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Showing posts from May, 2016

Sterling/Euro falls as 'Leave' campaign takes lead

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Things can change very quickly in the currency markets. Just last week the GBP/EUR rate was at a 3 month high of €1.32, supported by opinion polls suggesting that the UK would vote to remain within the EU. However we have now seen the rate drop, as the latest polls published today paint a very different picture. Here's how GBP/EUR has moved today:


As you can see the rate has dropped, and the decline started as soon as the trading started at 8am. The Pound fell as a poll published in the telegraph showed the lead for the 'remain' campaign had narrowed. Month end flows also caused Sterling to drop away slightly. Then at 3.30pm a poll by ICM in the guardian showed that 45% would vote to leave, and 42% vote to stay. This shows how polls can change very quickly, and the Pound will change in value along with it. There are now 3 weeks to go and clearly, the vote could go either way.

This presents a serious risk for anyone needing to convert currency. Whether you're buying or …

Pound steady at €1.31. Should you buy Euros now or wait?

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The Pound has stabilised somewhat and has settled down at around €1.31 vs the Euro. It's been a great week for Sterling, which has risen on the back of various polls and betting odds showing that it's increasingly unlikely that we'll see a 'Brexit'. This means less uncertainty, and with it less volatility and that's why the Pound has gained. Here's how GBP/EUR has moved this week:


Pound now steady at €1.31
As you can see from the graph above, the rate hit 'resistance' at €1.32, but has now found 'support' at €1.31. There are no data releases of note for the UK today. We could see the rate drop away as we did last Friday though, if we see currency investors and speculators bank their profits and sell the Pound now it's risen in value.

This is what happened a week ago and rates fell to about €1.29. €1.31 seems to be a key support level though, so perhaps we will see the gains sustained this time around and it will stay steady!

Should you bu…

Pound/Euro at new 4 month high of €1.32

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Better than expected data from Germany today has done nothing to halt the steady rise in GBP/EUR rates, which hit a fresh high of €1.32 today. This is thehighest it's been since early February. The continued gain is due to further signs that the UK will vote to remain within the EU. Betting odds today indicate that there is now an 82% chance we'll remain part of the EU. This has removed much of the uncertainty in the market that a possible Brexit would cause. As such, the Pound is strengthening as a 'remain' vote gets priced into the market. Here's this weeks GBP/EUR graph showing the rising exchange rate:


As I pointed out early this week though, the demographics mean there's no certainty the result will be remain on polling day If the younger generation, who clearly favour remaining in the EU, don't go and vote, then the older generation, who favour a 'brexit' could well end up swinging the result significantly, as voter turnout is much higher in …

Sterling boosted by another 'Brexit' opinion poll

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Sterling has risen higher today, back above €1.30 against the Euro. Again it's the referendum, and a new poll showing support for the 'Remain' campaign that has lifted the Pound. Here's the GBP/EUR chart for the week so far:


As you can see we're back up to the highs of last week, which are the best GBP/EUR for around 4 months. The latest Poll was from the ORB and published in the telegraph today. This showed that there is now a 13 point lead for the 'Remain' campaign. The Pound had weakened this year due to the uncertainty and risk aversion a Brexit would cause, and now that's looking less likely, Sterling is starting to strengthen again.

One thing that is very interesting is the demographics. I saw on the BBC news last night that amongst 18-24 year olds, 72% are predicted to vote to remain within the EU. When you look at those aged over 65 however, there is a stark difference. 58% of this group are likely to vote leave. So those that have never known a…

What could move exchange rates this week?

The Pound has slipped away today as the trading week started, falling further from last weeks 4 month highs against the Euro. The pair is currently settled in the low €1.29's. It seems that investors are being a little more cautious, still wary that the UK could vote to leave the EU next month.

Last weeks gains were on the back of poll suggesting a slight lead for the 'remain' camp, coupled with higher than expected retail sales. However as I alluded to in Friday's post, opinion polls are sometimes unreliable. There also seems to a big divide in terms of the various age groups, and I think that the outcome will be down to voter turnout. It's all very well that the majority of those polled indicate they would vote to remain, but counts for nothing if these people don't vote. Many of those supporting the remain camp are also those that may not be likely to actually vote.

It's also worth noting that away from the sometimes biased press reports, the general fe…

Sterling/Euro drops away from 4 month high

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The Pound has fallen back away from yesterday's 4 month highs. It's often the case that when we see a large gain for a particular rate of exchange, in this case GBP/EUR, the gains are short lived as investors take profits and as these positions are adjusted, the Pound has weakened as you can see from the chart below:


Clients that had got in touch with me and were able to move quickly, were able to obtain trading levels of €1.30+ however the opportunity to do so was very limited, as rates did not stay that high for long.

If you need to obtain the best possible rate of exchange, then your first step should be to send me a free enquiry by clicking here. I can then explain the mechanics of how our service works, and get you set up with a trading facility, so that you can get quotes and take advantage of our services when necessary. I can also monitor the markets and let you know when we are trading at a particular level, so if there is a particular rate you are targeting, you won&…

GBP/EUR highest in 4 months: €1.30+

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Sterling's run has continued today, which is remarkable when you consider most of the move upwards is based on one opinion poll showing we're likely to remain within the EU, as I outlined in yesterday's post.

This morning we also had significantly better than expected UK Retail Sales. Monthly sales were up 1.3%, and compared to last year, up 4.3%. The markets were expecting 0.5% and 2.5% increases respectively, so the much higher numbers confirm the UK economy is stronger than originally thought.  The rush to complete property deals before the stamp duty rise came into effect probably boosted demand for household goods and furniture.

Anyway, back to the exchange rate. Look at this week's GBP/EUR chart:


It's risen by nearly 3% so far this week, and most of it is on the back of one opinion poll in the evening standard, showing that 55% of people are expected to vote to remain.

Will this rally continue? 
Sadly it's impossible to predict. Personally I think that t…

GBP/EUR hits €1.2940 as polls support 'Remain' vote

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The Pound has risen again today (Wednesday) after the Evening Standard announced earlier that a poll they commissioned by Ipsos-Mori showed that 55% of those asked now support the UK remaining in the EU. 37% indicated they want to leave, with the remaining undecided. Look at the chart below, and see the effect this has had on the Pound:


I've said for some time now that polls and sentiment towards the EU referendum would be the main driver for exchange rates until the vote is held, and this is illustrated by the fact that recent economic data has been quite poor.

Yesterday's UK inflation number was 0.3% against an expected 0.5%. This means there is very little chance interest rates in the UK will rise any time soon, and this  would usually have weakened Sterling and pulled exchange rates lower, but with several polls now suggesting a 'Brexit' is looking less likely, the Pound is recovering some of it's recent losses. This is because leaving the EU would create lots …

Sterling/Euro rises to €1.28 as vote to 'remain' looks more likely

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After trading in a flat range of €1.26 to €1.27 all month, last night we saw Sterling strengthen after betting odds from BetFair indicated a 73% probability of the UK voting to remain within the EU. We've also had a new poll indicating that the swing is moving towards the 'remain' campaign. As previously discussed on this blog, anything that supports the 'remain' campaign is positive for the Pound, and I've said several times that polls are very likely to affect the value of the Pound. This new information has done just that, as you can clearly see this in the chart below:

This is a great opportunity for those that need to buy Euros, as it's the best it's been in a few weeks. The 'leave' campaign is starting to gain momentum, and the Pound is likely to continue to be driven by polls regarding the referendum.

If you need to buy Euros and are worried about all the volatility we're seeing at the moment, one option you can consider is hedging y…

GBP/EUR, GBP/USD and the week's economic data releases

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Good morning and welcome to a new week. In today's post, I'll give a quick overview of where GBP/EUR and GBP/USD exchange rates stand, and list this week's data releases that could affect exchange rates.

Sterling/Euro
Pound to Euro exchange rates continue to trading within a range of €1.26 to €1.27. It's relatively quiet week for data releases (see below) so I expect the referendum and sentiment to continue to drive this pair. Over the weekend Prime Minister Cameron and IMF head Christine Legard continued to warn over the risk of a 'Brexit'. However 306 Business Leaders signed a letter backing a 'Brexit' which was published in the Daily Telegraph. This could lend support to the 'leave' campaign and weaken the Pound a little. At the moment the polls are almost 50/50 so anything that swings sentiment one way or the other could affect Sterling accordingly.

If you would like a GBP/EUR exchange rate quote, click here.

Sterling/Dollar

Better than expe…

Sterling gains after Bank of England’s (BoE) ‘Super Thursday’

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Friday 13th May 2016
Since the beginning of May, the GBP/EUR currency pair has been stuck in a range between 1.26 and 1.27, as you can see from the chart below. Yesterday however, comments from the BoE governor Mark Carney pushed the Pound higher, breaking just above this range, albeit briefly and not by very much.


Bank of England’s ‘Super Thursday’ 
Yesterday the BoE released a triple whammy of data, in the shape of a decision on interest rates, Quantitative Easing (QE) and the Quarterly Inflation report. There was also a press conference in which Governor Mark Carney made comments about the EU referendum.

There were no surprises with either QE or interest rates, with all members voting to keep everything ‘as is’. The inflation report predicted that economic growth would slow in the second quarter of the year, but pick up in the second half. It also cut the growth outlook for the next three years.

The comments Carney made in the press conference were interesting however, and this was …

How could Bank of England's Super Thursday affect exchange rates?

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Thursday 12th May 2016
Sterling has weakened off a little, after the UK posted weaker than expected UK Industrial Production yesterday. Production actually rose slightly in February and March, however it fell 0.4% in the first three months of this year. It also fell in the last 3 months of 2016. This means the industry is in recession for the 3rd time in the last 8 years, and Sterling has suffered a little as a result.

Manufacturing, construction and industrial production seem to be pulling the economy down as a whole at the moment, pulling total growth lower in the last 6 months, reflecting the overall slowdown in global economic growth.


The chart above shows the slip in the rate through the trading session yesterday. If you look closely however, despite the clear drop, GBP/EUR has been relatively range-bound this week and the pair remained within the 1.26 to 1.27 range.

Bank of England Super Thursday
Today is what economists have dubbed 'Super Thursday' and is the day when t…

Will Sterling/Euro go up or down this week?

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Monday 9th May 2016
As you can see from the chart below, after the recent fall in GBP/EUR rates, currently the currency pair seems to be range-bound between 1.26 and 1.27. Currently the rate is stable around the mid-way between these points:


It's now only 6 weeks until the referendum on Britain's EU membership, and as the race hots up and more opinion polls are conducted, it's likely to continue to affect the value of the Pound. In addition to the ongoing 'Brexit' debate, there are the usual scheduled data releases. Below I've listed the main releases for the coming week.

Of most importance will be the latest UK Industrial and Manufacturing figures, along with the Bank of England's 'Super Thursday' release of it's inflation report and view on interest rates. See below for a detailed breakdown of what I think will move rates this week.

If you need to convert currency and are keen on getting the best exchange rates, I'm happy to provide any …

Why has the Sterling/Euro exchange rate fallen?

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Sterling's decline has continued today, falling briefly into the €1.25's before settling around the €1.26 level. I thought it was unlikely the rise to €1.29 would be sustained and that's proved to be the case.


Why has the Pound fallen?
There are several reasons for the fall in the value of the Pound. This week we've seen a new 'Brexit' opinion poll by ICM, which has shown a slight swing towards the leave campaign. It was close though, with the result showing 45% voting leave, 44% voting remain, and the remaining currently undecided. This demonstrates how quickly things can change, and as the vote seems to tight it's going to continue to affect currency prices.

We've also seen some negative UK data this week. Yesterday UK manufacturing figures showed a contraction for the first time in 3 years, showing growing unease in this sector. This morning, UK construction figures were also worse than expected, which started today's slide for the Pound against …

Sterling/Euro exchange rate forecast

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April was an interesting month for Sterling/Euro exchange rates. In the first part of the month, the recent decline in Sterling/Euro rates continued, and we hit lows in the €1.23’s not seen since 2014. As you can see from the chart below however, things changed mid-month as we saw rates recover back to €1.29. Things now seem to have peaked however, and the rate has started to slip back away. In today’s post, we’ll look back at what has caused the rate to fluctuate so much, and take a look at what could move exchange rates this week.


A retrospective… 
The chart above clearly shows the changing fortunes for Sterling. The first part of the month was dominated by fears over a ‘Brexit’ which weakened the Pound, and global risk aversion which weakened riskier currencies, and caused ‘safe haven’ currencies like USD, JPY, EUR, CHF to strengthen. Mid-way through the month however, risk appetite returned to the market due to optimism surrounding China, one of the world’s largest economies. Sig…