Showing posts from July, 2017

Pound/Dollar hits $1.3150, Pound/Euro at €1.1230

GBP/USD rate have risen to their best in almost a year, after last nights FED interest rate decision. They left rates on hold, and made comments about inflation slowing which lent investors to decide that interest rates would not go up again in the short term. This weakened the USD and pushed Pound/Dollar rates to $1.3150, the highest we've seen in 10 months.

Elsewhere, Pound/Euro rates have nudged above €1.12 following an upward revision of UK GDP to 0.3%. This lent the Pound some support, but GBP/EUR remains close to a 9 month low. The Euro has benefited a little from the Dollar weakness, keeping Pound/Euro rates subdued. I think that with limited progress being made with Brexit negotiations, there's a good chance the Pound will come under further pressure in August.

Those that need to buy Euros or Dollars with Sterling may wish to consider fixing a rate with a Forward contract. This allows you to freeze the current rate for up to 2 years by lodging a 10% deposit. It protect…

What could move Pound/Euro rates this week?

It's been a pretty quiet start to the week, with most major exchange rates largely unchanged. Pound/Euro rates have managed to recover slightly from €1.11 to €1.12, due to slightly worse than expected EU PMI numbers yesterday, making the single currency cheaper to buy. We're still some way off the €1.14 of a week ago however.

Will Pound/Euro rates go up or down this week?
Today is pretty quiet in terms of economic data that could move rates, however as we progress through the week there are several releases that could affect GBP/EUR. We start this evening at 6pm when one of the Bank of England's MPC members gives a speech. If he gives any indication that interest rates may rise it has the potential to push the Pound higher.

Tomorrow things get a bit more interesting, as we will see the latest UK GDP numbers, which are expected to show quarterly growth of 0.3%. If the actual release is higher or lower than this, the Pound will go up or down accordingly. We also have Mortgage…

Pound/Euro falls into the €1.11's

It's not been a particularly good week for Sterling, with it starting at €1.14, and today falling into the €1.11's. Despite better than expected UK Retail Sales numbers, the Pound fell due to concerns over Brexit negotiations, with Liam Fox stating that we could have a 'Hard Brexit' with no deal. This sent Sterling lower against other currencies.

Brexit talks weaken the Pound
With seemingly little progress made in talks this week, it seems there isn't much negotiating going on in these negotiations, but rather the EU still digging their heals in and refusing to make any concessions with regards to the jurisdiction of the ECJ on EU residents of the UK, which both sides have said is a 'red line'. One side will need to make concessions, as otherwise there will be a stalemate, and this increases the chance of the UK leaving without a deal, weakening the Pound due to the uncertainty it would cause for business.

Euro strengthens, despite ECB efforts
Elsewhere, …

Outlook for Sterling/Euro

As I mentioned in yesterday's post, GBP/EUR rates have settled at €1.13, falling due to the softer inflation numbers which in turn mean it's unlikely that interest rates will rise this year.

In today's post I'll look at the key events in the next few days that could affect Sterling/Euro rates.

UK Retail Sales figures
These are due to be released on Thursday at 09:30am and are forecast to show a 0.4% rise. Consumer spending has been surprisingly robust over the last year and it will be interesting to see if the number is above the forecast. If so, expect the Pound to rise against the Euro. If the number disappoints then it's likely to send GBP/EUR down into the €1.12's.

ECB Policy statement
Tomorrow at 12:45pm the European Central Bank (ECB) announce their interest rate decision, and it's widely expected they will leave rates where they are at 0%. What could move rates however, is the press conference and policy statement due at 13:30pm. There has been talk…

Pound falls on inflation figures

We've just seen the latest UK inflation figures, and they came in lower than expected, sending the Pound lower against both the Euro and US Dollar. Why did the Pound fall? It's due to the lower inflation numbers taking pressure off the Bank of England to raise interest rates. Their next meeting is on the 3rd of August, and this morning figures mean it's now highly unlikely that more than 1 or 2 of the MPC members will vote for a rate hike.

Lower interest rates for longer weakens a currency due to the low return on offer, and that is now reflected in the value of Sterling, which is now at €1.13 vs the Euro and $1.30 vs the US Dollar, as you can see from the charts below.



What next for the Pound?
Later this morning we have Economic sentiment measures from Europe that could further affect GBP/EUR rates if the numbers come in above or below forecast. The next main UK Release of note is Thursdays Retail Sales figures which are a good barometer of how the…

Sterling surges higher against Euro and US Dollar

We've seen a huge surge for Sterling this afternoon, with GBP/EUR breaking through the €1.14 barrier and GBP/USD breaking through $1.30, with both pairs continuing to rise above these levels.



It's a very positive move for the Pound, that was as low as €1.1173 against the Euro just a few days ago.

Why has the Pound risen against Euro and US Dollar?
With no UK data of note it's other factors causing the move. Earlier today we had much worse than expected Inflation and Retail Sales data from the USA. Initially this weakened the USD and strengthened the Euro, but it seems that following the poor US data, increased risk appetite has resulted in investors deciding that Sterling is the best place to put their funds ahead of the weekend break. This has helped push the Pound higher against other major currencies.

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GBP/EUR, GBP/USD, GBP/CAD forecast 2017

Pound/Euro back in the €1.13's
Those that need to buy Euros will be pleased as the GBP/EUR rate has recovered from yesterday's lows of €1.1173. The jobs data I mentioned in yesterdays report was the catalyst for the Pound fighting back, rising back steadily throughout trading yesterday.

Today, it's risen back towards the mid €1.13's, coming back into the range it was stuck in for most of June. The reason that the Pound gained strength was speculation on interest rates; the same thing that caused it to drop earlier in the week. Today, one of the BoE members Ian McCafferty said that the BoE could consider ending it's QE programme soon. He is one of the members that has been voting to raise interest rates. I think it's about 50/50 whether the BoE will raise rates this year, and that's why any tiny snippet of info is pulling the Pound up and down.

Those that need to buy Euros may wish to consider locking in a rate while things are looking better. It's within…

GBP/EUR falls into €1.11's before recovering

The Pound/Euro continued to fall after my post yesterday, dropping as low as €1.1177 this morning which is the lowest we've seen the pair in about 9 months.

We have since seen the pair bounce back however after UK employment figures released at 09:30am were better than expected.

UK unemployment figures help push Sterling higher
Unemployment is now at 4.5% and wage growth at 2%. Both of these were better than expected and helped push GBP/EUR back to around €1.1250 at the time of writing. Despite the encouraging numbers, wage growth is still lagging behind inflation, and this has kept the Pound from gaining significantly. We also saw better than expected EU industrial production figures earlier today, helping to halt the rise of Sterling/Euro as the single currency strengthened and fought back.

US events likely to drive GBP/EUR and GBP/USD in short term
This afternoon will be interesting as the FED chair Janet Yellen testifies before congress. Her comments could affect not only GBP…

Why has the Pound fallen to €1.13 against the Euro?

Today the deputy Bank of England governor Broadbent gave a speech, and there had been speculation he would give his views on monetary policy. The markets were expecting him to hint at an interest rate hike later in the year, and throughout the morning Sterling gained on this expectation.

In fact, his comments were quite dovish, and he stated that he thinks Britain will suffer if its existing trade links with the EU are weakened by Brexit. He declined to give any views on interest rates and monetary policy, and so this morning gains were wiped out in an instant, sending GBP/EUR back to €1.13 and GBP/USD back to $1.29, as you can see from today's graphs below.


What next for Sterling?
Tomorrow's unemployment data will be the next test for the Pound. Markets expect unemployment to be at 4.6%, with average earnings at 1.9%. If the actual figures are better than this, the Pound might rise. If the number is lower, then it's likely the Pound will drop into the €1.12…

What could move Sterling exchange rates this week?

As I mentioned in my last post on Friday, poor UK data at the end of last week weakened the Pound and pulled the GBP/EUR rate to €1.13, where it remains today. It has hit support at that level, and with a lack of any data from the UK today it hasn't moved much since the end of last week.

In today's post I'll look ahead to the coming week and list the economic data releases that I think will affect Sterling.

This week's data releases
Below are the scheduled releases for the coming working week. Other things of course could move Sterling exchange rates such as any political developments or news on how the Brexit negotiations are going.

Monday 10th July 2017 - it's been a quiet start to the week with only some minor trade balance data from Germany. This was better than expected, strengthening the Euro and keeping GBP/EUR in check at €1.13. Later this afternoon we have Consumer credit data from America that could affect GBP/USD. Just before midnight we see New Zealand&#…

Poor UK data pushes GBP/EUR to €1.13

We've finally seen some movement in Pound/Euro rates following a period of the pair being stuck at the €1.14 level. In the last 24 hours we have seen the pair drop around 1 cent to the low €1.13's:

Why has the Pound/Euro rate fallen?
It's combination of two factors. Yesterday there were yet more noises from the European Central Bank hinting that they would be ending their stimulus programme soon. Economic data coming from Europe has been pretty good of later, helping to strengthen the Euro and that has made it a little more expensive. This news pulled GBP/EUR down to around €1.1350 yesterday.

This morning, we had some UK data and the figures were not good. Industrial and Manufacturing production data released at 09:30am this morning came in below forecast. Trade Balance figures were also worse than expected, and investors sold the Pound on the news, weakening Sterling and pulling the Pound lower against the Euro and other major currencies.

What could move Sterling exchang…

Getting the best foreign exchange rates

There's not much to report in terms of the GBP/EUR rate. It is very calm, and the pair remain within a half point range, and doesn't seem to want to budge from €1.1350 - €1.1400 (click here to view live currency graphs).

With the market quiet, it's an opportune time to remind our readers what we offer, in addition to the regular market commentary explaining what is happening with exchange rates.

Converting Currency at the best rate
I work for one of the UK's largest currency brokerages, with a turnover of £4.5 billion per year. This is my personal blog that I have been updating for over 8 years, to provide insight into what is moving exchange rates, in order to help existing and new clients decide when to fix a rate of exchange.

We do not offer cash or holiday money. We help private and business clients with large volumes to convert, and achieve rates of exchange that are significantly better than you would normally be able to achieve by simply using your bank. Usually …