012 Forecast Predictions

Wednesday 1st February 2012
Good morning. The Pound surged through trading yesterday afternoon, rising to a 2.5 month high against the US Dollar, and rising close to an 18 month high above €1.20 against the Euro. This was all due to hopes that Greece will reach a deal with its private creditors this week. The Below charts show how rates moved throughout the day yesterday

~Currency Movements on Monday 30th January 2012~

Pound makes significant gains against Euro

As the charts above clearly illustrate, Sterling had a great run agains the Euro yesterday, gaining by over 1%. Look at it go! It was due to hopes a deal to help Greece is imminent. Greek Prime Minister Lucas Papademos said negotiators had made significant progress in debt restructuring talks, sparking optimism the country may avoid a chaotic default.

This buoyed sentiment towards the euro and lifted riskier assets and currencies, including sterling. As a result, the Pound gained against both the Euro and US Dollar. This is because…