Showing posts from July, 2015

GBP/EUR falls 4 cents in a week. GBP/USD also set to drop

Tuesday 28th July 2015
Sterling has fallen sharply against the Euro of late, and in the last week had slipped from €1.44 down to €1.40. As you can see from the chart below, the rate has recovered slightly this morning, getting back above €1.41: 

The main reason for the gradual slide in Sterling is partly due to renewed optimism surround Greece, but also the global economic picture. If you look at the global economy, you will see that the Chinese market is in turmoil, and there has also been a sharp drop in Commodity prices. This is giving investors serious doubts over the strength of economic growth worldwide, and in turn this casts some doubt over whether the Bank of England will actually raise interest rates at the turn of the year. 

The global picture means that the Bank of England may well have to tighten their monetary policy, and this has pulled Sterling lower against other currencies. 

This morning however, strong UK Growth figures have shown that the economy has grown by 0.7% in t…

Why has the Pound/Euro rate fallen?

Thursday 23rd July 2015
Sterling/Euro rates have been threatening to fall for a week now, and today the market took a plunge pushing GBP/EUR rates down into the €1.41’s. After a quick look at the chart, I’ll go into more detail regarding what caused the rate to fall, and whether the Pound will go back up against the Euro. 

Why has the Pound fallen against the Euro?

The first reason was Greece, which is becoming a regular and tiresome topic in the currency world! However it looks like things are getting closed to being resolved. They have taken a crucial step towards a bailout after its parliament passed a second set of reforms today, and this has given confidence back to the Euro. This is why the market initially started dropping this morning. There had been fears of a rebellion by Greek MPs, but the Greek Prime Minister Alexis Tsipras got the required support. This means that negotiations can begin on approving the terms of a third bailout. It looks like a final deal will be sorted out …

Sterling gains on BoE MPC minutes

Wednesday 22nd July 2015 
Yesterday was not a good one for Sterling/Euro rates, with levels sliding all day from €1.44 to €1.42. The reason for the drop was renewed confidence about Greece, and in particular credit rating agencies increasing Greece’s rating as they felt there is now much less chance of them leaving the Eurozone. 

This morning, Sterling has fought back slightly after the release of the Bank of England (BoE) minutes from this morning’s Monetary Policy Committee (MPC) meeting. The full minutes can be read here.

The key phrase I noticed was “the decision between holding Bank Rate at its current level versus a small increase was becoming more finely balanced”. This means that despite all 9 members voting to keep the interest rate at the record low of 0.5%, it shows that they are going to start leaning towards finally raising rates towards the end of this year. The next meeting is in 6 weeks’ time, and we may start to see some of the members voting for a hike in rates. 

This h…

GBP/EUR, GBP/USD, GBP/AUD currency forecast

Tuesday 21st July 2015 
In today’s post I’ll take a look at what’s been happening with Sterling/Euro, Sterling/Australian Dollar & Sterling/US Dollar, including where rates may head in the coming months. (If you would like to discuss your currency requirement and obtain a quote on the best exchange rate I can provide, get in touch by clicking here.)


GBP/EUR rates started the week at new highs of €1.44. This was due to comments from the Bank of England, hinting that interest rates may finally start to rise at the end of the year. This strengthened Sterling pushing it higher against other currencies. 

Today however we’ve seen the rate drop back steadily throughout the day by 1% at the time of writing, as you can see from the chart above. Renewed optimism due to Greece starting to repay it's debts, and the fact they may soon secure a proper bailout, is starting to strengthen the Euro and make it more expensive to buy. Tomorrow, we have the Bank of England (BoE) meeting…

€1.43 - Will Sterling go higher against Euro?

Thursday 16th July 2015 
The Euro remains incredibly weak today, with GBP/EUR rates settled around the €1.43 mark, a fresh 8 year high. In today’s post I’ll look at the developments over the last few days, what happens next with Greece, why the Euro remains weak, and what might happen to exchange rates in the coming weeks. First, let’s look at how exchange rates have moved so far this week:

GBP/EUR hits €1.42 as Greek rescue falls apart

Wednesday 15th July 2015
In a new twist to the ongoing Greek saga, last night the IMF released a statement saying that they don’t think the proposed bailout goes far enough.

Effectively, this is a warning that the IMF will not take part in any rescue package for Greece unless the other EU creditors agree to much more debt relief than planned. This is a huge complication, and the amazing fact is everyone involved in the negotiations knew the IMF's position, but just ignored it.

Ignoring things doesn't make them go away, and the stunning developments means that the Euro has weakened even further, as nobody knows if this on-going issue is actually ever going to be resolved or not. 

The effect on the currency markets is a Euro that’s getting even weaker. The GBP/EUR reached €1.4240 this morning, before some poor UK employment numbers pulled it back down to the €1.42 mark as the graph below shows: 

What does all this mean for the Euro? 

It means that even if the Greeks agree to the pla…

Pound rises on interest rate comments from BoE

Tuesday 14th July 2015
We have seen a sharp spike for Sterling this morning, after the Bank of England governor Mark Carney has said that the time for a UK interest rate rise is getting closer. This is despite figures this morning showing that inflation sits at 0%. This really shows how simple things like a few words from a central bank governor can affect exchange rates. Here's a look at how the Pound rose by over a cent against the Euro as soon as he made the comment at 09:53am:

Why did his comments cause the Pound to rise?

It's due to the fact that he has hinted interest rates may go up in the UK this year. Higher interest rates make Sterling a more attractive investment for investors due to the higher return on offer, and so the Pound has strengthened, pushing exchange rates up against other currencies. 

In recent times it's been things like Greece and elections that has affected the rate, but years ago things like interest rate movements and economic data were the main th…

Greek Bailout – why has Pound/Euro risen?

Monday 13th July 2015
It was quite an eventful weekend for Greece and the Eurozone, with late night negotiations resulting in an announcement this morning that a deal has been made. If that’s the case, then why hasn’t the Euro strengthened? 

As you can see from the chart below, when markets opened this morning and reacted to the news, rates actually rose from €1.39 to €1.4050. As is often the case in the currency markets, the devil is in the detail, and in a moment I’ll explain why all is not as it seems and look at why Pound/Euro rates are still high. 

Greece makes deal, but Euro remains weak for now

The facts are as follows: Athens has been offered a third bailout, and this means the country will avoid bankruptcy. Greece will stay inside the euro and there will not be a 'Grexit'. However, it’s not quite yet a done deal. 

A proposal is on the table, however Greek Prime Minister Alexis Tsipras now has to rush through key measures on pension reforms, tax increases and a debt repaym…

Pound/Euro rates slide as it looks like a Greek deal is imminent

Friday 10th July 2015
It looks like we’re edging closer to a deal over Greece, and the GBP/EUR has been edging lower ahead of a possible deal this weekend. (Take a look at my live currency charts, a snazzy new feature I've recently added to my blog that regular readers may have noticed!)

Let's take stock of where everything stands...

Yesterday the Greeks delivered their proposals to European creditors as promised. Today they are rallying support ahead of a vote by the Greek parliament at 10pm tonight. If they vote it through, which looks likely at the moment, then on Saturday EU finance ministers will have to all vote to agree to the proposals. On Monday morning, the parliaments of the EU will vote on whether to agree the deal. If all of this happens, then Greece will be given the €3.3bn they need to pay their outstanding debts.

What affect could this have on the Pound/Euro exchange rate? 

It’s very hard to say and the currency markets are impossible to second guess, but logic wou…

Could pound/Euro rates be about to fall?

Thursday 9th July 2015

Deadline day for Greece

By midnight tonight, Greece has to submit its plans and new proposals to its creditors to try and secure a bailout and prevent a possible exit from the Eurozone. What they submit will then be looked at by EU Finance ministers at the weekend, and a decision is likely to be taken on whether to accept them at an EU Summit on Sunday. 

Greece needs to make a deal. At the moment the banks there are still closed, and a €60.00 limit on ATM withdrawals. At this rate, it’s likely the banks will run out of money by Monday, so it really is crunch time for the Greeks. 

With the referendum out of the way, I think it’s quite likely that Greece will now soften its demands. They really have taken the negotiations as far as then can, and they know it’s in their interests to now make a deal to restructure its debt. EU leaders are almost out of patience, Greece knows this, and so a deal could be struck this weekend. 

What could this mean for Sterling/Euro exchan…

Why has Pound/Euro dropped to €1.39?

Wednesday 8th July 2015 
In today’s report I’ll look at the latest developments in Greece, the effect of today’s Budget statement on Sterling, and also why the Pound/Euro rate has dropped to €1.39. 

Pound/Euro drops to €1.39 
Since the start of the week, we’ve seen GBP/EUR exchange rates drop from €1.42 to €1.39 today. There are several factors affecting the Sterling/Euro cross at the moment, and after a quick look at the chart I’ll address each one in turn. 

What has caused Pound/Euro rates to fall? 
Sterling had been performing very well recently, rising on the back of some better economic numbers in recent months and the returning of a majority Conservative administration in May's general elections. The Pound had strengthened as a result, however now seems to be on the back foot. Here is my take on why Sterling has weakened off today. 

Greek deal - The Greek situation seems to be coming to a head, with Greece set to submit fresh proposals on Thursday, EU ministers meeting on Saturd…

GBP/USD & GBP/AUD Currency Forecast

Tuesday 7th July 2015 
In recent posts I’ve been focusing on Sterling/Euro exchange rates and the Greek crisis that is the reason for the current buying levels for the Euro being around the best in 8 years. Nothing has really changed for GBP/EUR and while a deal is yet to be made, the rate remains supported around the €1.41 level. 

For something a little different, in today’s report I’m going to take a look at Sterling/US Dollar, Sterling/Australian Dollar, and also some of the other commodity based currencies, including the forecast for where analysts think rates could go. Many readers are unaware that this site not only provides a market commentary on Euros, but also most major international currency pairs. (If there is a particular currency pair that you would like to chat about, then get in touch for a free consultation.)

In addition to the market reports I provide for free, I can also provide you a quote on your currency exchange. I can access commercial rates of exchange for over …

Greece votes ‘No’ but markets remain calm

Monday 6th July 2015
This weekend the Greek people voted against the terms of their latest bailout proposal. 61% voted against it, and 39% voted to accept it. The reaction on the currency markets has been surprisingly muted. Greece's finance minister, who often clashed with creditors, has resigned. Varoufakis was seen as a major obstacle in negotiations and now that he has stepped down the possibility of a last minute deal to keep Athens in the Eurozone may have increased, and this could be a reason that the Euro hasn’t weakened more. 

What does all this mean for Pound/Euro exchange rates? 
Over the weekend we saw some weakness in the Euro on the Asian markets, with GBP/EUR rising to nearly 1.42. However as soon as European markets opened this morning, prices had corrected to €1.4050, so little change from where we were last week. 

Actually nothing has really changes. Greece will now go back to the negotiating table to try to strike a deal to re-structure Greek debt. Something needs t…

How could Euro react to the Greek referendum?

Friday 3rd July 2015
Regular readers of my blog will be well aware that most moves in Sterling/Euro of late have been due to the ongoing problems in Greece. The failure to meet their debt payments and the ongoing negotiations have weakened the Euro significantly in the last few months, resulting in a cheap single currency. In fact the current GBP/EUR is very close to the best it’s been in 8 years. Below is a chart showing the exchange rate over the last 3 months. As you can see, it's risen to €1.40 several times before dropping back away again:

What’s happening this weekend? 
The Greek people are voting on a referendum called by the Greek government, on whether they support the bailout offer, in terms of further international loans. This follows months of tough talks with creditors. 

Currently all support to Greece has been stopped, and the banks are likely to run out of cash on Monday. You can read more about this here on the BBC website.  EU leaders have warned that a "No&qu…