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Showing posts from March, 2015

UK growth figures push GBP/EUR above €1.38

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We’ve seen a spike in GBP/EUR rates during trading today, pushing up nearly 2 cents from 1.3650 to 1.3830 as the chart below shows: 



UK Growth revised up 
The reason for the steady gain for the Pound was this morning’s figures that showed UK's economy grew at a faster pace than initially estimated last year. You can read a full outline of the improved growth figures here on the BBC website.

I’m still of the view that Sterling will struggle to gain given the upcoming election uncertainty that’s likely to last until the end of May. Still, those with Sterling to convert to Euros should consider taking advantage of this spike in the markets. 

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Sterling/Euro exchange rates & the General Election

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Monday 30th March 2015
Exchange rates have been a little more stable in the last week, with the Pound/Euro rate remaining in a 2 cent range between 1.3550 and 1.3750 as the chart below illustrates: 



Interest Rates and Exchange Rates
In my last post, I pointed out the Bank of England’s chief economist had warned interest rates may need to be cut to combat zero inflation. Well on Friday the day after my post, the governor Mark Carney said precisely the opposite, which is that the next move in interest rates will likely be up. 

Interest rate speculation has been a major driver of Sterling strength of late, and the comments on Friday caused the Pound to recover. It should be noted though that 2 of the main decision makers within the BoE seem to be at odds with regards to which way the rate will go, which is only going to create more uncertainty. The fact remains that if the numbers continue to show inflation so low, a cut is more likely and this could weaken the Pound. 

General Election and …

Pound/Euro falls into €1.36's - will it go back up?

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Monday 23rd March 2015 
The last week was an interesting one for the Pound, with exchange rates falling against other currencies. Against the Euro, the recent highs of €1.40+ now seem a distant memory, with the pair falling throughout the week, and the decline has continued this morning with rates dropping into the €1.36’s: 




Why has the Pound fallen against the Euro, and will it go back up? 
There were two main reasons for last weeks continued drop in GBP/EUR rates. The first issue was a UK unemployment release. In the press it was hailed as good news, and indeed unemployment has fallen again. However what was important was that average earnings were actually quite a bit below forecast. This caused investors to sell the Pound and it duly weakened against other currencies. 

The other issue is the Bank of England’s chief economist warning that interest rates might have to be cut to combat low inflation. This is a far cry from this time last year, when the Pound was gaining due to speculatio…

Pound/Euro rates drop to €1.39

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Tuesday 17th March 2015
The spike of last week to €1.4255 appears to have been short lived, with the Pound falling during trading on both Monday and Tuesday, testing the €1.40 level before breaking below it. The drop continued today and at the time of writing the rate is a little above €1.39: 



Why has the rate fallen? 
It’s to do with events in Europe, the USA and the UK. Over in the EU the recent QE programme has been well accepted, and this shows confidence that the Eurozone will sort out their issues and return to growth. This view was supported with economic data released this morning, showing better than expected numbers for consumer sentiment, inflation, and employment. The better numbers have given the Euro back some strength, dragging down the GBP/EUR rate. 

Over in the USA, there are nerves ahead the FED’s meeting tomorrow, halting the Dollar buying and in turn Euro selling. The Dollar has weakened a little after weaker than forecast manufacturing, industrial output and housing d…

Pound/Euro €1.42, Pound/Dollar below $1.50

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Wednesday 11th March 2015 
I read today that a pretend €100.00 euro note from a toy shop was accepted by a business in a County Down town in Ireland to purchase a sandwich. In the real world, it almost seems that an actual €100 Euro note isn’t worth much more, given the pounding the single currency has taken in the last few days! 

Since Monday alone, the weakness in the single currency has meant that the Sterling/Euro rate has risen from €1.39 hitting a high of €1.4255 before dropping back away:

Even today we’ve seen a rise from 1.4075 to 1.4250, before levelling back off to where we are now in the low €1.41’s. What an incredibly volatile few days. We are now seeing a new 7 year high on GBP/EUR, and in 2015 alone we’ve seen the exchange rate rise from €1.27 to the current highs above €1.40. To put this into real terms, a €300,000 property abroad is £25,000 cheaper than in January. 

Why has the Pound/Euro rate risen above €1.40? 
The fact the rate has smashed through the 1.40 mark and sus…

Sterling/Euro rates near €1.41!

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Tuesday 10th March 2015 
A very brief update this afternoon to say the Pound/Euro rate has risen by almost 2 cents today, pushing through the €1.40 barrier and onwards towards €1.41 – a fresh 7 year high and the best rates have been now since the end of 2007: 



The pound has been gaining all day after the European Central Bank (ECB) began its government bond buying programme earlier this week. This also after the head of the eurozone finance ministers' group called on Greece to "stop wasting time" and engage in serious talks on reform. 

I’ll post a more detailed update tomorrow afternoon, as my time today has been spent on the trading floor assisting clients with Euro purchases. We’re offering trading levels of €1.40+ today and needless to say we have been very busy indeed performing a record number of GBP/EUR trades. 

Do you need to convert currency at the best exchange rates? 
If you have a currency transaction to perform, would like a quote, or to simply discuss the market …

Pound/Euro breaks through €1.39 - will it last?

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Friday 6th March 2015
In the last few days the GBP/EUR exchange rate has climbed further, today briefly going through the €1.39 level before dropping back away. As we’ll see in a moment there are 2 reasons for the gains; weakness in the Euro caused by the European Central Bank (ECB) Quantitative Easing programme, and better than expected US Jobs data driving investment from the Euro, and into the US Dollar. Here’s how the GBP/EUR rate has moved this week: 


ECB Quantitative Easing 
This week the European Central Bank (ECB) confirmed it will start its €1.1 trillion Quantitative Easing programme, following the UK and USA that did the same a number of years ago. The aim is to spur an economic recovery by printing money and buying government backed assets. They have done this despite raising their growth forecasts. They stated yesterday that they would continue QE even if the economy showed signs of recovery. 

This weakened the Euro further, pushing the GBP/EUR rate above €1.38 in trading on …

Pound/Australian Dollar drops as RBA leaves rates on hold

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Tuesday 3rd March 2015
At 3:30am this morning the Reserve Bank of Australia announced its decision on interest rates. The consensus was that they would cut rates to 2.00%, and that had already been priced into the market as it was widely expected. However, the RBA decided to leave rates on hold at 2.25%. 

Australian Inflation had fallen to a 6 year low, and the lack of Chinese demand had meant everyone thought a rate cut was on the cards in order to boost their cooling economy. It looks however like they are hoping the rate cut in China will boost demand. 

What does this mean for the GBP/AUD exchange rate? 
It caused the Australian Dollar to gain strength, and as you can see from the chart below the GBP/AUD rate fell from $1.98 to the low $1.96’s. You can see the immediate drop the moment the decision was announced: 


What's happening with Sterling/Euro rates?
The Sterling to Euro exchange rate over the last week has continued to strengthen, touching €1.38 over the weekend before dropp…