Showing posts from March, 2012

GBP recovers despite possibility of UK recession

Friday 30th March 2012
Good morning. Well, what a difference a day makes. After seeing Sterling fall earlier in the week as outlined in my recent post the Pound regained ground against a beleaguered Euro yesterday, however the Pound did fall away from the recent highs against the Dollar. And all of this on the back of a host of poor economic data.

So to end the week, let's look first at the data we had yesterday, then I'll explain why the Pound actually gained against the Euro despite this!

Poor UK Data casts shadow over UK economy

Yesterday saw quite a bit of UK economic data that was worse than forecast. Firstly we saw that mortgage approvals fell last month, and money supply for February posted its biggest monthly fall on record. This was followed by figures showing poor growth in Britain's dominant services sector. We then learned that UK House Prices had their sharpest drop in over 2 years.

Then, to put the icing on the cake of doom the Organisation for Economic Co-operati…

Pound falls on revised UK growth figures

Thursday 29th March 2012
Good morning. It was a glorious day with unbroken sunshine across the UK yesterday, however the sun was not shining on the Pound, which took a drop against other currencies. So why did Sterling fall during trading yesterday? It dropped to a 2 week low against the Euro and also dropping from it's recent highs against the US Dollar. This was due to data unexpectedly showed the UK economy contracted more than previously thought in the fourth quarter of last year. In today's post we'll look at this and how it affects the Euro Rate forecast going forwards.

Sterling falls on growth figures

Figures released yesterday morning showed that UK gross domestic product contracted by 0.3 % in the last 3 months of 2011, which was worse than the forecast for an unrevised 0.2% fall on the quarter.

What does this mean for exchange rates?

It means there is a small risk of the UK going back into recession, and this has weakened the Pound. We've now had one quarter of ne…

Pound at 4 month high vs US Dollar, flat vs Euro

Wednesday 28th March 2012
Good morning. The Pound/Euro rate has been pretty flat so far this week, remaining around the €1.19 to €1.20 range. Against the US Dollar rates briefly hit a 4 month high above $1.60, before retreating slightly. Today we will take a look at what is causing recent movements, and the forecast for GBP/EUR and GBP/USD for the coming weeks.

Sterling remains range-bound vs Euro

Let's start with the Pound/Euro exchange rate, which remains around the €1.20 level. It did briefly drop by half a point yesterday morning when the first round of economic figures were released, however the drop was not to last.

At 12:00pm yesterday the CBI Distributive Trades Survey was released by the Confederation of British Industry. This is an indicator of short-term trends in the UK retail and wholesale distribution sector, and tends to have an impact on the formulation of economic policy at the Bank of England and within Government, and so can often impact Sterling.

The figures were mu…

Sterling/Euro Forecast, Sterling/Dollar, Fundamental Data

Monday 26th March 2012

Good morning. Regular Readers will notice the blog has had a Spring clean and a fresh new look for the new season. While the look of the blog has changed, the content has not - knowledgable currency reports to help you decide when to convert your currency, and commercial exchange rates that are significantly better than you can achieve elsewhere. As always for a Monday, today we will look at last weeks movements in exchange rates.

In this week’s Report:

UK Budget has little impact on exchange rates
Sterling/Euro remains range bound at €1.19/€1.20
Pound/Dollar climbs near $1.60, but forecasts mixed
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 began positively for Sterling as it climbed to a 13-month peak against the euro on a recent run of improved UK data. Additionally, there were no surprises in the UK budget, but analysts warned that the key to whether ster…

Budget, Sterling/Euro forecast & Regular Payments

Thursday 22nd March 2012
Good morning. Pound/Euro had a mixed day yesterday. Higher than expected borrowing figures pushed rates lower in the morning, however rates were to recover later in the afternoon. The Budget had little to no effect on exchange rates at all, and was perceived as neutral for the currency. Today we will look at the Budget, the Bank of England minutes, and how to get the best deal for Regular Payments in Euros. Below shows rate movements throughout the day yesterday:

~Currency Movements on Wednesday 22nd March 2012~

UK Budget

The budget delivered yesterday was pretty much as expected, contained no real surprises and had no effect on Sterling exchange rates. The chancellor George Osborne was seen to be sticking with the coalition government's austerity drive which aims to bring the country's finances back into line in five years, though sluggish growth hampered by fiscal cuts remains a concern to investors.

As it had little effect on rates, I won't go into a…

How will the 2012 Budget affect exchange rates

Wednesday 21st March 2012
Good morning. It's budget day - so today we will look at how will the UK 2012 budget affect exchange rates, and the implication for the Pound Sterling Forecast and Euro Rate Forecast. It's been the usual story for Sterling so far this week. On Monday we hit a high of €1.2071, however as has often been the cast in the last few months, the highs were not to last, and yesterday the Pound fell back against most currencies, as the chart below shows.

~Currency Movements on Tuesday 20th March 2012~

Sterling falls against Euro ahead of Budget

The Pound fell against the Euro yesterday after UK inflation fell to the lowest in over a year. This means interest rates are likely to stay on hold for the foreseeable future, slightly weakening Sterling.

The UK Currency has had a good run in the last few days, after being underpinned by a recent run of better data. According to Reuters Sterling rose to a 13-month peak against a trade-weighted basket of currencies on Monday.…

Weekly GBP/EUR forecast, and the weeks data

Monday 19th January 2012
Good morning, and welcome to another new week in the currency markets. It should be an interesting one, with both the UK Budget and BoE minutes being released on Wednesday. With GBP/EUR rates remaining above €1.20, will they go up or down in the next few weeks or months? Let's move on to the Monday roundup of last weeks movements, and see what's in store this week.

In this week’s Report:
UK Budget this week could affect SterlingPound/Euro rates remain above €1.20Credit Rating downgrade threat for UKRound up of the week’s data that may affect ratesSterling vs. Euro;

Today we will look in detail at the following.... Last week saw the Euro zone finance ministers finally approve the second Greek bail-out package, Increased UK unemployment rates and Fitch’s warning that the UK’s credit rating changing from stable to negative. Market movement’s saw the week open in the 1.18’s, ending back near the 1.20 level (Interbank):

The start of last week saw euro zone finan…

Pound steady, but credit downgrade threat mean downside risks

Friday 16th March 2012
Good morning. The currency markets have been fairly stable in the last 2 days, with Pound/Euro remaining steady around the €1.20 level. Better than expected unemployment data has given Sterling some support, but threats of a UK credit rating downgrade mean we could see the Pound start to slide again soon. Yesterdays movements:

~Currency Movements on Thursday 15th March 2012~

UK Unemployment

UK unemployment rose by 28,000 to 2.67 million during the three months to January, with the unemployment rate at 8.4%, according to figures from the Office for National Statistics (ONS). The rise in unemployment was the lowest in almost a year.

Despite the high figures, they were actually lower than forecast, and the slowing rise is good news for the Pound, which gained following the release.

UK Credit Rating under threat

The Fitch and also Moody's credit ratings agencies have put the UK's top AAA rating on "negative outlook". Fitch Ratings warned earlier this week…

Pound Euro climbs to €1.20 again - will it go higher?

Wednesday 14th March 2012
Good morning. Sterling had a very good run yesterday, gaining against both the Euro and US Dollar. The gains were in part due to better than expected Trade Balance figures, coupled with ongoing concerns over Euros that weakened the Euro significantly following comments from the Eurozone Central Bank president. The charts below show how the Pound gained throughout trading yesterday:

~Currency Movements on Tuesday 13th March 2012~

UK Trade Balance Better than expected

The UK's trade deficit was less than expected in January, thanks to strong exports of cars to the US, China and Russia, according to data released yesterday.

The deficit on seasonally adjusted trade in goods and services was £1.8bn in the first month of the year, compared with £1.2bn in December, but less than analysts had forecast. The news gave Sterling a boost against other currencies.

Euro weakens following ECB president comments

European Central Bank President Mario Draghi yesterday called on ba…

Weekly GBP/EUR forecast, and the weeks data

Monday 12th March 2012
Good morning, and welcome to a new week in the currency markets. As customary for a Monday morning, today I will take stock of last weeks movements in exchange rates, particularly the Pound/Euro cross. In addition, I will look at the weeks data releases that may have an impact on the value of the Pound vs other currencies.

In this week’s Report:

• Euro gains strength on Greek debt swap deal
• No change in EU or UK Interest Rates
• EU debt crisis continues to drive exchange rates
• 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 another fairly choppy week’s trading for the sterling/euro cross, as once again headlines were dominated by the continuing Greek debt crisis. After dropping into the €1.17’s the previous week, Sterling began a recovery against the euro as recent positive UK data has helped support the pound, as concerns over another round of quantitative …

Pound/Euro falls March 2012 forecast predictions

Friday 9th March 2012
Good morning. Why has Pound/Euro fallen? Yesterday the Pound fell against the Euro, and rose against the US Dollar. It was developments in Greece and the EU that drove rates, with renewed optimism over the EU economy strengthening the Euro and other riskier currencies such as Sterling. So, the Pound gained against many currencies, but fell against the Euro, as the charts below illustrate:

~Currency Movements on Thursday 8th March 2012~

Euro strengthens on optimism over Greece

The Euro gained strength yesterday, becoming more expensive to purchase. It was due to Greece making progress on their debt swap. Analysts said the euro may have scope for short-term gains on a positive outcome to the Greece deal.

As the market focused on events in Greece, European Central Bank President Mario Draghi said there were signs of stability in the euro zone economy, and basically stated Greece would be allowed to default if necessary. This gave renewed optimism about the EU economy, an…

Greek debt swap - how could it affect exchange rates?

Thursday 8th March 2012
Good morning. The Pound fell slightly yesterday against the Euro and US Dollar, as a fragile UK economy and weak technical outlook weakened Sterling. Today we will see UK and EU interest rate decisions, and also details on the Greek bond swap, which needed to avoid a disorderly default. We could see quite a volatile day for exchange rates. Today I will look at this in detail, after a snap shot of how rates move through the day yesterday:

~Currency Movements on Tuesday 6th March 2012~

UK and EU Interest Rate decisions today

It's the first Thursday in the month, and so we will see the Bank of England (BoE) and European Central Bank (ECB) Interest rate decisions. I expect both central banks to leave rates on hold, and no increase in the Quantitative Easing (QE) measures from the BoE.

Despite no change in policy expected today, recent positive UK data have dampened prospects for more monetary easing from the Bank of England. This has helped the Pound gain in recent …

Pound/Euro rates range bound at €1.20

Wednesday 7th March 2012
Good morning. For Pound/Euro rates, it's been a very flat week so far with the cross being range bound around the €1.20 level. Sterling fell against the US Dollar however due to a fall in House Prices and poor Retail Sales. Weakness in the Euro has counteracted the fall in the Pound, which is why GBP/EUR has hardly moved, as yesterdays chart demonstrates:

~Currency Movements on Tuesday 6th March 2012~

Pound/Euro rates remain flat around €1.20

As the graph above shows, GBP/EUR rates again hardly moved yesterday, and were in the 1.1980 - 1.2010 range all day long. The Pound actually weakened early in the day following a fall in UK House Prices, and poor Retail sales suggesting the economy is still sluggish.

The exchange rate then bounced back due to mounting concern over the Greek debt issue. The bailout deal still isn't fully agreed, and there is a deadline on Thursday regards bond auctions which could mean Greek suffers a disorderly default. The news worri…

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

Monday 5th March 2012
Good morning. Last week the Pound surged against the Euro, close to a 19 month high. As usual for a Monday, today I will take stock of what moved the market last week, the outlook and Pound Sterling Forecast for Pound Euro rates March 2012. Today I will purely focus on this currency pair, in addition to a breakdown of the weeks data that I think will affect exchange rates.

In this week’s Report:
Bank of England comments strengthen SterlingECB Start LTRO; find out what this means for ratesPound/Euro forecast for March/April 2012Round up of the week’s data that may affect levels(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

The Pound had a very good run against the Euro last week gaining over 2 cents from where it started on Monday morning due to the scaling back of expectations of more Quantitative Easing (QE) from the Bank of England, and the European Central Bank pumping more cash into their banking system. The data ear…

Pound rises against Euro March 2012 Forecast predictions

Friday 2nd March 2011
Good morning. Sterling has had a very good run this week, rising against the Euro and US Dollar following positive comments from the Bank of England, coupled with continued uncertainty over the Greek Bailout. Today I will look at what has caused the Pound to rise against the Euro March 2012. The below charts show rate movements yesterday:

~Currency Movements on Thursday 1st March 2012~

Why has the Pound risen against the Euro?

The Pound rose higher yesterday against the Euro, despite UK manufacturing data that was slightly worse than forecast. This was due to less chance that the Bank of England will embark on another round of quantitative easing in the next few months. There are also hopes that the British economy will not plunge back intro recession, and this also gave Sterling some strength.

BoE governor Mervyn King nudged the bar higher on Wednesday when he told lawmakers the bank will be guided by upcoming data when deciding whether to print more money. It h…