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 and minutes on their discussions on rates. If these show that 2 or more of the BoE’s Monetary Policy Committee (MPC) vote for a hike (or even discussed the possibility of it) the Pound may gain further.
GBP/AUD rates are very high at the moment, as you can see from the chart below:
Current levels are at 2.11 which are around the best they’ve been in 8 years. The reason is that China, Australia’s largest trading partner is slowing down, and there is less demand for commodities. Commodity prices are very low at the moment, weakening currencies such as the CAD, NZD, ZAR as I touched on in a recent post.
Late tonight, the Aussies release inflation data, and there is a speech by their central bank governor. If he hints that interest rates will be cut again, then we could see GBP/AUD go even higher.
GBP/USD rates have been dropping of late. This is mainly due to the fact US interest rates are expected to rise in a few months’ time, the first major western economy likely to start pushing rates up. The higher return potential means USD is in demand and getting stronger.
I expect the US Dollar to continue gaining strength in the coming months, and wouldn’t be surprised to see GBP/USD rates back at $1.50 or even below this by the latter part of 2015.
Getting the best exchange rates
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Labels: Best Exchange Rates, Currency, GBP/AUD Forecast, GBP/EUR Forecast, GBP/USD Forecast, Will Pound go up or down