Showing posts from September, 2014

GBP/EUR and GBP/USD forecast outlook

Tuesday 30th September 2014 
Good afternoon. It’s been a busy day in the currency markets, with Pound/Euro rising to €1.2850 but Pound/Dollar dropping to $1.62. in today’s post I will take a detailed look at both these currency pairs, what is causing the rate to move, and where I think rates could head in the coming months. 

As you can see from the chart below, we have seen this exchange rate rise by a point in the last 24 hours. On the one hand the upwardly revised UK growth forecast has given Sterling a slight boost, but it was mostly to do with a weakening Euro. 

Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years. It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral. Earlier this month, the European Central Bank cut its benchmark interest rate to 0.05%, and introduced new stimulus measures in an attempt to kick-start the eurozone economy. 

Due to this poor Eurozone…

Pound/Euro hits new 2 year high €1.28+

Thursday 25th September 2014 
The Pound/Euro rate has surged today, smashing through the €1.28 level to a fresh 2 year high. In fact this is now very close to the best Euro buying rates we’ve seen in 6 years. 

Pound/Euro level breaks €1.28, why has this happened? 
There are 2 reasons for the rise, and both involve the heads of Central banks. Early this morning we saw the European Central Bank president Mario Draghi give a speech, in which he said that they were willing to instigate further stimulus measures if necessary. In other words, it’s likely they will pump money into the economy to try and spur it along, and this has weakened the Euro making it much cheaper to buy. 

He said that "We stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation". He also forecast only modest growth in the second…

Will Pound go up or down for rest of 2014?

Tuesday 23rd September 2014 
As I write today’s post Ed Miliband is giving a party conference speech. I’m choosing this time to write my report as I don’t think his words will have any effect on exchange rates whatsoever, and the currency markets will also be taking little interest in his comments. It is likely however that with the Scottish referendum now out of the way, political uncertainty ahead of next year’s General Election will start to affect the Pound. In today's post I'll give my views on what could move exchange rates for the rest of the year.

The currency markets don’t like uncertainty, and I think that is keeping the Pound in check from going any higher. Following last week’s spike in the Pound, exchange rates now seem settled at around €1.27 vs the Euro and $1.6350 against the US Dollar. 

One example of the uncertainty relating to the UK economy, is possible constitutional changes in the United Kingdom following the Scottish referendum. This could affect investment…

Pound rallies after no vote, but spike is short lived

Friday 19th September 2014 
Well that was certainly an interesting week in the currency markets. Not since the crash of 2008 have I seen such large volatility and huge amounts of my clients securing currency to protect against adverse exchange rate movements. Having been on the trading floor for over 24 hours in the last 2 days I'm about ready for the weekend!

So now we know, Scotland will remain part of the United Kingdom. I thought it was likely the No vote would win the day, and that is what we have seen. 

What effect did the No vote have on exchange rates? 
Over the last few weeks Sterling has dropped a little on fears that Scotland would vote Yes for independence. Last night when it became clear Scotland would vote against leaving the union, Sterling spiked to multi-year highs against the Euro, as the chart below shows: 

However the spike was short lived. I warned earlier in the week that in the event of a No vote, we would probably see a slightly spike in Sterling but it would t…

GBP/EUR breaks €1.27 - 2 year high. Exchange Rates Forecast 2014

Thursday 18th September 2014 
Today is the day of reckoning for Scotland, and the currency markets are going to be very susceptible to the result, whichever way it goes. Let's have a look at how Pound/Euro and Pound/Dollar rates are faring ahead of tomorrow's result:

We’ve seen a spike in Pound/Euro rates today, and at the time of writing GBP/EUR sits at 1.2720 - this is the highest in over 2 years. in fact if you look further back at average rates, we're within around 1 cent of the highest Pound/Euro rate in 6 years. That was back in October '08 when the credit crunch hit destroying the value of Sterling.

Part of the spike is weakness in the single currency, but mostly it is the Pound that has been gathering strength as a ‘No’ vote for Scotland is being priced into the market. 

This is the highest it’s been in well over 2 years. Today alone we have secured a record amount of Euros for clients and this is for 2 reasons. Firstly it’s the best it has been in ye…

Protect your currency requirement against Scottish Referendum

Tuesday 16th September 2014 
Good afternoon. Significant volatility remains in the currency markets, with the Pound/Euro rate continuing to fluctuate in value due to uncertainty over the Scottish referendum. 

Pound/Euro over the last week 
As the chart below shows, the last week has been very choppy for Sterling Euro. We have seen a low of €1.24, a high of €1.26, and in just the last 24 hours it’s moved up and down by nearly a cent. 

These movements are being driven by investor sentiment as the Pound is bought and sold on speculation on what may happen with this week’s Scottish referendum vote. 

What would happen to the Pound if the vote is Yes? 
It is of course impossible to predict which way exchange rate moves, if it were possible I would not be writing these market updates from the trading floor, I would be relaxing on my super yacht in the Mediterranean! What we can do is take a view on what may happen with exchange rates, and explain the tools available to protect against the rate mov…

Exchange Rates Forecast: Scottish Referendum/Central Banks

Wednesday 10th September 
Good afternoon, and welcome back to my regular currency updates which will resume my blog today. I’ve been in Europe for a week so apologies for the lack of news in recent days. 

Much has happened since I’ve been away however that has had a big impact on exchange rates, so I’ll run over the recent developments and what this means for the Pound against other currencies. The main topic is the Scottish independence vote, so read on to find out how this might affect Sterling. 

If you're reading this, you probably have an interest in which way the exchange rate is going, and in turn want to achieve the best exhcange rate you can, at the right time. Click here to send me an enquiry, have a free consultation, and a quote on the exchange rate I can offer you. 

The topics I’m going to cover today are as follows: 

ECB cuts interest rates Mark Carney signals no interest rate rise until 2015 Scottish independence vote causing big swings for the Pound 
ECB cuts interest rat…

Pound/Euro forecast September 2014

Monday 1st September 2014 
Good morning and welcome to a new month. Pound/Euro rates have started quite strongly at €1.2650 due to a weakening Euro, but Pound/Dollar remains low at just above $1.66. In today’s report I will outline what has pushed GBP/EUR rates higher, the forecast for September, along with this week’s data releases that could affect exchange rates. 

Pound/Euro up to €1.2655 
After a few weeks of decline in the GBP/EUR rate, this morning we saw it recover back close to 2 year highs. This is partly due to the crisis in Ukraine and the risks this presents to the EU recovery. 

The main reason why the Pound has risen against the Euro is weakness in the single currency. Low inflation means that the pressure is on the European Central Bank to provide further stimulus which could take the form of Quantitative Easing. They will announce whether they will do so at a meeting on Thursday. If they do announce stimulus, expect the Euro to weaken and Pound/Euro rates to rise. 

However, …