Monday 29th October 2012
Good morning. The Pound/Euro rates climbed nicely last week when UK GDP figures confirmed we are out of recession. Today I'll have a look back at the events of last week, look at what might happen with exchange rates going forwards, and as usual round up the weekly economic data that could affect exchange rates in the short term.
In this week’s Report:
- Pound/Euro rates hit 3-week high
- UK finally out of recession – GDP grows 1%
- A volatile week for the Pound/Dollar cross
- Round up of the week’s other data that may affect rates
Sterling vs. Euro;
The pound surged last week on the back of a hugely better than expected GDP swing of 1.6% quarter on quarter, showing an initial estimate of a full 1% growth in the UK for Q3 2012. Though this figure is sure to change as the final figures are more accurately calculated, the realisation that the UK had exited recession was more than enough to send its currency on a rally.
This caused Pound/Euro rates to surge nicely at the end of last week.
Forecasters still expect a Euro rally in the wake of any request by the Spanish Government for financial assistance from the EU, but as yet this still hasn’t happened. In the absence of serious support for the Euro as the Spanish continue to tap-dance around the bailout, the pound was free to strengthen nearly 2.5 cents unabated in a day and a half after the GDP report.
This quick movement shows how easily gains can be made and lost on the currency market; those who were holding off selling their Euros whilst waiting for the Spanish Bailout lost nearly £3000 on an average second home sale price of €180,000. Of course one man’s loss is another’s gain with those looking to buy in the Euro zone have benefited from this sharp spike.
Experience teaches us that spikes are often just that, with correcting movements seeing rates move the opposite way very quickly.
One way of trying to make sure you catch a spike in your favour is by using our services. Unless you have the time and inclination to sit and watch a prices screen day in day out, the free services we provide mean you always have eyes and ears on the market that can inform you as soon as the rates move.
With the wide array of currency contracts available and state of the art trading facilities we can cover your bases for your currency needs when buying, selling or servicing overseas properties as well as any foreign invoices your company may need to pay.
Consultations with us are free, as are trading facilities which carry no obligation.
Click here to send me a free enquiry now.
Weekly Economic Data that may affect exchange rates
Monday – A relatively quiet day for data releases to start the week. We have Net Lending figures from the UK along with inflation figures from both Germany and the US.
Tuesday – A quiet day for data releases in the UK today. In Europe, the president of the ECB Mario Draghi gives a speech. We also have a ten-year Italian bond auction. It may be an interesting day for the GBP/EUR cross. From the States we have consumer confidence measures.
Wednesday –We have consumer confidence figures from the UK today and a raft of inconsequential data from the Eurozone, including the general unemployment rate and inflation measures, both of which should have little impact on exchange rates.
Thursday –As was the case last week, Thursday will be an interesting day for data releases. We have manufacturing PMI from China, the States and the UK along with unemployment figures from the US and house price data from the UK.
Friday – We end the week with Canadian and American unemployment figures along with Spanish and Italian PMI data.
Getting the best exchange rates
You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.
It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.
Click here to send me a free enquiry
Labels: Best Exchange Rates, Pound/Euro forecast, UK GDP