Monday, 9 November 2015

What could affect exchange rates this week?

The last month has been incredibly volatile for Sterling/Euro exchange rates, with lows of €1.3350 and highs of €1.42. In real terms, this means a typical Euro purchase of €300k has differed in cost by over £13,000.00 which really illustrates how quickly things can change in the currency markets:


If you are buying or selling a property abroad and have a large volume of funds to convert, timing is everything. Simply hoping the rate will be favourable can be very costly and there are various ways you can protect yourself against rates moving against you. If for example you are purchasing overseas and have some time before you need to complete, then exchange rate movements could end up significantly increasing the total cost of your purchase. In this example, you could use a 'Forward Contract' to lock in the current rate of exchange for up to 2 years. This gives you a set cost in Sterling, protects you against the rate dropping, and allows you to budget effectively.

To discuss this type of contract, or just have a chat about the currency markets and get a quote on your exchange to compare with your bank or existing broker, click here to send me a free enquiry. I usually have no problem beating rates provided by other brokers so it's certainly worth seeing what I can do for you.

This week's market data that could affect exchange rates:

Monday 9th November 2015 - It's been relatively quiet in terms of data releases today, but the Pound/Euro rate currently sits just above €1.40 due to weakness in the Euro, the reasons for which I outlined in my post on Friday.

Tuesday 10th November 2015 - Today is quite important as we have the UK Inflation Report from the Treasury Committee, and this could affect future monetary policy in the UK and could therefore affect Sterling. We also have a Financial Stability report from New Zealand that might change GBP/NZD rates.

Wednesday 11th November 2015 - Another important day for the Pound with a raft of Unemployment data for the UK. If the numbers are worse than expected the Pound/Euro rates could drop away. There is also a speech today by the Bank of England Governor Mark Carney, and his comments will be closely watched for any hints as to when interest rates may rise. If he's quite dovish then expect the Pound to drop. We also have a speech by the European Central Bank president, and again any comments about further monetary stimulus could affect Pound/Euro rates.

Thursday 12th November 2015 - Sterling/Euro rates could be affected today by UK House Price data at 09:30am, and EU Industrial Production figures at 10am. Elsewhere there are jobless figures for both Australia and the United States.

Friday 14th November 2015 - The EU today releases it's GDP figures which is a very important release for the Eurozone. If the figure is better than expected, the Euro could gain strength and pull GBP/EUR rates lower. The USA has Retail Sales at 13:30pm, which are a good barometer of overall economic activity and so could affect Pound/Dollar rates.

To discuss your currency requirement and get a quote on your exchange, click here to send me a free no obligation enquiry today.