Showing posts from February, 2014

Pound/Euro exchange rate forecast 2014

Wednesday 26th February 2014 
The Pound remains quite well supported against other major currencies, however continues to fail to push any higher. This is due to the fact UK interest rates won't be rising any time soon, and also a resurgent EU economy. If EU growth continues to gain ground, we could see the Euro start to strengthen and become more expensive to buy, which could push Pound/Euro lower again. 

For those with Sterling to convert, we are currently still close to a 1 year high against the Euro, and a 5 year high against the US Dollar.

Yesterday figures published by the British Bankers' Association (BBA) that measure the number of home loans issued werebetter than expected, supporting the Pound at close to 5 year highs on a trade weighted basis (mortgage approvals are seen as a leading indicator of the UK economy)

What could affect exchange rates for the rest of this week? 

Tomorrow (Thursday) we have some key data from the Eurozone, and as the recovery in the EU is sta…

Pound/Euro stable, could it be about to drop?

Thursday 21st February 2014
It's been a relatively quiet week, without much volatility since my last post. We did see the Pound weaken slightly yesterday, when the latest unemployment figures were releases. While pretty good overall, the total number of 7.2% was slightly worse than analysts had been expecting, and Sterling fell a little as a result. 

Today however we rates recovered, and at the time of writing GBP/EUR is at 1.2142, and GBP/USD at 1.6655 - both very good buying levels.

In today's post I'm going to have a look at some other events that have happened today that I think could cause the Pound to drop away from the recent highs...

George Osborne warns recovery is 'not secure'

The UK's economic recovery is "not yet secure", Chancellor George Osborne has warned, ahead of next month's Budget. It comes after the Bank of England upgraded its UK growth forecast for 2014 from 2.8% to 3.4%. 

Experts have raised concerns that improvements are too depe…

Pound falls on low inflation numbers

Tuesday 18th February 2014
We have seen Sterling lose ground today after lower than expected inflation numbers were released this morning. As you can see from the chart below, GBP/EUR rates slipped around 0.5% but levels remain in the mid €1.21's.

So why exactly does lower inflation cause the exchange rate to drop?

The UK's inflation rate, as measured by the consumer prices index, fell to 1.9% in January. The rate fell below the Bank of England's 2% target for the first time in more than four years. While this is good for business's and individual consumers, it's not good news for Sterling, and this is to do with interest rates. 

The fall is likely to underline the Bank of England's message that there is no rush to raise interest rates, as they would usually only do this to combat high inflation. So as the number was lower than expected, analysts believe this has pushed a rate hike further into the future. It has been the speculation of higher interest rates that…

Best Exchange Rates for EUR, USD, NZD, AUD, ZAR

Friday 14th February 2014
Sterling exchange rates have held on to the gains made earlier in the week, due to the Bank of England comments that I talked about in my last post. We are now at multi-year highs against many currencies, so it's a great time to need to convert Pounds to another currency.

Today, I'm going to have a look at some of the most widely traded currencies, including charts to show how the rate has moved over the last 3 months, and the forecast for whether exchange rates will go up or down during 2014.


Rates to buy Euros with Pounds are around the best they have been for over a year. This is due to the strong UK economy. Even data today that showed the Eurozone is growing at a faster rate than expected did little to dent the rate, and we remain around €1.22. 

It's hit these levels several times over the last few months only to drop away again. Whether that will happen again, or if these levels will now be sustained remains to be seen. The BoE hi…

GBP/EUR rises to €1.22 after BoE Inflation report

Wednesday 12th February 2014 
Sterling has gained significant strength today following the Bank of England’s inflation report, and the press conference by Governor Mark Carney that followed. In today’s post I will look at exactly what he said, the effect it had on Sterling exchange rates, and what may happen to currency rates in the coming weeks. 

Pound gains strength on Mark Carney’s BoE speech. 

This morning at 10.30am the Bank of England published its quarterly inflation report, and this was followed by a speech from the BoE governor Mark Carney. You can read a full report on his comments here on the BBC website.

In effect the speech caused the Pound to rise against other currencies by around 1%, pushing GBP/EUR rates to €1.22 and GBP/USD up to $1.6550 – excellent buying levels for both currencies. 

The main reason for the gain was an increase in the UK’s growth forecasts. The Bank revised up its projection for UK growth to 3.4% this year, from a previous projection of 2.8%. This gave S…

Will the Pound go back up against the Euro 2014?

Monday 10th February 2014 
Good afternoon. It’s been a very quiet start to the week, with no significant data releases, and so exchange rates haven’t varied much today. 

Sterling/Euro remains a little above €1.20 and Pound/Dollar sits at $1.64. Other currencies such as the Australian Dollar (AUD), New Zealand Dollar (NZD), and South African Rand (ZAR) etc. are still very cheap to buy, following a weakening of many of the world’s emerging economies.

This week will be key for how the Pound/Euro rate in particular performs over the coming weeks and months, as we have key data from the Bank of England (BoE) and European Central Bank (ECB). 

Below I have listed all this week’s data that I think will have an effect on exchange rate. To discuss your particular currency requirement, and how economic data could affect your rate, click below to send me a free enquiry. I can explain the options, discuss which way the market may go, and provide you a quote that could be up to 5% better than your ba…

Pound falls below €1.20, will it rise again?

Thursday 6th February 2014
Sterling has fallen below the €1.20 mark today for the first time this year. The reason for the fall was Euro strength following their decision not to raise interest rates. In today’s post I am going to look at the central bank decisions in both the UK and EU, and have a look at what this means for GBP/EUR exchange rates for 2014.

European Central Bank holds interest rates, GBP/EUR drops

The European Central Bank (ECB) has kept its benchmark interest rate at 0.25% today. The bank last cut rates to a record low in a surprise decision in November. Following low inflation numbers from the Eurozone in recent weeks, there was much speculation that the ECB would have to cut interest rates. 

As this was quite likely, the cut was already priced into the markets. A cut would weaken the Euro due to the lower return on offer for investors, and so because many thought a cut was on the cards, the Euro weakened accordingly and Pound/Euro rates rose to €1.22 last week. 


Why has the Pound dropped from €1.22 to €1.2050?

Monday 3rd February 2014
Since my last post we have seen further volatility in the Pound/Euro exchange rate. On Friday we saw rates hit €1.22, but the spike was short lived as has often been the case in the last few months. In trading today, rates fell quite a bit, falling to €1.2048 at the time of writing. 

In today’s post I’m going to explain what caused rates to rise only to quickly fall back away again. I will also look at what data is due this week that I think will affect exchange rates. 

Pound/Euro hits €1.22 on EU inflation data. 

On Friday we saw some very low inflation figures from Europe, which mean the European Central Bank may take action to help protect the eurozone's fragile recovery. Official figures showed that eurozone inflation fell to 0.7% in January, down from 0.8% in December and further below the ECB's 2% target. 

It has fuelled worries about whether the euro bloc could suffer deflation, potentially de-railing economic growth. As such, the only tool in the EC…