Showing posts from May, 2015

Will GBP/EUR go up or down in June 2015?

Wednesday 27th May 2015 
Sterling/Euro has been holding firm well above the €1.40 mark so far this week, on continued concerns Greece may not be able to make its next debt payments. However this may not last for long, as there are indications Greece are about to strike a bail out deal.

The Greeks have 4 different loans to repay in the next 4 weeks, totalling around €1.6 billion. One payment of €300 million is due in 1 week. There has been talk that they could avoid paying back the IMF next week, lump it all together and make one large payment at the end of June, however they still have to negotiate the funding to do this, which is keeping the Euro weak. 

For most of today and yesterday, GBP/EUR was sat at a 3 month high, and only 1 cent below the best it’s been in 8 years. However the rate has been sliding this afternoon, after Greek Prime minister Alexis Tsipras said his government was "close" to a deal after reports the two sides had begun the process of drafting an agreeme…

GBP/EUR breaks €1.40 on strong UK Retail Sales

Sterling/Euro rates have today pushed through the €1.40 barrier again today, following stronger than expected UK Retail Sales data. This is the 3rd time in the last few months the pair has broken through the key 1.40 level: 

The much better than expected Retail Sales reflect a growing confidence in the UK economy, and as such Sterling has risen against other currencies. Also helping the Pound this week were the minutes to the recent Bank of England decision to hold interest rates. While all 9 members voted to keep rates on hold, it seems for 2 of them it was a finely balanced decision. This means that despite inflation turning negative this week, a 2016 interest rate hike could be on the cards, helping boost the Pound. 

Will Pound/Euro rates remain above €1.40? 
It’s impossible to predict of course, but looking at past performance it’s clear this level has been reached several times in the last few months before dropping back away. The only thing keeping the rate high is uncertainty over…

Pound/Euro exchange rates May/June 2015

Tuesday 19th May 2015
Sterling/Euro rates continue to remain pretty volatile, and in the last 24 hours we have seen the pair rise from €1.3730 to nearly €1.40, which was due to weakness in the Euro. The gains didn’t last long however, and UK inflation figures this morning have weakened the Pound and knocked the rate down a cent, to around €1.3850 as the chart below shows. 

In today’s report I’ll explain what has caused the movements for Pound/Euro rates, and look at where the GBP/EUR exchange rate may move in May & June 2015. 

Euro weakness causes GBP/EUR to rise to nearly €1.40 
Greece has another large debt repayment to make on the 5th of June. Whether they will make it or not is having a big impact on the value of the Euro. The IMF think they don’t have much chance of meeting the payment, and their acknowledgement of this yesterday caused the Euro to weaken, pushing GBP/EUR rates up from 1.3750 to 1.3850. 

The weakness in the Euro continued this morning when European Central Bank o…

Pound soars back to nearly €1.40 after Conservative Majority

As I said in my last post just over a week ago, the blog was going to be quiet while I took a short holiday. Much has happened since I’ve been away! As most readers will already know, the Pound has surged higher against the Euro as Sterling posted its largest gains against the Euro in years. As exit polls showed that the Conservatives would take an overall majority, GBP/EUR rose 4 cents, and touched the €1.40 level several times as the chart below shows: 

Why did the Pound gain so much on a conservative win? 
The Pound had fallen sharply before the election, due to political uncertainty for investors who had expected a hung parliament. Most polls had again and again shown the two main parties neck and neck, with neither expected to secure a parliamentary majority. The overall majority for the conservatives while not popular with everyone, is certainly very good news for the UK economy. As such, investors rallied to buy the Pound, helping to push it up against other currencies. 

Will th…

Volatile weeks ahead for foreign exchange rates

Wednesday 6th May 2015
After a tumultuous end to last week for the Sterling/Euro pair, yesterday we saw rates remain within a 1 cent range between 1.3550 and 1.3650. This still represents a large cost difference when buying a large amount of currency, however relative to the huge drop we saw last week, it actually seems quite stable! Regular readers of my blog and those keeping an eye on the currency markets in general will know that the coming few days will be incredibly important for exchange rates. 

In addition to the usual economic data releases that may cause rates to change we have, of course, the UK parliamentary election on Thursday. It is a significant event to determine the appropriate stance of monetary policy and assesses the risks to long term goals of price stability and sustainable economic growth in the UK, and as such, it’s highly likely to affect the Pound. 

In the last week alone, a purchase of €250,000.00 has differed in cost by more than £6,500.00. Similar cost diffe…

Pound/Euro in free-fall, drops into the €1.35's

Friday 1st May 2015 
Well, we've all been saying the Pound/Euro rate was at risk of a serious fall, and that's exactly what we're now seeing. GBP/EUR has absolutely tumbled in the last few days. On Wednesday morning the rate was sitting at a near 8 year high of €1.40, however when I walked onto the trading floor this morning, I was shocked to see the market sitting in the €1.35’s. That’s a drop of more than 3% in just a few days as you can see from the chart below that shows the GBP/EUR rate over the last 2 days: 

Will the Pound keep falling against the Euro? 
The only reason rates were holding at €1.40 was the concern that Greece would not be able to meet its debt repayments. This had been causing real uncertainty over in Europe, and the Euro was very weak. As I outlined in my last post, actually the Eurozone economy is looking much more robust. Their QE programme is taking effect, and it looks like Greece will play ball with the IMF and its creditors. 

Focus has now shifted …