Showing posts from March, 2014

Will exchange rates go up or down this week?

Monday 31st March 2014 
We have seen the Pound slide off a little at the start of the trading week, with GBP/EUR falling from €1.21 down to €1.2050, a drop of around 0.4%. This was mainly due to consumer credit being lower than expected, reflecting a lack of confidence surrounding the UK economy. This afternoon however it's bounced back to where we started around the €1.21 level, so all in all no change.

There are lots of economic data releases this week that could affect exchange rates, so as usual for a Monday I am going to list what I think are the most important releases, and analyse how this could affect the currency markets. 

If you need to convert one currency to another, on a bank to bank basis for volumes between £5k and £10m, then read on, as my thoughts below can help you decide when may be the best time to fix your rate. Get in touch if you would like a quote, or to discuss your currency requirement with me in detail.

This weeks economic data releases...

Monday 31st March …

Pound/Euro exchange rates - €1.21

Friday 28th March 2014 
Sterling has risen to €1.2120 against the Euro, before dropping back away this afternoon. In today’s post I’ll look at this weeks figures that have caused the Pound to gain, and run over the tools I can provide to help you achieve the best foreign exchange rates in 2014 

Sterling/Euro hits €1.21 

The Pound has risen to €1.21 in the last few days, helped along by some very strong Retail Sales figures. Since the Pound/Euro exchange rate had rate dropped below €1.20, it stayed below that level for over a week, hitting resistance every time it threatened to break through. It was the significantly better than forecast Retail Sales figures that finally gave the Pound the push it needed. 

Once it had broken through the resistance level, it kept rising over €1.21 briefly, before some less impressive UK figures caused it to drop back again. 

Poor deficit and GDP figures halt Sterling’s rise 

Figures this morning showed that the UK's current account deficit was much large…

Sterling breaks through €1.20 after Retail Sales figures

Thursday 27th March 2014
Good morning - a quick update as we have just seen UK Retail Sales released, smashing expectations and giving the Pound a large boost - up to almost €1.21 against the Euro at the time of writing.

We expected the numbers to show monthly increase in Retails Sales of 0.5%, and an annual increase of 1.7%. The actual figures were 1.7% and 3.7%, which were significantly above forecast. 

The result for Sterling was a large spike in exchange rates, as you can see from this GBP/EUR chart:

So after more than a week of the Pound struggling to break through the €1.20 barrier, this has now happened due to the much better than expected data. Personally I'm surprised it broke through this barrier so quickly, but then nobody expected today's figures to be so strong.

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EU hints at rate cut, but GBP/EUR won't break €1.20

Tuesday 25th March 2014 
Good afternoon. We have seen a little volatility today with Pound/Euro rates rising from €1.1920 up to €1.20, before hitting resistance and falling back away. Pound/Dollar continues to trade around the $1.65 mark. 

In today’s post I’m going to explain what caused the swing in GBP/EUR rates. First, let's look at today's GBP/EUR chart. In it you can see rates rising to €1.20 before falling away. I will explain why in a few moments...

UK Inflation better than expected 

First let's look at UK data. In my post yesterday I outlined that one of today’s key data releases was UK inflation, mentioning that if the figure was higher than 1.6% the Pound would strengthen. 

The actual number came in at 1.7%, so slightly above forecast. This gave the Pound a little push from €1.1920 up to €1.1945 – a small gain, reflected in the small increase in the inflation rate. 

You can read a full report about the inflation numbers here on the BBC website

EU President gives speech…

What could move exchange rates this week?

Monday 24th March 2014 
Good afternoon. It’s been a pretty quiet day with not much change in exchange rates since my post last Thursday. Pound/Euro remains at €1.1950, and Pound/Dollar remains at $1.6500. 

With regards to whether Pound/Euro rates will recover any time soon, my view hasn't changed. I don't think it will go back through €1.20 unless we get some economic data that is significantly better than forecast. 

In the absence of anything new to move the markets, today I will list all the weeks’ data that I think might affect exchange rates this week. UK GDP data and a speech by ECB president Mario Draghi could both affect GBP/EUR exchange rates moving forwards. 

This week’s economic data releases that may affect exchange rates. 

Monday 24th March 2014 

Exchange rates have been relatively flat today, however we did see a raft of Inflation data from the Eurozone this morning. The figures were a little lower than expected, weakening the Euros and pushing GBP/EUR rates from 1.19…

Pound/Euro €1.20 Pound/Dollar $1.65 (Support & Resistance)

Thursday 20th March 2014 
Things have settled down in the currency markets after the economic data released yesterday. Pound/Euro is at €1.20, and I don’t expect it to go higher in the short term. Pound/Dollar has dropped to $1.65. 

Today I’ll take stock of where exchange rates stand, explain something called ‘Support and Resistance’ which is limiting the rate going higher, and look at how to ensure you get the best possible exchange rate. 

Sterling/Euro rates hit a resistance barrier at €1.20

As outlined in my post yesterday, the warnings from the Bank of England about the strength of the Pound have been limiting any gains. It has crept up a little more today, hitting €1.20 before dropping back slightly. This is what I thought would happen earlier in the week. 

So why is it hitting the barrier at €1.20? It’s to do with something called resistance. For those interested in the technical side of it, you can find a detailed explanation of Support and Resistance here. 

The chart above shows to…

Pound/Euro exchange rate forecast for 2014 changes after BoE comments

Wednesday 19th March 2014
It’s been a very busy day in the markets today, with UK Unemployment being released, along with the Bank of England minutes, a speech by governor Mark Carney, and of course the budget statement. This afternoon I will look at the effect each event had on exchange rates, and how this has affected my view on where rates are headed. 

First, let’s look at today’s GBP/EUR chart that reflects how exchange rates were affected: 

Mark Carney warns against strong Pound 

As you can see from the chart above, as soon as the market opened at 8am this morning, the Pound started to strengthen as I predicted it would yesterday. This was due to comments last night by BoE governor Mark Carney, in which he said the current low interest environment won’t be around forever. This gave the Pound strength on speculation of interest rates going up. 

It didn’t last long, and as you can see from the chart above, when the MPC minutes were released, it shows that many of the BoE members are con…

Will Pound go up or down against Euro this week?

Tuesday 18th  March 2014
The Pound has fallen again today, dropping as low as €1.19 before settling at that level. There hasn't been any data of note from the UK today, so this is simply the market positioning itself ahead of tomorrows key day for the currency markets. 

What will affect exchange rates in the next few days?

The next 24 hours will be key for exchange rates, so the following information is important if you need to buy or sell currency at the best exchange rates. Firstly I will look at the key events, and what effect they may have on the market. I will then give my view on what effect this could have on rates, specifically the Sterling/Euro exchange rate. 

Later this afternoon at 17:45pm we have a speech by Bank of England governor Mark Carney. This could affect exchange rates depending on his comments. If he were to be very upbeat about the UK economy including growth forecasts, then we could see Sterling bounce back. What we're looking for is any hints that interest…

Pound falls further in what is an important week for Sterling

Monday 17th March 2014 
Good afternoon everybody. The UK has been basking in unseasonable sunshine over the weekend, however Sterling has remained firmly in the shade. We have seen the Pound drop further today against the Euro and other currencies, ahead of what I think will be a key week for UK economic data releases, and therefore Sterling exchange rates.

Pound/Euro has fallen to 1.1940. Pound/Dollar remains in the mid $1.66’s. In today’s report I am going to run over the week’s economic data and how it might affect exchange rates. 

There are lots of very important releases this week that will affect the Pound, including a Bank of England report, the latest Unemployment data, and George Osborne's budget just to name a few.
Will the Pound fall further? Could it bounce back? How to know when to fix a rate? Do you want to get the best exchange rates? The below data will determine the answers to these questions, so read on to find out more about how this week could affect you getting th…

Sterling/Euro drops below €1.20

Wednesday 12th March 2014 
The Pound/Euro exchange rate has continued to fall since my post last week, and has fallen below the €1.20 level for the first time this year. Several weeks ago I warned that there was a good chance the rate was about to drop, and that is what we have seen. 

In today’s post I will analyse the reasons for the drop, go over what options are available to protect against rates moving against you, and look at what other economic data is due this week that could affect rates. 

Pound/Euro drops below €1.20

For the first time this year, GBP/EUR rates have fallen back into the €1.19’s. Only a few weeks ago we were at highs of €1.22+. The rate started to decline last week when the ECB president Mario Draghi gave a very positive press conference about the Eurozone economy, as I outlined in a recent post.

Since then, industrial production figures from the UK and EU have caused the exchange rate to drop further. The UK released its figures yesterday, and as the number was wor…

Pound/Euro exhange rates drop after ECB comments

Thursday 6th March 2014 
As I predicted in my post yesterday, Pound/Euro rates have fallen away after the European Central Bank did not cut their interest rate, and gave no hint that it would be doing so anytime soon. You can read his full statement here

As you can see from the chart below, rates started falling at 13:30pm when the ECB president Mario Draghi began his press conference. 

So why exactly have GBP/EUR exchange rates fallen? 

It’s all to do with the fact interest rates have a key effect on the value of a currency. Higher interest rates attract investment, strengthening a currency. Lower interest rates weaken a currency due to the lower return on offer. 

Data in recent weeks had shown that Eurozone inflation was at 0.8%, well below the ECB's 2% target which has prompted deflation worries. To combat deflation, many thought the ECB would have to cut interest rates. The rumour of this started to get priced into the market, weakening the Euro and pushing GBP/EUR rates up to €1…

Pound/Euro rises ahead of Central Bank decisions

Wednesday 5th March 2014 
We started this week with some volatility in the currency markets due to the tensions in Ukraine. This has now eased somewhat, and a sense of calm returned, with the United States and Russia set to hold talks on easing East-West tension in Ukraine. 

This morning we had some UK data that showed the UK service sector continued to "expand strongly" with job creation at its fastest pace for four months. The survey also found that confidence in the economic outlook rose to its highest since September 2009. 

This set the day for the Pound, which has steadily risen throughout today as you can see from the chart below. At the time of writing Pound/Euro rates have risen to 1.2177 and Pound/Dollar is back above 1.67. 

Central Bank decisions tomorrow could affect Pound/Euro

Tomorrow we will see the latest decisions from the Bank of England (BoE) and European Central Bank (ECB) with regards to interest rates and quantitative easing. I don’t expect any change in poli…

What could affect exchange rates this week?

Monday 3rd March 2014 
It’s been relatively quiet since my last post, and today hasn’t seen much economic data that has affected exchange rates. We have not seen the Pound make any further gains, and we currently have GBP/EUR rates around the 1.2140 mark, and GBP/USD rates a little above $1.67. 

In today’s post, I will have a look at upcoming events this week that I think will have an impact on rates, including economic data releases and the current instability in Ukraine. 

Instability in Ukraine to affect exchange rates 

There are various things that affect exchange rates. Economic data is the main one, and in a moment I’ll analyse what we have due to be released this week that I think will move FX rates. 

Other things that can affect currency rates are natural disasters like floods and droughts. Political events like elections and new policies. Finally terrorism/instability and acts of war can also have an impact. 

Dominating the headlines at the moment are events in Ukraine. How could th…