Showing posts from February, 2015

Pound/Euro hits €1.36 - will it keep rising?

Friday 20th February 2015 
Sterling/Euro rates have broken through the €1.36 level today, which is a fresh 7 year high. It looks like for the moment the rate is now comfortable above the €1.35 barrier that it had struggled to break through in recent weeks. Now that it’s firmly above this level, it will become a level of support, meaning it’s likely to stay above this threshold and struggle to drop below it should the market fall. 

UK Trade Balance surplus
The Pound gained today partly due to this morning’s Public Sector Borrowing figures. UK government finances showed a surplus of £8.8bn in January, which is the highest for seven years. This better than expected number caused Sterling to gain.

Greece talks 
The main reason for the gains however we’re weakness in the Euro. The ongoing crisis in Greece is causing uncertainty which has been weakening the single currency. Today, Eurozone finance ministers are preparing for a 3rd meeting in order to solve the crisis over Greece's bail-out. 

Pound/Euro hits fresh 7 year highs after strong jobs data

Wednesday 18th February 2015 
Sterling has risen strongly this morning to fresh 7 year highs against the Euro. As you can see from the chart below, GBP/EUR rose from 1.3450 to 1.3560: 

Robust UK Employment figures boost Sterling 

The reason for the rise was 2 fold. Firstly we saw some very robust UK employment figures that were much better than forecast. Average earnings were higher than expected, and the number of people out of work in the UK fell by 97,000 to 1.86 million in the three months to December. Because the figures beat expectations, it boosted Sterling and caused the rate to rise.

Bank of England unanimous to keep rates at 0.5% 
Today the BoE minutes showed that all 9 members voted to hold rates at their currency level of 0.5. However although all nine members of the MPC voted to keep interest rates on hold, two members said the decision was "finely balanced", adding: "Given the outlook for inflation beyond the short term, there could well be a case for an incr…

Sterling/Euro exchange rate forecast

Tuesday 17th February 2015 
In today’s report I’ll take a look at the Sterling/Euro exchange rate forecast, and also what data releases the rest of the week has in store and how they could affect exchange rates. Today the Pound has fallen against other currencies due to the lowest inflation figures on record.

The Pound/Euro rate has been repeating its recent trend of rising above the €1.35 mark, only to drop back away within days. This has happened again this morning, with the rate falling from €1.3550 to €1.3450 over the course of this morning. What’s been going on? 

Continued uncertainty over what is happening in Greece has continued to weaken the Euro, and that’s what keeps pushing the rate higher However with very low UK inflation numbers this morning, the Pound has fallen back away which is why GBP/EUR exchange rates have dropped. To be honest I think sooner or later, the Greeks will reach an agreement with the EU regarding its debts, and when this uncertainty is remo…

Pound surges to €1.3560 after Inflation Report

Thursday 12th February 2015 
We have seen the Pound surge higher today on the back of the Bank of England’s Inflation report. Pound/Euro rates climbed from 1.3410 to a peak of 1.3560, a new 7 and half year high, before settling back down towards €1.35: 

Pound/Euro rates up on Inflation report 
I’m actually quite surprised that the Pound moved so much this morning. In the report, the Bank of England governor stated that inflation in the UK could temporarily turn negative later this year due to the drop in the price of oil, and normally falling inflation would weaken a currency. However he went on to say that for the next few years, growth could be higher than expected at 2.9%. I think it’s this upward revision that caused the Pound to rise because of falling oil prices. 

It also said it sees little need to raise interest rates this year(again, something you would normally expect to weaken a currency) and could even cut them if inflation proves weaker than expected. However it seems that th…

Pound rises to €1.35 – a 7 year high vs the Euro

Tuesday 10th February 2015
Since my post a week ago, as you can see below, the exchange rate has recovered and risen back to its 7 year high of €1.35. 

As we will see in a moment, there are several factors that have caused the gains, including robust UK economic data giving the Pound a lift, the Euro remaining weak due to uncertainty over Greece, and stronger data from the United states which has also caused the Euro to weaken. In today’s report we’ll take a look at what has been happening, and whether the rate could go even higher in the coming months. 

Sterling/Euro for the last 7 days:

UK data impresses and lifts Sterling high 

Of late we have seen strong UK economic data that has served to strengthen Sterling. Better than expected UK manufacturing data this morning helped, which follows on from very robust private sector surveys last week. Manufacturing, construction and services sectors all came in ahead of forecasts in recent days. Also, an economic think tank said Britain's econ…

GBP/EUR drops, GBP/AUD rises, GBP/USD rises - exchange rates 2015

Tuesday 3rd February 2015

GBP/EUR falls into the €1.31’s 
I mentioned in yesterday’s post that the Sterling/Euro rate could be on the way down, and it’s happening quicker than expected. Today we have seen the rate fall a further cent bringing the mid-market level down into the €1.31’s. So, why has the Pound/Euro rate fallen? 

It’s to do with Greece. One of the reasons the rate has risen so well was fears the Greeks could exit the Euro after their recent election was won by the new Greek government, led by the left-wing Syriza party. Today, it seems they have now stopped calling for their debts to be written off, and instead are now proposing the standoff with its official creditors by swapping the debt for new growth-linked bonds. This has been taken as positive news for the Eurozone, and accordingly the Euro has gained strength, pulling rates lower. 

It is impossible to predict of course if the drop will continue, but if the ECB’s Quantitative Easing measures have the desired effect, we…

Sterling/Euro exchange rate forecast Feb 2015

Monday 2nd February 2015
Good morning and welcome to a new trading week. After a very volatile couple of weeks that has seen GBP/EUR hit 7 year highs of €1.35, things have stabilised somewhat, and this morning the rate has dropped back into the €1.32’s. With no significant data of note today, the only thing I can attribute the drop to, is a rumour that the Swiss National Bank will be unofficially targeting a EUR/CHF rate of 1.05

Why has the Pound/Euro rate fallen? 
This is significant as they recently ended their policy of keeping the rate at 1.20. They did this by selling CHF and buying Euros to keep the desired rate. These rumours mean the SNB could be buying huge volumes of Euros to keep the rate where they want it, and this demand for Euros has strengthened the single currency and made it more expensive, hence why this could be the reason GBP/EUR rates have fallen a cent this morning. 

Will the Pound/Euro rate go higher or lower in February? 
All in all, with rates to buy Euro still …