Wednesday 30th October 2013
Good afternoon. Currency markets remain fairly subdued, with no huge movements in rates over the week. The Pound has fallen a little further against the Euro, but gained slightly against the US Dollar. Today I’ll have a look at what has caused these shifts despite the lack of much economic data.
Pound slides to 2 month low against Euro
Sterling was recently touching €1.20 against the Euro following some good economic numbers, however this trend ended several weeks ago, and since then the rates have been sliding. So what has caused the rate to drop?
The main reason is slightly better optimism surrounding the EU economy, and the fact that analysts are no longer that excited about the UK’s recovery, which is what had been driving the rise in the value of the Pound.
In the summer, a raft of positive economic data had market commentators gushing about how good the economy was. Investors bought the Pound as a result, and this demand drove its value higher, which is when we got close to €1.20 against the Euro. It was the fact that the robust figures were unexpected that drove Sterling higher.
The problem now is that it’s not a surprise any more. A good example was the UK mortgage approval numbers released yesterday. This is usually watched closely as the housing market in general is a good reflection of the overall economy. The numbers were actually slightly better than forecast. However with investors so used to figures much better than they had been expecting, even though the result was better than expected, it was seen as disappointing and so the Pound fell as a result.
This apathy towards the Pound has reduced its value steadily in recent weeks, and rates currently sit in the €1.16’s.
Best rates for 2 months for converting Euros to Pounds
For those that hold Euros and need to convert them into Pounds, this is good news. The rate is now the best it’s been in a few months, so not a bad time to consider taking advantage of the gains. If you need to get the best Euro/Pound rate then click here to send me a free enquiry today.
I can explain the options available to you, and provide you with a rate to compare with your bank. You may well be very surprised how much of a better rate I can achieve.
So will the Pound keep dropping against the Euro, or bounce back up?
This depends on economic data releases in the next few weeks, and of course the way in which investors react to them. This week is quite quiet, but next week we get some more interesting information from the UK, including inflation numbers, a GDP estimate, and the latest BoE decisions on interest rates and monetary stimulus.
It’s impossible to predict which way the rate will go, however in the short term I can’t see any significant recovery for the pound. In the medium to longer term, I think Sterling will edge back towards €1.20, if of course the economy continues to expand at a rate that surprises analysts. The GDP estimate next week will be a good indication of whether this will be the case.
Click here to discuss your currency requirement with me.
Make sure you’re in a position to get the best exchange rates
Regardless whether you are buying a foreign currency with Sterling, or converting currency back to Pounds, the foreign exchange market will have a huge impact on how much you can achieve. In the last month or so alone, converting £150,000.00 to Euros nets you a sum that differs by over €5000.00.
In order to be in the right position to get the best rate, and gauge your timing, you need to have a good currency broker. I have been working in the financial markets for over 10 years, and so have a good knowledge of what can move exchange rates. By having a free consultation with me, you can make an informed choice with regards to when to fix your rate. Combine this aspect with the fact the rates I provide are up to 5% better than the banks, and you can see that by taking 5 minutes to contact me could result in saving you thousands of pounds.
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I look forward to hearing from you.
Labels: Best Exchange Rates, currency forecast, Exchange Rate outlook, Pound Euro predictions, Pound/Euro 2 month low