Showing posts from January, 2015

Pound/Euro hits €1.35 forecast for 2015

Wednesday 28th January 2015 
In my last post at the end of last week I explained that the European Central Bank (ECB) announcement of a Quantitative Easing (QE programme) had weakened the Euro and pushed the GBP/EUR exchange rate to €1.32. 

I’ve been away from the trading floor on holiday for a few days, but the currency markets have continued to show volatility, with the Pound/Euro rate climbing and briefly touching an incredible new 7 year high of €1.3500 before dropping back away due to growing uncertainty over what the result of the Greek election means for the EU economy.

Greek election causes Euro to weaken further 
At the weekend the Greek Syriza party came to power, and this has caused significant weakness in the Eurozone. You can read a good overview on what’s been happening here on the BBC website.

As far as exchange rates are concerned, the news has caused the Euro to weaken and become cheaper to buy. At one point we briefly saw Sterling/Euro rates hit €1.35 before dropping ba…

Pound/Euro hits €1.32 after QE announced by ECB

Thursday 22nd January 2015 
The European Central Bank (ECB) today announced its Quantitative Easing (QE) package, outlining over €1tn of stimulus for the economy. It’s been the main driver of exchange rates in recent weeks and today it became a reality. You can read a very good outline of the measures and how they work here on the BBC website. 

What has it meant for exchange rates? 
The Euro has weakened as markets expected it would. As you can see from the chart below, Pound/Euro rates have risen to a new 7 year high of €1.32, so fantastic rates for Euro buyers: 

Will it go higher or drop back down? 
I can’t see rates going that much higher, and given the GBP/EUR cross is now comfortably above the €1.30 benchmark, I think it will stay at this level. For this reason anyone that needs to buy Euro soon should consider fixing a rate while it’s so good. If you want to gamble on the hope of higher rates, then you should place a ‘Stop Loss’ order to protect against rates going back down. 

Euro …

Pound/Euro exchange rates drop back below €1.30

Wednesday 21st January 2015
Today we have seen economic data that has pushed the GBP/EUR rate back below the key €1.30 level. Let’s take a look at why the Pound has fallen against the Euro, and which way the currency pair may move in the coming weeks. 

UK Unemployment and Interest Rates 
At 09:30am this morning the latest UK Unemployment figures were released, showing a drop to just less than 2 million, which is the lowest level for more than six years. However there are signals that growth in employment may be easing, as this drop is the smallest since the three months to September 2013. 

Also this morning we saw the Bank of England keep interest rates on hold, as expected, but what was surprising is that all 9 members voted to keep the status quo. Martin Weale and Ian McCafferty, who since August had called for a hike in rates, seem to have changed their mind. As all 9 members voted, it now looks like interest rates won’t be going up in the UK until mid-2016, and as a result the Pound h…

ECB key to GBP/EUR forecast for 2015

Tuesday 20th January 2015 
Pound/Euro rates have risen by a cent today, and at the time of writing GBP/EUR remains stable around the €1.31 level, which is the highest rate to buy Euros since March 2008: 

Will Pound/Euro rates climb or fall? 
We’ve seen a significant rise in rates in the last few weeks, pushing GBP/EUR in particular to the highest we’ve seen in 7 years. Being able to trade at levels above €1.30 is excellent news. The main question now is whether rates will drop back below this level, or perhaps even go higher still. 

The next few days will be key to this. Tomorrow we have a Bank of England decision on interest rates, and the latest Unemployment figures. I think both of these will be a non-event and won’t have much of an impact. 

Of much more significance will be Thursday’s announcement by the European Central Bank (ECB), when they’ll decide whether they will start a Quantitative Easing programme where funds will be created to spur an economic recovery. 

If they do, it will l…

30% Swing on exchange rates this morning! EURCHF GBPEUR

Thursday 15th January 2015 
We have seen an incredibly volatile market this morning, caused by a surprise statement by the Swiss National Bank. More on that in a moment, but to outline how choppy things have been this morning, in just 20 minutes we have seen Sterling/Euro rates go from €1.29, all the way to €1.31 before dropping back and settling below the key €1.30 level. A 2 cent move in such a short time is very unusual:

What’s even more unusual, is the Euro to Swiss Franc (EUR/CHF) rate that has crashed from 1.20, falling all the way to 0.75 before settling at around 1.04 at the time of writing. That’s a fluctuation of 35% in 20 minutes! This is probably the biggest move on any major currency pair I've ever seen. So what's been going on?

Why are the currency markets so volatile today? 
Switzerland, that’s why. The Swiss National Bank (SNB) this morning surprises as all by ending their peg to the Euro, which has been set at 1.20 for 3 years. They also slashed their interest ra…

Sterling rises by over a cent after inflation figures released

Tuesday 13th January 2015 
The Pound has risen well against both the Euro and US Dollar today, pushing GBP/EUR up 1 cent to close to €1.29, and GBP/USD also rose a cent to $1.5165. The rise in exchange rates comes after figures this morning showed that inflation in the UK has fallen to 0.5%, the lowest level on record. 

Why has the Pound risen on the low inflation figures?
The low inflation means that interest rates are very likely to stay on hold for some time to come. Usually this would weaken a currency, so why have the low inflation numbers caused the Pound to rise? 

It’s because the fall is seen as generally good news for the UK economy. Recent figures already indicated that interest rates are likely to stay on hold this year, so today’s figures haven’t changed that view, and that’s why the Pound didn’t fall. What the figures do mean is that spending power in the UK has increased, and this in turn should spur the economy as a whole as people have more disposable income, so things li…

How could General Election affect exchange rates?

Friday 9th January 2015 
Where do things stand with exchange rates? Pound/Euro is hovering around its comfortable level of €1.28 and Pound/Dollar has stopped falling, for now, and sits around $1.5150. Against other major currencies Sterling is actually quite weak have fallen against most currencies. It’s only weakness in the Euro that’s keeping GBP/EUR supported at the current near 6 year high. 

The Pound could struggle this year for several reasons which I’ll look at today. Remember that if you want to achieve the best exchange rates, click here to send me a free enquiry, get a quote, and find out more about the commercial exchange rates I can offer.

How General Election could affect Sterling exchange rates When will interest rate go up, and will the change Pound/Euro QE in Europe and will this make GBP/EUR rates go up Pound/Dollar will it drop below $1.50 
Election uncertainty could weaken the Pound 

Political uncertainty is one key thing that can weaken a currency, and this year’s elec…

Pound continues to fall against Euro and US Dollar

Tuesday 6th January 2015 
Sterling initially had a good start to 2015 against the Euro, hitting highs of over €1.29 on Friday. As has been the case of late however, when it tested these highs it quickly dropped back away again. Against the US Dollar, the Pound has fallen to its lowest in well over a year. Let’s take a more detailed look at what’s been happening. 

The Euro is fundamentally weak at the moment, and this is reflected in its value. Over the New Year, comments from the European Central Bank president Mario Draghi indicate they are getting closer to a Quantitative Easing stimulus programme. This weakened the single currency and made it cheaper to buy. There are also the Greek elections later this month, with a strong chance the anti EU party could win. This also raises questions about a possible Greek exit from the Eurozone, and this is also keeping the Euro on the back foot, pushing GBP/EUR rates to above €1.29 last week: 

The gains were short lived as is often t…