Showing posts from August, 2016

Sterling continues to perform well

Pound/Euros rates peaked at almost €1.18 last week before dropping back away just before the Bank Holiday break. Sterling has been supported recently due to better than expected UK Data including exports and retail sales, along with decent growth and business investment numbers. It did look like GBP/EUR was on course for it's best weekly performance in 6 weeks, however the rally ended towards the end of last week, with rates slipping back into the €1.16's before the weekend.

UK Markets re-opened this morning, and Sterling has started the week well. As you can see from the chart below rates have risen steadily since lunchtime, again testing the peaks of last week.

Why are GBP/EUR rates going up?
The main reason for the Pound making gains is the fact that the economic data we've seen since the EU referendum, has been surprisingly positive. For the moment at least, the forecasts by the 'Remain' camp warning of a recession, huge drops for the stock market & thousa…

Pound continues to rise against Euro

The Pound continues to make gains, and currently sits at around €1.1750 against the Euro, and $1.3240 against the US Dollar (a 3 week high). It is welcome news for those with Sterling to convert to other currencies, as the latest data suggests that the UK economy is holding up surprisingly well following the EU referendum a few months ago. Here’s how the Pound has performed against the Euro so far this week:

Why is the Pound rising, and is it set to continue? 
In the last week or so, Sterling has been given a decent lift following Inflation figures and retail sales that were much better than expected. Yesterday, figures showed that manufacturing exports hit a 2 year high, which of course is probably due to a weaker Pound making our goods more attractive to overseas buyers. I don’t think we should read too much into the recent figures however, as the current weakness in Sterling is a double edged sword; it benefits exporters but also pushes up costs and prices.

While I think that while…

Good news pushes Sterling higher against Euro

This morning UK Retail Sales figures were released, and they were much better than expected, showing the post Brexit period might not be as bad as analysts had predicted. Markets thought that the figure for July would only show a gain of 0.2%. The actual figure was an impressive 1.4% up, and the annual figure was 5.4% higher. Retail Sales are a very good barometer of the overall health of the economy, and shows that consumers are still pretty confident. The market reacted immediately and GBP/EUR rates shot up by a cent, recovering most of the weeks losses to sit in the mid €1.16's:

In some other positive news, there has been other news that Britain's economy won't go into recession, and global growth seems to be stabilising according to the ratings agency Moody's.

We all know that the Pound plummeted in the immediate aftermath of the EU Referendum, but stock prices have recovered and many economists believe the effect on the economy won't be anywhere near as bad as…

Will Sterling keep dropping against other currencies?

The past week has not been a good one for the Pound, with Sterling/Euro exchange rates falling close to the lowest in around 5 years. The charts below show the GBP/EUR and GBP/USD rates over the last month:

Why has Sterling continued to fall?
As you can see from the graphs, the general trend is a weakening of the Pound. Against the Euro, we're now pretty close to the lowest it's been in 5 years. Against the US Dollar, we're around the lowest it's been in 31 years.

As anyone following the currency markets will know, the EU referendum result has caused a huge amount of uncertainty for the UK economy. In recent weeks the Bank of England have warned of further weakness in the economy, and it's also likely they will have to cut interest rates again before the end of the year. We have also seen figures showing that the housing market is slowing. The Euro has also gained slightly against the Pound due to strong German GDP figures, showing that Europe's l…

Pound continues to drop

The Pound seems to have found new direction this week, and that direction is south. Today we saw a report from the Bank of England that showed a rather mixed picture of the UK economy. It said the economy is likely to slow further, and business revenues would also be lower. There have been some positives recently, mainly Retail sales figures coming in better than expected, and also major retailers like Tesco and John Lewis also saying that there hasn't really been an affect on consumer spending following the referendum.

However, despite this it is likely the UK economy will slow due to the uncertainty, and investors have taken today's news and sold the Pound in droves, pushing GBP/EUR rates lower down to the low to mid €1.16's. (click here to view live interactive graphs for all currencies)

Looking for help with currency exchange?
If you are looking to buy or sell foreign currency and want to achieve the best exchange rates, contact me today. I can source rates that are up…

Sterling/Euro rates fall as BoE warn of further stimulus

Sterling/Euro rates have dropped to around the €1.17 mark this morning, due to comments by one of the Bank of England (BoE) Monetary Policy Committee (MPC) members warning of further stimulus. He was quoted in the Times saying that the bank rate could be cut further towards 0% and also warning that QE stimulus could be stepped up.

While this was expected anyway, the fact one of the MPC members have repeated the warning increase the chances of it happening. If you look at the chart below, you can see the rate dropping away as early editions of the newspaper became a little after midnight last night:

Also this morning we have the UK's latest Industrial and Manufacturing production figures for June. These were a little worse than expected and hasn't helped the Pound either. Later this afternoon at 3pm we'll see the latest Gross Domestic Product (GDP) from the NIESR. This is only an estimate of growth over the last 3 months, and the official number will come out in around 1 m…

What could move exchange rates this week?

It's been a pretty stable start to the week, with not much in the way of economic data releases to move exchange rates. On Friday, we saw much better than expected US jobs numbers, which strengthened the US Dollar and pulled GBP/USD rates lower. This in turn has also meant investors are happy to take a little more risk, buoyed by the strong jobs numbers from the world's largest economy. This in turn has meant stock markets are up a little, but the Pound hasn't managed to recover its losses following the interest rate cut, and remains down at around €1.18 vs the Euro. Against the US Dollar, it's at its lowest in about 3 weeks.

Which direction will the Pound take this week?
Today is pretty quiet, but later this week we have some important data that could start moving Sterling exchange rates, for example the latest industrial data from the UK, and Trade deficit numbers on Tuesday.  Below, I'll list the main economic data releases for the week ahead and how these could…

Pound falls as BoE cut interest rates as expected

As expected, the Bank of England have just cut interest rates to 0.25%, the first change in 7 years. What was not expected, was all 9 members saying they expect rates to be a 0% by the end of the year. They have also surprised the market by announcing £60bn in Quantitative Easing. All 9 members voted for the cut, but only 6 of them wanted QE, with 3 wanting to wait for more economic figures. The QE is more than the markets were expecting.

As I predicted this week, the Pound has weakened as a result, as you can see from today's GBP/EUR chart:

It wasn't a huge drop, about a cent from the high just before the decision. The reason it only fell this far is that the rate decision was expected and already priced in to the rate. However the fact there is another cut on the way and an increase in the QE measures mean the Pound could fall further in the coming months. Governor Carney gives a press conference in half an hour or so (12.45pm) and this could also affect the Pound further i…

Pound set to find new direction this week

Good morning readers, and welcome to a new week and a new month. For several weeks now, the GBP/EUR rate has been stuck at around the €1.19 level. This is despite some dire confidence surveys in the last couple of weeks, however these didn't really have too much of an effect on Sterling exchange rates, because they were expected and already priced into the market for the most part. This week however I think the Pound  is going to start falling, due to an expected move by the Bank of England later this week.

Bank of England to cut interest rates?
This Thursday it's widely expected that the BoE will either cut interest rates, increase their QE stimulus, or both. I think that it's very likely that they will cut interest rates by 0.25%, and this is already factored in to the current rates. However the markets haven't looked much further than this, and I expect further rate cuts later in the year. Some BoE members have been hinting recently at negative interest rates, and …