Showing posts from December, 2014

Pound/Euro remains near 6 year high

Monday 29th December 2014
Good morning and welcome back to the currency markets after the Christmas break. Given the market holidays there has not been much movement in exchange rates, so today’s report is a reminder how you can take advantage of the commercial exchange rates that we can offer. 

Pound/Euro rate near a 6 year high 
2014 has been a good year for the Pound/Euro exchange rate, and we are currently enjoying exchange rates within a few percent of the best they have been in 6 years. In real terms this means a €250,000.00 property overseas now costs a staggering £20,000.00 less than last summer, purely due to exchange rate movements. The Strong Pound is really driving the overseas property market and there has rarely been a better time in recent years to purchase a property abroad. 

Despite the good Pound/Euro exchange rate however, it has failed to go any higher in recent months. In light of this, it’s an opportune moment to look at the tools and contract types a specialist curr…

Pound/Euro rises to €1.2750 on strong UK Retail Sales

Thursday 18th December 2014 
The Pound has had a good day today, particularly against the Euro. This morning we saw figures that showed UK retail sales rose at their fastest annual rate in more than 10 years last month. We were expected the number to show +4.5%, and it actually came in at 6.9%. This is partly due to the effects of Black Friday. 

Retail Sales are a good overall barometer of economic health, and so strengthens a currency when the numbers are better than expected. This caused Pound/Euro to rise from €1.26 yesterday, to €1.2752 at the time of writing. The other reason for the strong performance for GBP/EUR today is seasonal end of year demand for Sterling, and further speculation that the European Central Bank will have to conduct easing measures to prop up the EU economy. 

It should be noted that this trend has repeated itself several times in recent months, with the Pound/Euro rate getting to these sort of levels, before dropping back to the €1.26 mark again. For this reas…

Oil Prices and Central Banks affect exchange rates

Tuesday 16th December 2014 
It’s been a pretty choppy day in the currency markets, with news from Central Banks and oil prices causing quite a bit of exchange rate volatility. Today I’ll look at what has been happening with some of the main currency pairs. If you need to buy or sell any major international currency, I can source exchange rates up to 4% better than banks can offer. Contact me today to find out how I can help.

Pound/Euro rates seem to have been sliding lower over the last few months, and currently stuck between €1.25 and €1.26 which is several cents below the 6 year high of €1.29 we saw in the summer. It’s about the Bank of England and interest rates. In the summer analysts expected a rate hike before the end of the year, and this had caused the Pound to rise in value. It now looks like a rate hike is now some way off, and this has caused the Pound to drop off. 

Today we saw inflation fall even lower, down to a 12 year low caused by lower fuel prices. This c…

Pound falls on poor manufacturing data

Tuesday 9th December 2014 
Yesterday's gains for the Pound and Sterling/Euro in particular were again short lived, with the GBP/EUR exchange rate today dropping back towards €1.26: 

UK Industrial and Manufacturing production disappoints 
The reason for the drop today is due to worse than expected UK Industrial and Manufacturing.  As the figures were lower than expected it weakened the Pound pulling exchange rates lower. This is because expectations of when interest rates may start rising will most likely be pushed back in the light of the poor figures. The Bank of England has signalled it will keep interest rates low well into 2015 as earnings struggle to grow more than inflation. 

The UK GDP estimate released at 3pm today was as expected, so didn’t have any effect on exchange rates. 

Pound/Dollar up 
This afternoon, we saw some Euro strength which pushed GBP/EUR lower, and caused flows out of the US Dollar. This caused the GBP/USD rate to recover to the $1.57 levels. 

Getting the best …

Sterling rises on Interest Rate comments

Monday 8th December 
The Pound has had a good start to the week, rising by nearly a cent against the Euro to 1.2720 and also up against the US Dollar, from 1.5550 this morning to 1.5630 this afternoon: 

What has cause the Pound to gain against EUR & USD? 
There hasn’t been any significant data today, so I’ve put the rise down to comments from the Bank of England, that say the UK economy can cope with higher interest rates. They’ve stated that the majority of people with mortgages could cope with a rise in interest rates, if levels rose to 2.5% from their current 0.5% historic low. 

The comments mean there is more chance of a rate hike in the first half of 2015 and the Pound strengthened accordingly. (A currency strengthens on the rumour of higher interest rates, as it attracts investment into the Pound due the potential higher return on offer). 

It’s worth noting however that the Pound/Euro cross seems to be range-bound between 1.25 and 1.28 at the moment, so I don’t think we’ll see ra…

Pound/Euro gains before dropping back to €1.26 again

Thursday 4th December 2014
It's been a busy week, but all in all we're back to where we started with GBP/EUR rates, now sitting around the €1.26 level again. Let's take a look at what's been happening. 

Autumn Statement causes Sterling to rise
Wednesday was a good day for the Pound, starting with better than expected services PMI that gave the Pound a boost. This was compounded by the budget statement, which the markets took very positively for the Pound and GBP/EUR rose by over 1% on the day, getting to 1.2766 at the peak. However as is often the case, spikes to the upside can be very short lived and this proved to be the case again during trading today, when the ECB's draghi made comments that pulled the rate back towards the €1.26 level. 

What caused the GBP/EUR rate to fall? 
It was largely comments by the European Central Bank (ECB) president Mario Draghi. As always for the 1st Thursday in the month, the UK and EU central banks announced their decision on interest …

How will the Autumn Budget Statement affect exchange rates?

Tuesday 2nd December 2014
There are 4 things that generally affect exchange rates like Sterling/Euro, Sterling/Dollar etc. These are: Economic figures such as unemployment numbers, interest rates, Retail sales etc. Then we have natural disasters such as floods, famine and droughts that can affect the economic output of a country and in turn the value of its currency. Thirdly acts of war have an effect as it can drive investment in or out of a country. Lastly there are political events that can affect an economy. A good example of this would be this years Scottish referendum, that caused large fluctuations in the exchange rate. Political instability is the theme of today's post...

UK Autumn Budget Statement 
At 12.30pm tomorrow afternoon (Wed 3rd December 2014) the chancellor George Osborne will deliver his Autumn budget statement, and this has the potential to affect the currency markets and the value of the Pound. In turn, we could see volatility in exchange rates should there be a…

What could affect exchange rates this week?

Monday 1st December 2014 
Good afternoon and welcome to a new month. The currency markets have been relatively stable over the last week, with GBP/EUR remaining around the €1.26 mark, and GBP/USD in the $1.57’s. 

In today’s post I will list the economic data releases for the coming week that I think could affect exchange rates. 

This week’s economic data releases 
Tuesday 2nd December – Today is quite light for UK data, with Construction PMI the only release of note. We’re expecting the number to be 61.2 so anything above this could give the Pound some strength. In Europe, Spanish employment numbers are released. Australia has its latest building numbers, along with an Interest Rate statement from the RBA. Over in the United States there are 2 speeches by FED members, and also the chair Janet Yellen, so GBP/USD could be affected. 

Wednesday 3rd December – This could be an important one for Sterling, as we have Services PMI and the Autumn forecast Statement. GBP/EUR could also be affected b…