Wednesday, 25 September 2013

How to get the best exchange rate buying or selling Euros

Wednesday 25th September 2013
Good afternoon. The currency markets have been fairly calm recently, and exchange rates seem to have stabilised. We haven't seen a huge amount of movement since my last post. GBP/EUR rates remain around the €1.19 level, and GBP/USD rates just above $1.60.

In today's post I will look at economic statistics that will be released in the next week, and how they may affect exchange rates. I will also explain how I can help you achieve exchange rates that can be much better than those offered by banks and other financial institutions.

So if you need to buy Euros at the best rate, have a foreign currency you need to convert back to Sterling, are looking for the best exchange rates, or are trying to find out if the Pound will go up or down against the Euro, read on...

Pound/Euro forecast 2013

In the last few months the Pound/Euro rate has climbed nicely, peaking a few weeks ago in the mid €1.19's. This is due to much better economic data that indicate the economy is recovering nicely. The only fly in the ointment was last week's poor retail sales that took the wind out of the Pound's sails a little.

Since then rates have stabilised around the €1.19 level. This is because the markets have now accepted the economy is recovering, and so good economic numbers are no longer a surprise.

So will rates go higher? Stay where they are? Drop back away?

I think that for the next few days it will be the UK GDP figures that will have an impact on rates. These are released at 09:30am tomorrow morning. I expect this to be revised up to 0.7%, and the markets have already priced this in to where the exchange rate stands. If the number is higher than this, the Pound/Euro rate may rise. If the number is worse, expect a drop in rates.

On Friday the European Central Bank (ECB) president Mario Draghi gives a speech. I think that his comments could well affect GBP/EUR rates. Put simply, if his words are positive for the Eurozone, Pound/Euro could drop, and vice versa.

For the medium to longer term, I personally don't think that rates will climb to €1.20 and above. Why? Well it wouldn't be in Britain's interest to have higher exchange rates, as it would affect imports to the Eurozone due to UK goods being more expensive. 50% of our exports go to Europe, so if the rate climbed too high I would expect the Bank of England to move to weaken Sterling.

If I needed to buy Euros in the next 6 months, I would look to fix a rate on a Forward contract. This allows you to fix today's rates which are around the best they've been all year. You only lodge 10% of the total to be converted, and the remainder when you instruct me to transfer your Euros. This protects you against the rate dropping away and allows you to budget.

If you need to buy Euros and want the best rates, send me a free enquiry now by clicking here.

Converting Euros back to Pounds

Rates have been moving against you due to the strong pound. If we look at the bigger picture though, last summer rates were nearly €1.30, so it's not too bad. You don't have to look back too far to remember when rates were €1.50+.

So if I had to convert Euros to Pounds, I would take the view that if the EU economy recovers, rates could improve. I wouldn't want to leave things to chance though, so I would place a 'Stop Loss' order to convert funds if rates breached a particular level; €1.20 for example. In this way I can hold out for an improvement in the rate, but have a 'worst case scenario' or safety net should the rate continue to get worse.

Converting Euros back to Pounds? Click here to find out more about the rates I can offer.

Other data releases in the next week that could affect exchange rates

Thursday 26th Sept - UK GDP figures, as I mentioned above, are released at 09:30. We also have US Unemployment and Home Sales numbers in the afternoon.

Friday 27th Sept - Nothing of note from the UK, however there are some important EU releases such as the ECB president's speech and some inflation numbers. In the United States we also have Central Bank members giving talks, so expect some volatility in GBP/USD rates. 

Monday 30th Sept - UK mortgage approvals, but I don't think it will have much of an impact. Of more importance will be EU Inflation numbers and Retail Sales.

Tuesday 1st Oct - The new month starts with a raft of Manufacturing numbers from the EU, Britain and the United States. Could be a volatile day as we also have EU unemployment numbers.

Keen to know how data releases like this could affect the exchange rate you're interested in? Send me a free no obligation enquiry now.

Getting the best exchange rates

That's the easy part - the rates I can source are commercial levels up to 5% better than the banks. Send me an enquiry now to find out more. The tricky part is timing your trade so you buy at a good level. There's no way to predict the way exchange rates may move, but what I can do is explain what is causing the movement, and my thoughts on how things may move in the future.

It is of course up to you to decide when to fix your rate, but by taking advantage of my expertise gained from over 10 years in the financial services industry, you can make an informed choice of what to do.

Why not take the advantage of a free consultation by clicking here and sending me an enquiry. I will personally contact you within 24 hours to discuss your requirements, run over your options, and give you an idea of the rates I can offer.

Click here to send me an enquiry or call me today. You may be very surprised how much you can save. I look forward to hearing from you.

Alastair Archbold

Thursday, 19 September 2013

Pound falls after poor UK Retail Sales.

Thursday 19th September 2013
Good afternoon. Since my last post, we’ve seen quite a bit of volatility in the currency markets. I mentioned a few days ago that the markets had been flat, and that I predicted the Bank of England (BOE) minutes and UK Retail Sales would probably cause some movements in the value of the Pound/Euro rate, and indeed they did. We have also seen some news from the US Federal Reserve that has caused a big change in GBP/USD rates.

So let’s take a look at what’s been happening…

Bank of England minutes push the Pound higher

Yesterday we saw that the Bank of England has upgraded its growth forecast for the UK economy when they released the latest minutes from their Monetary Policy Committee. You can read the minutes here if you so wish!

The minutes show that third-quarter growth is expected to be 0.7%, up from 0.5%. The minutes also show that the MPC voted unanimously to keep interest rates and quantitative easing (QE) on hold this month.

It had a big impact on the value of the Pound, which rose against other currencies. Climbing to €1.1960 against the Euro – around the best it’s been all year. The gains were not to last however, as today’s UK Retail Sales news pulled the Pound down again. More on that in a moment.

US FED weakens the US Dollar significantly

Overnight, the US central bank unexpectedly said it would not begin scaling back its massive economic stimulus programme until the US economy had improved further. The bank also cut its growth forecast. So pretty much the exact opposite of what the Bank of England did.

The result was the opposite also – the Dollar weakened significantly, pushing the GBP/USD rates to as high as $1.6150 – the highest it’s been all year.

As with the Pound/Euro rate, the all year highs were short lived due to some poor UK economic news…

UK Retail Sales disappoint

This morning at 09:30am the latest UK retail sales numbers were released. Most analysts thought they would show a rise of 0.4%. Not to be – the actual figure showed a drop of 0.9% and this was a big surprise.
The currency markets don’t like surprises, and as Retail Sales are seen as an indicator of consumer confidence, and therefore the economy as a whole, the Pound lost quite a bit of value.

As you can see from today’s graph, the Pound fell as soon as the number was released, pulling GBP/EUR rates to €1.1860 and GBP/USD rates to $1.6090.

Getting the best exchange rates

I mentioned in my last post that rates seemed to have levelled off, and indeed it looks like recent highs may well have been a peak. The current buying levels are still very good however.

So if you need to convert Pounds to another currency, or convert a foreign currency back to Sterling, you should get in touch with me to find out the rates that I can offer.

I provide commercial rates of exchange to both private and corporate clients that are much better than banks can offer. Get in touch with me today to find out more.
  • Want the best exchange rates?
  • Keen to know if the rate may go up or down?
  • Can't decide when to fix your exchange rate?
  • Sick of getting poor rates and service from your bank?

I can help you. Click here to contact me.

Tuesday, 17 September 2013

Pound remains at €1.19 vs Euro, near 8 month high

Tuesday 17th September 2013 
Good afternoon. Sterling remains strong, however has failed to rise significantly above the €1.19 level against the Euro. GBP/EUR rates remain around the best since January. The Pound has however hit an 8 month high against the US Dollar after Lawrence Summers, perceived by the market as more likely to favour a quick scaling back of monetary stimulus, pulled out from the race to be the next Fed chief. So in today’s report: 

  • UK inflation drops weakening Pound 
  • Pound/Euro remains close to best it’s been since January 
  • US Fed member drops out of race to be FED chief, weakening US Dollar 
  • German Economic figures better than expected, weakening Euro. 
  • UK Retail Sales and BoE Minutes this week expected to affect Pound 
  • How to get the best exchange rates 

UK inflation drops weakening Pound 

Figures this morning showed a slight fall in inflation, which has pulled the Pound lower. Inflation measured by the consumer prices index (CPI) fell to 2.7% in the year to August, from 2.8% in July. 

CPI is important because it is the measure targeted by the Bank of England's interest rate-setters, while the RPI is used for annual adjustments in some benefits and rail fares. The Bank targets CPI inflation of 2%, but is currently holding off raising interest rates to control inflation because the unemployment rate is too high. 

A high figure usually strengthens the Pound, and because the number was slightly lower than expected the Pound weakened slightly, pulling down exchange rates. 

Find out more about our exchange rates

German Economic figures better than expected, weakening Euro. 

 Also pulling GBP/EUR rates down was better than expected numbers from Germany. Economic sentiment is better than analysts had been predicting, and so this gave the Euro strength, making it more expensive. As a result we have seen GBP/EUR rates fall slightly. 

Pound/Euro remains at a good level 

As you can see from the chart, the Pound/Euro rate remains close to the best it’s been since January. It’s been at this level for a week or two now, and for a few days it rose above the €1.19 level, however the figures mentioned above have pulled it back to €1.19 again. 

This is a very good buying level, but seems to have levelled off and we haven’t seen any significant gains. The main thing that I think will move the rates next will be tomorrow’s minutes from the Bank of England, and UK Retail Sales on Thursday. 

Tomorrow the BoE will release its minutes, showing how the members voted at their recent decision to keep interest rates and QE on hold. They will be interesting because it will show what was discussed, and could indicate future decisions on QE and interest rates. If there are any indications any of the members wanted more QE, we may see the Pound fall. 

Retail Sales on Thursday are important as they are a good barometer of overall economic activity. I expect the figures to show a month on month gain of 0.5%. If the actual figure is higher than this, then expect exchange rates to rise. If the number is lower, then we will probably see the Pound fall in value. 

If you are looking for the best exchange rates, click here to get a free quote.

US Fed member drops out of race to be FED chief, weakening US Dollar 

The Pound rose to an 8 month high against the US Dollar earlier this week, after Lawrence Summers, perceived by the market as more likely to favour a quick scaling back of monetary stimulus, pulled out from the race to be the next Fed chief. The dollar fell broadly as it means it will probably be Janet Yellen that takes over the next chair of the Federal Reserve - she is expected to rapidly reduce U.S. bond-buying. This meant the US Dollar weakened, became cheaper to purchase, and GBP/USD rates rose. 

Due to the poor inflation numbers today however, we’ve seen the rate drop back away. 

Are you looking for the best exchange rates? 

I update this blog to keep my existing and potential clients abreast of what is happening with exchange rates. If you need to convert Pounds into another currency, or indeed move a foreign currency back into Sterling, I can help you achieve the best possible exchange rates. 

The rates I can achieve are up to 5% better than banks can offer, so if you are buying or selling property abroad, need to top up your Euro account, or need to pay for goods or services in a foreign currency, why not find out what rates I can offer. 
When you get in touch, ask for Alastair Archbold and quote the reference ‘AJA’ to receive reduced transfer costs. 

I look forward to hearing from you.

Tuesday, 10 September 2013

Will the Pound get higher against the Euro?

Tuesday 10th September 2013
Good afternoon. Since my post last week, the Pound continued to rise, however now seems to have hit the peak and we haven't seen further gains. In today's post I'll have a look at recent economic data, how it's affected exchange rates, and what to look out for in the next week that is likely to move the currency markets. In today's report:

  • Pound fails to break through €1.19 level
  • UK economy is turning the corner
  • US jobs data disappoints, sending GBP/USD higher
  • Upcoming data that might push rates higher or lower

Has Pound/Euro peaked or will it go higher? 

The last few months have been good for the Pound, with lots of good economic data giving Sterling strength, and help exchange rates recover close to where they were back in January. At the end of last week the GBP/EUR rate peaked at just over €1.19.

Since then things seem to have stabilised. We saw rates slip away to €1.18 yesterday, and today we have seen a mild recovery to €1.1850 against the Euro, and so the rise has ended. But does this mean it's the peak or will rates continue to climb to €1.20 and above?

Firstly let me say that nobody can predict the markets. If I could then I would be a billionaire and sat on my yacht rather than sat at my desk on the trading floor! What I can do however is explain what has moved the market, and the arguments for what could move the rate up or down in the coming weeks and months.

Want to discuss when to fix your rate?

Sterling is range-bound between 1.18 & 1.19

So, last week Sterling pulled back from a 4 month high against the euro on after some poor UK data releases. UK industrial output fell short of expectations and the trade deficit unexpectedly widened sharply. The figures mean that the recent consistently strong UK data has come to an end, and it has also led investors to bring forward expectations of when interest rates would rise.

Also last week the Bank of England made no new attempt to talk down borrowing costs and this means that rates could rise much sooner than the central bank has flagged, possibly as early as late 2014. By contrast, the European Central Bank said it was ready to lower interest rates. This has helped the Pound remain strong and the Euro weak. 

The UK economy is "turning a corner", Chancellor George Osborne has said in a speech in London. Mr Osborne cited "tentative signs of a balanced, broad based and sustainable recovery", but stressed it was still the "early stages" and "plenty of risks" remained.

Also helping the pound are recent surveys on UK manufacturing and services which indicate economic growth may accelerate in the second half of the year. So on paper the UK economy is looking good, so why isn't the Pound rising any more?

The currency markets move on rumour, and as the economy is expected to continue to recover, this is already priced in to the market, so even if we keep getting good data it's not going to much of a surprise, and the market now seems to have peaked and is unable to break through the €1.19 level.

If you are buying or selling Euros, find out about our rates by clicking here.

So if you are buying Euros, do you fix a rate now or wait?

Ultimately only you can make this decision. Given however that rates are close to the best they've been since the end of January, I think that holding out for a higher rate could easily mean you lose out on the current levels should we see the Pound weaken again. By hanging on, you could be holding out for an inch and risk losing a yard So if I needed Euros in the next 6 months I would do one of two things.

One option is to fix the rate now. It's a very good rate, and means you are taking advantage of the recent rise in the value of the Pound. Even if you don't need your Euros now, you can fix the rate for up to 2 years with a Forward contract, and only lodge 10% of your Sterling now, the remainder when you want the Euros transferred. 

The second option is a Stop Loss order. If you are hoping the rate will go higher, this allows you to do this but not risk losing out should the market move against you. This works by placing a lower level, 1.17 for example, and should the market drop below this we automatically buy your currency and fix your rate. 

In this way you can continue taking advantage of any gains, but have a 'worst case scenario' or safety net so you know the worst rate you will get should Sterling start to drop. 

Click here to send me a free enquiry if you need the best exchange rates. 

Pound/Dollar rates rise

In addition to the good UK data mentioned above, 2 other things have helped the Pound/Dollar rate rise. Firstly we had some poor US jobs data that has weakened the USD making it cheaper to buy.  

The mediocre jobs report may add fuel to the argument that the US economic recovery is not yet robust enough to sustain itself without the additional help of the Fed - more QE would mean the Dollar could weaken further. 

Also it now looks like military action in Syria may not happen, and if it does it's some way off. This has added some stability to the markets, oil and commodities have fallen, and investors have moved away from the safety of the Dollar and into riskier assets, all of which mean a higher GBP/USD rate. 

Economic data for the next week

If I was buying or selling currency in the next week, there are a few data releases I would be keeping an eye on:

Wednesday - We see UK jobs and unemployment data, which could affect the Pound depending on whether it's better or worse than expected. 

Thursday - UK inflation is released today, and because it can impact interest rates, it often affects exchange rates. Also today we have a speech by the ECB president Mario Draghi, and his comments often affect GBP/EUR rates. US unemployment data is also released today. 

Friday - US Retail sales and Inflationary measures may affect GBP/USD rates. 

If you need to buy or sell currency, would like to find out about our rates, or would be interested in discussing the market to help you decide when to fix your rate, click here to send me a free no obligation enquiry. 

Monday, 2 September 2013

Pound/Euro at 3 month high: (September forecast)

Monday 2nd September 2013 
Good afternoon. It’s been a good start to September for Sterling, with further strong economic numbers giving the Pound a boost to its highest against the Euro in 3 months. In today’s post I will take a look at the recent good run for the Pound, and also whether exchange rates will go up or down in the coming weeks and months. 

I will also look at UK growth forecasts, the effect the new Bank of England governor has had, and also how any strike on Syria might affect the currency markets. So in today’s report: 
  • UK Manufacturing lifts Sterling. 
  • Pound/Euro rates at a 3 month high 
  • UK growth forecasts looking good 
  • UK and EU Interest Rates
  • How military action in Syria could affect exchange rates 

UK manufacturing lifts GBP/EUR to a 3 month high 

UK manufacturing has continued to grow, and is now ‘booming’ according to a survey by the British Chamber of Commerce. The sector has seen its strongest growth in activity for over 2 years, and has now seen 5 consecutive months of growth. 

This is very good news for the UK economy, and indeed analysts have welcomed the figures, adding that the data supported growing optimism over prospects for the economy as a whole. The economy appeared to be "running way ahead" of the forecasts, Mr Wood said, and this also strengthens the view somewhat that interest rates could go up within a year or so. 

The effect on the currency markets was a positive one for anyone that needs to convert Sterling to a foreign currency. As you can see from the chart below, this caused a spike in GBP/EUR exchange rates at 09:30am when the data was released. 

Exchange rates to buy Euros are now at their highest in 3 months, so if you need to buy Euros then now is a good time to consider your options and decide if you want to fix a rate while levels are very attractive. 

UK growth forecasts are up 

The British Chambers of Commerce (BCC) has sharply upped its 2013 growth forecast, saying the economy is gaining momentum. This is another reason for the good performance of Sterling at the moment. It’s important to note however that the BCC also warned of overseas risks to the more positive outlook, notably those posed by the Eurozone, the Middle East and China's slowdown. 

"Unfortunately the recovery is not yet secure," said BCC head John Longworth. "We have had false dawns in recent years and although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks,". So while rates are good at the moment, the recovery in the UK still depends on global factors, and it wouldn’t take much for rates to drop again – remember it was only a month or so ago rates were at a 2 year low, so if I needed to buy Euros in the next 3 months, I would consider fixing the rate sooner rather than later. 

Find out how competitive our exchange rates are. Click here. 

Bank of England’s MPC receives praise 

The Bank of England (BoE) Monetary Policy Committee has received praise for its recent adoption of "forward guidance" - providing explicit advance warning of when interest rates might rise - which the BCC said helped provide businesses with more confidence to plan and invest. You can read a very good detailed article on Forward Guidance by the BBC’s Stephanie Flanders here.  ECB and 

BoE & ECB Interest rates 

This Thursday both the Bank of England and European Central Bank announce their decision on whether interest rates will change, and for the BoE, whether they will pursue any more Quantitative Easing.

Now I don’t expect any change from either bank, and no further QE. What will be interesting however is any comments that come along with the decision – these could well affect Pound/Euro rates depending if comments are perceived as positive or negative by the markets, so this is something to keep an eye on should you have an imminent requirement to buy or sell currency. 

Syria & the effect on exchange rates

The on-going civil war in Syria has been dominating the headlines over the last week. At one point it seemed there would be imminent strikes against the Syrian government, however following the vote in the UK parliament that effectively rules us out of any action, it seems the US has followed suit and are seeking approval from congress before launching any action. 

So how would any strikes affect exchange rates? Should the US go ahead with France and launch missile strikes, then the first effect this would have on the markets would be an increase in commodity prices, oil in particular. For the currency markets, the uncertainty any strikes would create would probably strengthen safe haven currencies like the US Dollar and Swiss Franc. Conversely riskier currencies such as the Pound could weaken. 

So should we see an escalation in the middle east, I would expect Pound/USD rates to drop as investors seek safe haven currencies. 

Do you want to achieve the best possible exchange rates? 

If you are looking to buy or sell a foreign currency, and want to get the best possible rate you can, then send me a free enquiry today. I can discuss your particular requirements, explain which way the rate may move, and explain the different options you can consider. 

In this way you can make sure you’re making an informed decision, and when you decide to go ahead and fix your rate, the levels I can source are up to 5% better than banks can offer. 

So how much could you save? Click here to send me a free enquiry and find out today.