Showing posts from February, 2017

GBP/EUR and GBP/USD forecast

Pound/Euro currency forecast
GBP/EUR rates remain stuck the familiar territory it has inhabited for most of 2017, the low €1.17's. It has been driven back from last week's 2 month highs due to political concerns over another Scottish referendum. I think it's unlikely the government would allow one while Brexit negotiations are underway, however the market reacted to the potential uncertainty sending the Pound a little lower.

It's only a week or two until article 50 is invoked, and in the short term I expect the Pound to move lower when it's triggered. After that, much will depend on how the negotiations go. I'm sure there will be leaks and counter leaks from the British government and the 27 EU member states, and each one will impact GBP/EUR rates depending what the markets think. One thing is for sure, and that's the fact that we are in for a very volatile few months for Sterling/Euro rates.

Long term I feel that when the uncertainty is lifted and ther…

GBP/EUR falls back to €1.17: what could move rates this week?

GBP/EUR rates rose to €1.19 last week, but as is often the case the spike was short lived.

This morning, rates have retreated back to around €1.17, wiping out all of the gains we had seen and bringing exchange rates to buy Euros back to where it was a month ago.

The current levels are still pretty good though all things considered. In January we had seen the pair drop to €1.13, and given that in a few weeks time Article 50 will be triggered, there is every chance that the Pound will fall further in value.

It is really only weakness in the Euro that's keeping rates at the current levels, with fears of political upsets in upcoming Dutch and French elections keeping the single currency subdued. If it were not for these events then rate would likely be much lower.

If you need to buy Euros then get in touch today to find out more about the exchange rates and service we offer. Our exchange rates are extremely competitive and we also offer various contract types to help take advantage…

Pound/Euro reaches 2 month high of €1.19

Sterling/Euro rates had been stuck at around the €1.17 for quite a while now, but we've finally seen an upward move with the pair breaking out of its range, briefly hitting €1.19 today which is the highest we've seen in 2 months. The spike was brief however, and the rate has already slipped a little but it's still comfortably above €1.18. Not too bad considering a month or so ago it was 5 cents lower. If you need to buy Euros it's certainly worth considering taking advantage of the gains while higher rates are available.

Why have GBP/EUR rates gone up?
I mentioned on Monday that its politics driving the currency markets at the moment, and that is the reason for the rise on this occasion. We have elections in France soon, and the far right candidate Marine Le Pen gas gained ground in recent polls, and as a result the Euro has weakened and become a little cheaper to buy.

She still has to make it through the second round but the latest polls increase her chance of getting…

Will the Pound rise or fall this week?

What moves exchange rates? 
The four mains things are Economic data, political events, natural disasters and acts of war. Some of these are by their nature totally unpredictable, however economic data releases are known and forecast in advance.

While it's impossible to predict exchange rate movements, with a sound knowledge of what moves the rate and upcoming data releases, you can make an informed decision on what action to take in terms of when to fix a rate. Below I have listed the main economic releases for the week ahead that could affect exchange rates including Pound/Euro. Political events have been having a much bigger impact on the currency markets of late, so also watch for any Brexit developments or unexpected tweets by President Trump about his 'phenomenal' tax plans.

If you need to convert currency and would like a quote, or my views on which way rates may move in the coming weeks and months, then click here to get in touch. Simply provide the currency you wi…

€ Up, $ Down, £ Flat….

Euro up 
Yesterday we saw GBP/EUR rates slip away around 1 cent to the €1.17 mark. The reason for the fall was the Euro gaining strength and becoming more expensive to purchase as it rose in value.

The catalyst for the Euros gains was the release of the minutes to last month’s European Central Bank (ECB) meeting, showing that there was little appetite for scaling back their stimulus measures.

It was thought that with inflation rising the ECB would be tapering its Quantitative Easing (QE) programme, however they kept the door open for even more stimulus this year, despite rising growth. This is probably due to the upcoming high stakes elections in the EU meaning policy makers want to maintain a ‘steady hand approach’ to provide stability and predictability in an environment still characterised by a very high level of uncertainty.

This means that in their March meeting, no changes are likely, and the next review is not until June. The minutes also said that negative risks have receded, …

US Dollar strengthens on interest rate rumours

Yesterday the FED chair Janet Yellen indicated that interest rates in the USA are likely to go up soon, but what does this mean for exchange rates? Interest rates are key to a currencies value, because if the US does raise rates, it means more return for investors. These investors then buy US Dollars causing it to rise in value. We saw that happen yesterday as the GBP/USD rate fell as the Dollar became more expensive to buy.

Euro weakens as Dollar strengthens 
It can also affect Pound/Euro rates too. Yesterday as the USD gained strength, the Euro weakened as investors sold the Euro to buy the Dollar, and that's why GBP/EUR rates rose to €1.18 yesterday. It was due to weakness in the single currency rather than any strength for Sterling.

Sterling moves lower on employment data
This morning we saw some minor jobs data from the UK. Those claiming unemployment dropped significantly, which was good news. However wage growth slowed to 2.6%. This is important as regular readers will be w…

Pound/Euro falls on low inflation figures

Sterling/Euro rates reach a high of €1.1825 this morning but true to form, the high level didn't last, and has dropped a cent to the low €1.17's. This is due to inflation coming in lower than analysts had expected, which reduces the chance the Bank of England will raise interest rates this year. Go on-line and I'm sure that you will see the major news outlets shouting about inflation being at the highest level for several years, but for the currency markets what matters is how the figures come in compared to the forecast, and analysts had expected the number to be even higher. So while inflation is high, it's not as high as the market had expected and that's why the Pound has fallen.
Following the UK data however, we had a raft of negative EU growth figures which has weakened the Euro slightly, halting the decline in GBP/EUR rates. Rates to buy Euros have been flat hovering around the €1.17 mark for a week now, having risen from €1.13 last month, but with article…

What economic data could move the Pound this week?

The Pound is holding on to the gains it made last week after a pretty quiet day on Friday. We open the week with Pound/Euro at €1.1757, and Pound/Dollar at $1.2511. (You can see live charts on all major Sterling pairs here.)

Below I've listed the main data releases for the coming week that could affect the Pound. If you need to exchange currency at the best exchange rates, click here to get a free quote.

This week's economic data releases
Monday 13th February - Today is very quiet with no data of note so markets will move on any political news.

Tuesday 14th February - We have inflation figures today from both the UK and Germany. As inflation impacts interest rate movements, we could see GBP/EUR move depending on the results. Elsewhere, the EU releases GDP figures, growth forecasts and Industrial production numbers. Lots today then that could affect Pound/Euro rates.

Wednesday 15th February - Nothing of note from the UK today, but GBP/EUR could still be affected by EU trade balan…

Sterling supported on strong Industrial & Manufacturing figures

The UK just released its latest Industrial and Manufacturing production figures, and yet again the UK has shown it's economy is strong and resilient despite uncertainty surrounding Brexit, confounding expectations of a slowdown. Analysts had expected year on year growth in manufacturing to be 1.8%, but the actual figure was 4%. Industrial production has also beat forecasts, coming in at 2.1% monthly growth against an expectation of 0.5%.

It's given the Pound a bit of a boost, but only back to the €1.1750 mark where the rate sat for most of yesterday. GBP/EUR seems to be unable to break this barrier and is likely being held back by concerns over the invocation of article 50.

As I've mentioned in earlier reports this week, GBP/EUR has risen to these levels many times of late before dropping back away again. Given a few weeks ago it was as low as €1.13, if you need to convert Sterling to Euros then consider taking the gains while they are still available.

Looking for the best …

What does 2017 have in store for exchange rates?

Last year proved to be one of great change, and many of these changes had a significant impact on exchange rates. 2017 may prove to be one of even greater change, so let's have a look at what's in store and and how you can limit your exposure. 

Key 2017 events:
March 2017 - Article 50 is likely to be invoked. Uncertainty surrounding the uncoupling process and future trade negotiations are likely to weaken sterling and the general consensus is that it’s likely the Pound will fall when this happens.17th March 2017 – Dutch elections. The Dutch have already voiced a desire for a referendum. A ‘vote for change’ could trigger this, which may weaken the Euro.April/May 2017 – French elections. A right wing win would bring about the possibility of the French having their own referendum and would therefore also be EUR negative. September 2017 - German elections. Unlikely to see Merkel ousted, however a growing number of German’s are unhappy footing the European bill, and if Merkel doesn…

Pound/Euro rises on BoE comments

Good morning. We've seen a decent spike in GBP/EUR rates over the last 24 hours rising from €1.16 to €1.1750 which is the level we were at around a week ago:

Why have Pound/Euro rates gone up?
It was due to comments made late yesterday by Kristin Forbes, one of the Bank of England's Monetary Policy Committee's rate setters. She said that as there are no signs of the economy slowing, and with inflation rising, interest rates may need to rise soon. This caused the Pound to rise against the Euro and other currencies as you can see in the chart above.

She also said that Brexit negotiations would likely drive moves in the Pound, and with Article 50 only a month away, there are risks the rate may drop off again as has been the recent trend.

If you look at the graphs over the last 3 to 6 months or so, you will see that GBP/EUR has been following a trend where it gets to these sort of levels, before dropping back away again due to uncertainty over Brexit. There's no way to kno…

Pound falls further on poor Retail Sales figures

The Pound has fallen against the Euro and US Dollar overnight, as figures showed that Retail Sales were much lower than expected. It's a further sign that due to rising inflation and rising prices caused by a weaker Pound, consumer spending is starting to slow. In general the positive economic performance of the UK recently is due to consumer spending, and as people tighten the purse strings this may well cause the economy to slow in other areas. There is a risk then that the Pound may have further to fall this year. The chart below shows GBP/USD rates over the last 24 hours:

Will Pound/Euro rates go up or down in the next 3 months?
I am still of the view that later in the year Sterling will recover against the Euro and other major currencies. There are some significant political events in Europe in the coming months such as elections in Holland and France that I think may weaken the Euro, and push GBP/EUR rates higher. If Marine Le Pen wins the presidency that's likely to wea…

Pound/Euro remains subdued and could fall further this month

Sterling fell last week after the Bank of England said that while inflation is likely to rise, they won't be raising interest rates to counter it. There had been rumours of a hint of a rate hike towards the end of the year, but there was no hint from Carney. Also pushing the Pound lower on Friday after Services Sector PMI came in lower than forecast. Here's how GBP/EUR has moved over the last 3 months:

Will Pound/Euro rise or fall in the coming months?
Keeping GBP/EUR low is the fact the single currency gained some strength recently. This was due to one of Trump's advisor's stating the the Euro is grossly undervalued, and his comments caused the Euro to gain strength and become more expensive to buy. Over the weekend, the German finance minister also said the Euro is too low, and so there is the risk Germany may try to influence monetary policy with the ECB... if the Euro strengthens then GBP/EUR rates will drop further. With article 50 likely to be triggered next  mon…

Why is the Pound falling?

Sterling has fallen today after the Bank of England released its inflation report, interest rate decision, and press conference. While they raised the growth forecast for the UK as expected, they saw the economy slowing in 2018, and the reason for this is something that I mentioned in posts earlier this week; inflation. The result has been investors selling the Pound, causing it to weaken and fall against other currencies. Here's how GBP/EUR has moved today:

Inflation key to the falling value of Sterling
With inflation levels set to rise above the BoE's 2% target, they have stated that they will tolerate this, meaning interest rates are unlikely to be raised to try and combat rising prices. Low interest rates = weak currency. At the same time, wage growth is not expected to match inflation, meaning that real incomes are likely to drop. As this happens consumers are likely to spend less, weakening the economy and causing it to slow. Slowing economy = weaker Pound.

This is exact…