Showing posts from February, 2016

Do you need to exchange currency in the next 6 months?

Sterling has stabilised a little today at around the €1.2650 mark vs the Euro, after 3 days of continual falls (click here to see the latest live currency graphs). UK GDP figures came in this morning at 0.5% which was as expected. This has supported the Pound a little, however I don't think the rate will stay at this level for long. Yesterday, the UK's largest bank HSBC joined other major banks in warning that the Pound could collapse by 15% to 20% should the UK vote to leave the EU. Goldman Sachs voiced similar warnings last week. Despite the fact that these warnings may of course be self-serving, they should be heeded by anyone that needs to convert currency in the next 6 months.

The next few months are going to be very uncertain and we're likely to see extreme volatility in exchange rates. Many of my existing personal and business clients have been in touch over the last few days and are making plans now, for all their currency requirements for this year. Business's…

Pound falls further on Referendum worries and interest rates

Sterling has continued to fall against the Euro and Dollar this week, falling to €1.2650 and $1.3920 respectively. The fact that Boris Johnson has announced his support for Britain exiting the Euro has lent weight to the 'leave' campaign, and as I've outlined in previous posts anything that lends support to the UK exiting the EU will be negative for the Pound. Here's how GBP/EUR and GBP/USD exchange rates have fared this week:



As you can see, the Pound has been in sharp decline, particularly against the US Dollar, that has now fallen 5 cents so far in the last 2 days.  Part of this is due to the uncertainty over the EU referendum, but there are other factors pulling Sterling lower too.

The Bank of England (BoE) governor has also helped to weaken Sterling, stating yesterday that UK interest rates could be dropped to zero, and they may also pursue additional stimulus measures should the economy deteriorate. The rumour of lower interest rates me…

How will the EU referendum affect exchange rates?

The EU referendum has now been announced, and this is likely to have a huge impact on Sterling exchange rates between now and June. In today's post, I'll outline how it could affect the Pound, ways you can fix a rate now even if you don't have all your funds available, and also run over the scheduled data releases that could affect exchange rates this week.

UK Referendum announced
As I'm sure you all know by now, the UK referendum on EU membership has been announced for the 23rd of June. This is going to present serious uncertainties that will be reflected in Sterling exchange rates over the next few months.

Already this morning, the Pound has suffered it's biggest drop in more than a year, over fears and uncertainty over which way the vote will go.

It's this uncertainty that I think will send the Pound lower in the coming months. It doesn't matter whether you or I think staying in the EU is a good thing or a bad thing, all that matters is investor sentiment…

UK employment data sends the Pound higher

Sterling/Euro rates seem to be yo-yoing at the moment. Today we have seen the rate climb back towards €1.29. The reason for this mornings spike was the latest UK employment data.

Unemployment is now around 5%, the lowest it's been since 2008. Average earnings increased by 1.9% and the numbers claiming unemployment benefit dropped by 15,000. All in all this reflects a pretty robust UK economy that is significantly outperforming those in Europe. As such the Pound has risen against other currencies.

I don't expect the rise to continue however, and I think we will see the pair continue to fall lower in the coming days. We have the ongoing EU referendum uncertainty that is likely to hinder any significant recovery for Sterling.

When looking at a currency pair such as Sterling/Euro, it's important to look at both the UK economy and also the EU, because another reason the GBP/EUR rate may fall is the fact  the Euro may gain strength in the coming weeks and become more expensive to…

Pound continues to fall against Euro and USD

Despite a slight recovery in GBP/EUR rates this week, the downward trend has continued today. Inflationary concerns are weighing on the Pound, and this morning figures showed that inflation was lower than had been expected. This has weakened the Pound as it means an interest rate hike is now firmly off the cards for the foreseeable future.

Also pushing the Pound lower are the ongoing negotiations in Brussels, where David Cameron is currently trying to garner support for his EU reforms. You can read about these events in more detail elsewhere such as the BBC website. For the currency markets, what it means is continued uncertainty. Talks are very fragile to say the least, and currently it still looks 50/50 as to whether the UK will vote to remain in the EU.

Markets hate uncertainty, and this is reflected in today's fall for Sterling as you can see from the GBP/EUR chart below, showing the drop from €1.30 to €1.2835. I think the rate could continue falling for the rest of the week. 

GBP/EUR climbs to €1.30 / What could affect rates this week

The Pound has recovered slightly against the Euro in the last few days, and this afternoon we've seen the rate rise to around the €1.30 level, after the single currency weakened following comments from the European Central Bank (ECB) president:

In today's post, I'll list the main data releases that could affect Sterling exchange rates this week. If you need to convert currency and would like a quote, or would like to discuss which way exchange rates are moving, click here to send me a free enquiry. I have never had issues beating rates on offer by other brokers, so enquiry today to see if you could save money.

This week's economic data releases that could affect exchange rates
Monday 15th February - It's presidents day in the USA and so markets are quite quiet. This morning we saw the latest Trade Balance figures for December from the EU, and they were slightly worse than expected, weakening the Euro and helping GBP/EUR rise close to €1.30. The Euro weakened further…

Sterling exchange rates remain volatile

The Pound fell to a new 15 month low against other currencies today, and GBP/EUR in particular has been very volatile, swinging between highs of €1.29 and lows of €1.2660 as you can see from the chart below:

Global growth is slowing and this is driving investors towards safe haven currencies like the Euro, and as a result the Pound continues to lose ground. There is also talk of the Bank of England possibly having to cut interest rates, and this is also weakening Sterling.  The latest prediction for rates starting to go up in the UK is now 2020. The rate has been at 0.5% since 2009, but if a cut is indeed on the cards, then expect the Pound to continue falling.

The other issue at the moment is bank stocks falling in the UK and also in Europe. Britain has a huge financial services and banking sector, and any downside risks to this sector pulls the Pound lower.

The 'Brexit' issue is also still centre stage. The Pound has fallen more than 10% so far this year against the Euro, an…

Pound plummets on 'Brexit' fears

Things seem to be going from bad to worse for the Pound I'm afraid, with Sterling having a very poor start to the week. GBP/EUR rates dropped into the €1.28's during trading yesterday. Today we saw a slight recovery to €1.29, however throughout the day the downward trend has continued.

At the time of writing, GBP/EUR is 1.2740 and it's all to do with the UK EU referendum, or 'Brexit'. Here is how GBP/EUR rates have fared in the last 24 hours:

Sterling/Euro rates at a 13 month low
It was only a few months ago that we were enjoying  GBPEUR rates above €1.40, which were around the best in over 8 years. Today however, the currency pair sits at a 13 month low, and there is a real risk the downward trend will continue. Last week, the rates dropped below the €1.30 level after the Bank of England signalled an interest rate rise is off the cards for 1 to 2 years.

This week, focus has turned to the risk of the UK voting to leave the EU. It seems like the Pound is starting to…

Sterling falls after BoE Super Thursday

As predicted in my post earlier in the week, the Pound has fallen sharply today after the Bank of England's 'Super Thursday':

Why did the Pound fall?
In it's quarterly inflation report, the Bank of England (BoE) cut their growth forecasts, and downgraded economic expectations. Also, all 9 members are now unanimous in their voting to keep rates on hold, with all 9 members deciding to keep the rate at the record low of 0.5%.  Wage growth is easing,and they've now made it pretty clear that inflation is going to remain low for 2 more years, and interest rates will therefore likely remain at their record low for a long time to come.

With a slack economy and the BoE being very dovish today, Sterling has not fared well as the graph above shows.

Will the Pound rise or fall in the coming months?
I think there are serious downside risks for Sterling at the moment. There's nothing I can see that will push the Pound higher, and the EU referendum will soon come into focus. …

Making Regular International Overseas Payments

The market is pretty flat today, with GBP/EUR at €1.32 and GBP/USD at $1.44. There's little market data today and therefore exchange rates are likely to remain flat.

I thought I would touch on another area of the market I can help with: Making Regular Overseas Payments...

Many of my clients initially use my services for making a large transfer for purchasing property overseas. Once purchased however, clients will often need to top up their overseas Euros accounts for things like paying bills, living expenses, holidays, servicing a mortgage or paying for ongoing renovations of their new property. We don't only assist with larger foreign exchange requirements; we can assist in smaller transfers too, and the 2 options are as follows:

Regular Monthly Payments
Simply doing this through the bank can prove very costly. We all know that the rates of exchange the banks usually offer are low, however the transfer charges are also very high, and the actual transfer can take a long time.


Exchange rates in February 2016

Welcome back to my regular readers, as it's been a week since my last update while I was overseas. While I was away, GBP/EUR exchange rates were relatively stable, after a very volatile start to the year. The pair traded within 1 cent of €1.3150 all week, and today has also remained relatively range-bound, however has climbed this afternoon to around €1.32:

The pair now seems to have settled in the low €1.30's, however with a plethora of data from both the UK and Eurozone this week, I think we could see volatility return to the markets this week.

Thursday will be of particular importance as we have 'Super Thursday' in the United Kingdom. 

What is Super Thursday? 
It's the day when the markets have a huge amount of data to digest for the UK economy. At 12pm the Bank of England announce its latest interest rate decision, and release the minutes to what was discussed and how they voted. We also have the latest BoE UK Inflation report. 45 minutes after all of this, the…