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Showing posts from March, 2016

Will exchange rates go up or down in the next few months?

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Since my last post, GBP/EUR rates have remained largely range-bound within a 1 cent range of around €1.2650 to €1.2750. Last week was expected to be a quiet one, but it was anything but with the attacks in Brussels causing investors to seek safe investments, causing Sterling to drop across the board.

In fact the Pound has now fallen to a 2 year low against a basket of currencies on a trade weighted basis.

Will the exchange rate go up or down in the next few months?
Unfortunately it is impossible to predict currency movements, however with a sound knowledge of what can make the rate go up or down, you can make an informed choice on when to lock in to a rate of exchange. I can also provide you a quote that will be up to 5% better than banks or other brokers may offer, so if you need to convert £5k+ on a bank to bank transfer basis, contact me today for a free quote.

In terms of what could move the exchange rate in the coming weeks, there are 2 factors to consider. Firstly, economic data r…

GBP/EUR and GBP/USD drop following Brussel's terrorist attacks

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Pound/Euro and Pound/Dollar rates are both lower today, following the terrorist attacks in Brussels this morning. There are 4 things that move exchange rates: Economic Data, Political Events, Natural Disasters and Acts of War and Terrorism. Usually it's economic and political data that I focus on here, because those are the only 2 that can be forecast in advance.

This morning's events have had the effect of causing investors to seek safer investments, as is often the case in times of uncertainty. The result is a strengthening of both USD and EUR, in addition to the Swiss Franc and Japanese Yen. All of these currencies are seen as 'safe haven' currencies and generally strengthen when investors are uncertain. You can see the effect of the USD and EUR getting more expensive when markets opened this morning and reacted to the news:

    GBP/EUR

    GBP/USD

In the UK this morning, the latest inflation numbers were roughly as expected, but a little higher causing the Pound t…

Pound rises after BoE minutes

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Since my earlier post, the Pound has surged after the Bank of England stated that they won't be following the EU and Japan in cutting interest rates. There was expectation the BoE would have to do this at some point, and now this isn't the case, the Pound has gained significantly as a result:


 I hadn't expected Sterling to gain given the concerns over the referendum and the downward revision of growth forecasts, but the fact rates will not be cut to negative is a positive for Sterling.

This does create much better opportunities for buying Euros, and if you would like a quote for your exchange, click here.

Pound/Euro down, Pound/Dollar up...

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Good morning. It's bright sunny morning in London, and as the day gets going Pound/Euro is slightly lower due to the Budget and a strengthening of the Euro. Pound/Dollar rates however have risen due to news from the US Federal Reserve.

Read on for a more detailed look at why exchange rates have moved.....

Growth forecasts cut in Budget
In my most recent post I outlined the effect the UK Budget may have for Sterling exchange rates, citing any change to growth forecasts as the main risk for the Pound. This proved to be the case, as growth forecasts were indeed cut for the next 5  years, which weighed slightly on the Pound. There were some fairly decent UK Employment numbers yesterday however that limited the drop for Sterling, but overall there was a slight drop for Pound/Euro rates, as the chart below shows:


Bank of England news at 12pm today
At 12pm today the Bank of England releases its interest rate decision, and I would expect rates to remain at 0.5%. We will also see how the 9 …

How could the Budget affect exchange rates?

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Pound/Euro rates have fallen a little further this week, and currently sit at around the €1.2750 mark.  (Click here to see live currency graphs.) There are some important things happening over the next few days that could cause further volatility for Sterling

If you need to exchange currency and would like to get a quote for your transfer, click here to send me a free enquiry. The rates of exchange I provide are up to 5% better than banks and other brokers may offer, and on large transfers this could mean savings of thousands of Pounds.

I've listed the main things I think could affect exchange rates this week below.

UK Budget Report
Tomorrow (Wednesday) the chancellor gives his latest budget. This can often affect the Pound, as he gives economic forecasts for the coming year, along with growth estimates, Spending and borrowing forecasts and fiscal stimulus.

Osborne still needs to balance the books, and due to the global economic slowdown there is a good chance that there are going …

GBP/EUR hits €1.3050 before dropping back to €1.2850

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As I predicted in my last post, the European Central Bank have just announced further stimulus in the form of a cut to the benchmark interest rate to 0%, and have also expanded their Quantitative Easing programme. I said there may be a temporary spike in GBP/EUR rates as a result, and this is how the chart looks at the time of writing:


As you can see there has been a significant weakening of the Euro, pushing the rate above the key €1.30 mark to level at €1.3050. At 13:30pm today the ECB president Mario Draghi will give a press conference, and his comments in this may cause further volatility in the rate.

Personally I don't think these gains will hold. The initial market reaction will probably correct itself pretty quickly and I would not be surprised to see the rate back below the €1.30 mark by the end of the week, if not the end of the day.

What this does present however is an opportunity to buy Euros at the best rates we've seen in over a month. If you need to buy Euros at…

Sterling rises on strong manufacturing numbers

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The Pound has risen today, following the release of some very positive manufacturing numbers which were better than the market was expecting. Manufacturing activity forms a large part of the UK's GDP, so the strong figure showing 0.7% growth has pushed the Pound higher. Here is how GBP/EUR has moved so far this week:


As you can see, it's been a topsy turvy week, with lows of €1.28 and highs of nearly €1.30, which is where we currently sit following this morning's positive data.

Mark Carney comments affect the Pound
Yesterday caused some swings, after the Bank of England's governor Mark Carney spoke about the EU referendum. The BoE are neutral with regards to providing support for either camp, and Carney was trying very hard not to lean one way or the other. He was unable to avoid questions on the issue however, and he stated that the UK leaving the EU is the biggest risk to financial stability. He also said that the relationship with the EU had helped the UK to grow. …

Pound/Dollar exchange rates reach 2 week high

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Pound/Dollar rates have recovered recently, pushing back above the $1.40 level to reach a 2 week high:


The reason for the climb in GBP/USD rates was due to employment data released last week. The jobs data released on Friday showed that significantly more jobs than expected had been created, which would usually be positive and therefore strengthen the Dollar, pulling exchange rates lower. However when you look closer you see that actually wage growth in the USA was very low indeed, which means the FED are unlikely to raise interest rates again any time soon. As such the USD weakened, pushing GBP/USD to a 2 week high, and back above the $1.40  mark.

Moving forwards, I think that the EU referendum will come back into focus, meaning any further gains for this currency pair could be limited.

Best exchange rates for US Dollars
Sterling/Dollar is our second most popular currency pair, after Sterling/Euro. The majority of my clients that buy US Dollars are business's that import their go…

GBPEUR nudges €1.30 before sliding lower again

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There has been a little improvement for the Pound in recent days, touching €1.30 yesterday before trailing back off again today. There was no apparent reason for the gains in the rate, and actually the latest economic figures released for the UK suggest that growth is slowing.



So why did the Pound gain?  
It's more to do with the fact it had lost so much ground last week due to fears of a 'Brexit'. Sterling had been sold off and the Pound had lost lots of ground against other currencies due to the uncertainty the EU vote is creating. Things are a little calmer now, and investors seem to have been buying the Pound again. This is probably because the latest polls suggest a narrow advantage for staying in the EU, and the stability this will create will be Sterling positive.  I don't think this is the start of a recovery for the Pound however, and I expect exchange rates to remain under pressure for the next few months.

Next week could present an opportunity for clients l…

GBP/EUR rates recover as Euro weakens

The last few months have not been kind to Sterling, and last week the Pound was at 7 year lows against most currencies, due to the fears of a 'Brexit' which I've explained in recent posts. We have seen a slight recovery in the last few days, however yet another major bank has warned the Pound could drop to parity against the Euro....

We saw the Pound recover slightly yesterday and there were 2 reasons for this spike upwards. Firstly, due to month end capital flows, investors gave Sterling some breathing space after the sustained selling we've seen in recent weeks. Also, EU inflation came in as negative yesterday, which has weakened the Euro and made it a little cheaper to buy.

Next week I'm expecting that the European Central Bank will announce further monetary stimulus for the Eurozone, and this is even more likely now that yesterday's figures showed that inflation is so low. If they do announce further monetary easing, or hint that they will do so soon, then I…