Showing posts from January, 2014

How has FED tapering affected exchange rates?

Thursday 30th January 2014 
There has been some key volatility in exchange rates this week, being mainly driven by events in the USA. In today’s report I’m going to explain how the FED tapering has pushed some exchange rates higher such as the Pound against emerging economies such as Turkey, New Zealand & South Africa, and some exchange rates lower for example Pound/US Dollar.

FED cut stimulus as expected 

Last night the US Federal Reserve announced a $10bn reduction in its monthly bond purchases from $75bn to $65bn. This is the second month in a row they have done so. 

The central bank had been buying bonds in an effort to keep interest rates low and stimulate growth, and now they are winding that in is a sign of positivity for the US economy. 

So how has this affected exchange rates? 

Pound/Dollar rates have fallen. This is because the news is good for the USA, and so the Dollar has strengthened and become more expensive to buy. It’s dropped from 1.66 to 1.65, not a huge drop because …

Why has Sterling risen today? / This weeks economic data

Monday 27th January 2014 
Sterling has had a pretty good run today, steadily rising and recovering from the drop we saw at the end of last week, as you can see from today's GBP/EUR chart below. There haven't been any significant data releases today, so why has the Pound risen? 

I think the reason for today’s gains are two-fold. Firstly, we have some key growth figures for the UK tomorrow. When they are released I’m expecting it to show Britain confirmed as the strongest major economy in Europe, so part of today’s gains are the market positioning itself ahead of the official release tomorrow. Just last week the International Monetary Fund upgraded its outlook for the UK in 2014, so this optimism is driving the Pound forward at the moment. 

A second reason for the gain today could be a general sell off of weaker currencies and assets. As you can read here, the fact that the FED may taper it’s QE programme this week have meant that investors have been selling riskier assets like th…

Pound falls significantly after Mark Carney comments

Friday 24th January 2014 
Good afternoon. We have seen Sterling weaken significantly today, after the Bank of England governor poured cold water on the chances of interest rates going up any time soon. 

Speaking at the World Economic Forum in Davos, he admitted that its new "forward guidance" on increasing interest rates will need to change because unemployment has fallen far faster than expected. He added it was time to "evolve" the guidance, raising the possibility the Bank may abandon the 7% unemployment trigger to consider an increase in rates. You can read more about what he said here on the telegraph site. This is what happened to Sterling/Euro rates after he spoke:

What does this mean for exchange rates? 

Earlier in the week the excellent unemployment figures pushed Sterling to a 12 month high against the Euro, and this was because the level was falling to the 7% target that analysts thought would trigger an interest rate rise. 

The comments from Mark Carney toda…

Pound hits €1.22 after unemployment figures

Wednesday 22nd January 2014 
We have seen another spike in the value of Sterling this morning, after the latest UK Unemployment figures were better than forecast. It is the biggest quarterly drop in unemployment on record! As such it has pushed the Pound to a 1 year high against the Euro (€1.2215) and close to a multi-year high vs the US Dollar ($1.6550). 

The figures released at 09:30am showed that the UK unemployment rate has dropped to 7.1%. This is now very close to the point at which the Bank of England has said it will consider raising interest rates. 

The better than expected figures has surprised the markets, as many analysts did not expect the unemployment rate to hit 7% until much later this year or possibly even 2015. This significant fall in unemployment therefore means that higher interest rates could be on the cards. 

So why has this caused the Pound to rise? 

Higher interest rates in the UK mean a higher return for investors, and so the possibility of higher rates means peo…

Will Sterling rise or fall this week? Jan 2014

Monday 20th January 2014 
It’s been a quiet start to the week, with the Pound remaining supported at €1.21 against the Euro and still above $1.64 vs the US Dollar. The market was very quiet due to a US Market Holiday. We did see a slight decline in GBP/EUR rates today though, losing half a cent, coming down from €1.2150. This was due to the Euro gaining a little strength, helped by higher short-term market interest rates, although speculation the European Central Bank may step in stopped the rate dropping too far. 

So as usual for a Monday, below I will list the remaining data releases this week that I think will affect exchange rates. Remember if you are looking for the best exchange rates, click here to send me a free enquiry to compare the rates I can offer you. 

This week’s economic data releases. 

Below are the main releases for the coming week. I think data from the Bank of England on Wednesday will be very important, along with UK Unemployment figures. Also bear in mind we have the…

Sterling up after Retail Sales smash forecasts

Friday 17th January 2014 
This morning at 09:30am we saw the latest UK retail sales figures. These are watched closely as they reflect the overall economic situation in the UK, and for this reason the numbers often have an effect on exchange rates. 

The figures this morning were significantly above forecast, and as you can see from today’s GBP/EUR chart below, they have caused a big spike in exchange rates:

The numbers showed that sales in December were up 5.3% on a year ago, and this is the fastest annual sales growth in more than nine years. The forecast was for 2.6%, so it's significantly better than expected. The figures from the Office for National Statistics (ONS) suggested growth in consumer spending above the expectations of many analysts. 

There aren’t many other significantly releases today, other than a speech by a Bank of England member at lunchtime, and some US Housing numbers later this afternoon. 

Do you need to buy Euros?

The spike this morning has pushed GBP/EUR rates …

Inflation effect on exchange rates

Wednesday 15th January 2014 
It’s been a volatile week for exchange rates since my last post on Monday. Despite not much data other than some inflation numbers, we have seen Pound/Euro rise to 1.2070 before dropping back towards the 1.20 level. Against the Dollar, the Pound has fallen from $1.65 to $1.6350. 

In today’s post I’m going to analyse the reasons why the Pound has been fluctuating up and down, and where exchange rates may be headed in the short term. If you are looking to make a transfer from Sterling to a foreign currency, or convert a currency back into Sterling, then click here to find out about the rates and service that I can offer you. 

UK Inflation Figures cause volatility for the Pound 

Yesterday we saw UK Inflation figures released, and it’s this that has caused the GBP/EUR rate to fluctuate. The figures showed that inflation has dropped to 2% which is the government’s target. It’s the first time it’s been at that level for about 4 years. So what effect did this have on…

Pound falls further. What might affect exchange rates this week?

Monday 13th January 2013 
The Pound has fallen further today against other currencies and currently sits at €1.20 vs the Euro. This is in addition to the falls in the rate we saw on Friday, due to poor manufacturing figures, as I outlined in my last post.

So what has caused the drop today? To be honest it’s been quite hard to pin a reason on the decline today, as there have been no significant data releases that would have caused the volatility. 

After some further research, it appears that the fall in the value of the Pound today was due to a measure of whether U.K. economic data has been beating analysts’ expectations, and this has damped investor demand for the currency, and as a result it has weakened and exchange rates have fallen. You can read more about this on the Bloomberg site here. I can find no other explanation for the drop in rates. 

This has meant the Pound has dropped to the lowest level in a month against the Euro down to €1.20, and down to $1.6380 vs the US Dollar. We c…

What goes up must come down...

Friday 10th January 2013 
Well, as is often the case in the currency markets, spikes are short lived and the gains we saw yesterday against the Euro have been eroded. In today’s post I’m going to have a look at what has happened this week with Pound/Euro rates, Pound/US Dollar rates, and Pound/Australian Dollar rates. I'll also take a look at where the rates have been historically, and what may happen during 2014.

If you find my blog useful, then feel free to get in touch with me by clicking here. I can offer you a free consultation on what’s happening with exchange rates to help you make an informed choice on when to fix your rate. In addition to taking advantage of my market knowledge, I can give you a quote for your exchange that could be up to 5% better than your bank or existing broker. 

First things first, let’s see what’s been happening with exchange rates this week. 


The rate is around the best it’s been in 12 months. The ECB meeting yesterday that I touched on in y…

Pound/Euro rates hit €1.2150 after ECB Press Conference

Thursday 9th January 2014 
Good afternoon. A quick update on exchange rates, as we have seen Pound/Euro surge to new highs, and currently the rate is €1.2150. 

The reason for the gains were as I outlined in my post yesterday. As I predicted, there were no surprises from the central bank decisions, however in the ECB Press conference, I mentioned that if the President Mario Draghi hinted at lower interest rates in the future for the EU, it would weaken the Euro and push rates up. 

This is exactly what has happened. He said rates would "remain at present or lower levels for an extended period of time". The markets reacted immediately, and as you can see from the chart below, the GBP/EUR rate shot up from 1.2085 to 1.2150. 

This is now a very attractive time to need to fix a rate buying Euros. You can read more about what happened in the ECB press conference here on the BBC website.

If you would like to discuss how I can help you achieve excellent commercial exchange rates, click h…

Pound rises to €1.21 / Central Bank Decisions

Wednesday 8th January 2014 
We have seen the Pound gain in strength today, and Sterling/Euro exchange rates have risen to €1.21. In today’s post I’m going to give my view on why I think this has happened, and also have a look at what could happen tomorrow (Thursday) which I think is going to be key for what happens to exchange rates in the short term. 

It’s a very important day for currencies as we have some key data from 3 of the world’s major central banks in the next 24 hours. But first, let’s look at today’s gains….

Pound/Euro rates rise to €1.21 

As you can see from the chart, Pound/Euro rates have gained nicely today, hitting €1.21 before levelling off. So what has caused the jump in rates? 

One factor could be the unemployment numbers from the Eurozone that were released earlier. It shows unemployment is now at 12.1%, which is much higher than we have in the UK. As such this may have weakened the Euro causing rates to rise. But to be honest, the number was pretty much as expected, …

Will Pound/Euro rise or fall in 2014?

Monday 6th January 2014 
Good afternoon everybody and welcome to a new year. I am back in action today with regular updates on exchange rates. For new readers, this blog is updated several times per week with an outline of what is happening with exchange rates. This should prove useful for anyone following the currency markets that needs to buy or sell foreign currency, perhaps when buying or selling abroad or for example business’s that import or export to other countries. 

In addition to my blog providing currency updates and foreign exchange forecasts, I can also help you source exchange rates up to 5% better than you can achieve at banks and other financial institutions through the company I work for. If you are interested in getting a quote or would like to find out more, click here to send me a free no obligation enquiry.

So what has been happening with exchange rates so far in 2014? 

It’s been a relatively muted start to the year. Pound/Euro rates remain a little above €1.20 which…