Monthly Archives: December 2010

Euro Gains on Sterling

December 31, 2010   Euro Strength

After reaching a 3 month high close to 1.20 only two weeks ago, the pound euro rate is today trading in the mid teens, with the interbank level at 1.1590 currently. This I believe is not only due to the thin trading conditions experienced around this time of year, but also due to a weakening pound in anticipation of next years market conditions. It is therefore providing a good indicator as to next years performance on the currency pair, particularly for Q1.

The UK’s economic outlook is very bleak. Inflation and unemployment are rising and the full effect of the budget cuts are yet to be seen. There had been a hope that a weak euro next year may provide some excellent opportunities for buying euros, but the quesiton for me is whether sterling is strong enough to capitalise. Right now the pound does not look very capable.

I would expect the GBPEUR rate to go down further next year and whilst we may see some euro weakness following discussions over Spain’s solvency, European Finance Ministers have shown they are prepared to step in to save the euro. Next year should prove interesting as we see how much more pressure the euro can take. I personally feel it can take quite a lot more. Sterling euro rates are back in the range they have occupied for the last three years and could well drop lower. This presents some fantastic selling opportunities for those with sold property overseas they are looking to bring the proceeds of sale from. If you are looking to send money overseas for any reason please contact us to see if we can save you money.

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Merry Christmas to you, and the Euro :)

December 24, 2010   Euro Strength

The Euro will next year approach it’s 16th year of existence. It is the worlds second largest reserve currency after the US dollar and as of June this year the euro was the currency with the most coins and notes in circulation with €800 bn in circulation – more than the US dollar.

The euro has received much unwelcome attention in the last few years with some calling and predicting for it to fail. I don’t personally think this will ever happen and the main reason for this fear is the fact the euro is still so young a currency. We have seen in the past how the eurozone by nature is a very difficult prospect. You have a multitude of economic, political and social groups which all falling under the ‘European’ umbrella are being ruled by the same rules and principles.

We have seen from history how trying to apply one set of rules and beliefs to different cultures can create problems and difficulties. But with the correct management of all the parties interests a common goal or good can be established. This was most definitely the goal at the outset of the European Union, and hence the euro. Quite basic prinicples of liberty were established – like the free movement of goods and services (the removal of trade barriers) between member states.

The problem is that over time the scope of this intervention has increased to the extent that now there is one single economic policy for all of the countries who have signed up to the euro. The euro has been significantly tested this year but many currencies have had tough times. Black Wednesday in the UK caused sterling to majorly suffer against all the majors. The Deutschmark in the 1920′s suffered from hyperinflation and became a very stable currency many years later.

These examples may be extreme but talk of any currency ‘failing’ is very extreme and I think fears of the euro collapsing next year are overcooked. My question would be as to what steps need to be taken to keep the euro resilient for the future. We are seeing cracks within the eurozone develop and whilst not life threatening, steps need to be taken to ensure that utopian views on cross border polictical, social and economic integration are realised.

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit www.overseaspropertysearcher.com and let one of our property experts make the hunt much easier for you.

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Merry Christmas!!

December 24, 2010   Euro Strength

Merry Christmas readers,

Wishing all our readers a happy and safe Christmas and a fruitful 2011!

From the Euro Rate Forecast team.

If you are looking for the below remember to contact us!!

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We will be here and blogging every non-bank holiday working day over the festive season.

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Sterling forecast 2011

December 23, 2010   Euro Strength

Sterling Exchange rates this year have moved a lot with swings over 16% against the euro and 14% against the US dollar. This highlights the importance of timing transfers as even over the last 2 months an additional USD 15,080 or EURO 15,140 would have be achieved on a £200,000 transfer if you bought at the peak rather than the low.

Next year I think there are a number of large stories that could shape exchange rates.

Firstly the introduction of budget cuts in January across the UK. This ranges from the VAT rise to fuel cost and efficiency target on every area of government. Many are expecting a large increase in unemployment and hence consumer confidence, all key to the outlook of sterling.

Secondly sterling has a vast amount of exposure to the euro zone debt crises so if any other state was to fall and need support that additional money out of the economy is not going to help.

Third we have the issues the Bank of England has with the inflation levels in the UK. Normally this is counted by raising interest rates however this could cause problems with the housing market, and unemployment levels further.

Finally we have the coalition government. Over the last few weeks the government has again come under pressure and could theoretically add political uncertainty which generally weakens the currency in question. Add the above points and how the cracking government handles what’s being called broken Britain and it makes next year very uncertain.

If you are looking or planning to send money abroad next year you also have to look at the currency that you are buying, the other side of the coin and each have their own problems. The US is having major issues with unemplyment, the euro has its debt crises, but most of the other majors have natural resources that continue to be in demand so are gaining making them more expensive to buy. If you would like more information about a particular currency pair then feel free to contact us.

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Important Trading Day before Christmas break

December 22, 2010   Euro Strength

Following a week of so far little activity on the markets and hence little movement on the euro rate, today is really the day we could see volatility and good buying opportunities for those with requirements before the New Year. The euro could prove very volatile next year too so we may see some good opportunities for those keen to book forward contracts to avoid sustaining losses next year.

At 9.30 am we have the UK Bank of England Minutes from the last interest rate decision. I doubt we will see any change in the last 3 way split, but the anticipation for me is that this would perpetuate the uncertainty seen lately for the UK’s economic policy. At the same time we have more news from the UK with GDP figures for Q3. As one of the final revisions this could really carry some weight and move the GBPEUR rate. I think investors have been very weary of the euro and signs that the UK’s recovery is better than expected should help sterling make gains against the euro. At 13.30 we have US GDP figures which again could move the euro market. The dollar has been very strong lately on the back of debt fears surrounding the euro. Investors will perhaps be looking to this release to gauge the dollars worth as more than a safe haven in this current climate. We have seen alot of movement between the euro and dollar this year and could see more today.

If you have currency requirements next year it is worth remembering you can book today’s rates through us here at Euro Rate Forecast. With the debt issue clearly a major weight on the euro, next year may lead to a significant weakening of the euro. If you are selling property next year you can secure today’s rates for a small deposit. Feel free to get in touch to discuss all your options.

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit www.overseaspropertysearcher.com and let one of our property experts make the hunt much easier for you.

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When to sell sterling through 2010

December 21, 2010   Euro Strength

Morning readers,

As the show starts to melt (hopefully) people have started to review and take stock of the currency market this year. The pound has had a particularly different 2010 with a large spread between the high reached and the low. These include:

• Early on the UK economy began to emerge from the recession at the beginning of the year
• Then eyes turned to the national debt and the public was educated at the real state of affairs in the UK
• This became one of the largest drivers for voters in the election and the conservatives started to lead the polls and sterling climbed. This was also accelerated as Greece started to call for help and the first round shivers about euro debt went through the market
• Then austerity measures were the focus point for sterling for both the short term and long term in the UK
• Lastly we had the euro pull the pound down as Ireland asked for a bailout, the UK contributed 7,000,000,000 or the same as the whole of the savings made through 2010.

Next year will be a difficult forecast to make as there are still a number of large stories remaining to conclude. It is however clear that in the short/medium term opportunities will continue for well placed individuals watching the markets. If you would like more information about the markets, or would be interested in our professional opinion on your planed transfer contact us using the enquiry form.

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Rising Inflation in Europe – Two Tier Europe?

December 20, 2010   Euro Strength

We can see inflation came in lower than expected on the Producer Price Index figures released for Germany today. We are seeing Northern Europe emerging from the recession relatively strong while Southern Europe suffers.

What is the net result of this? I expect we will see more and more distance developing between the two sides next year creating movement on exchange rates.

Over the Christmas period we can see lots of volatility on the markets as the lack of data increases the importance of what information does come out. There is still much political discussion regarding the debt crisis and I wouldn’t be suprised to see this issue remain a major topic in 2011.

Tomorrow we have Public Sector Net Borrowing figures showing the amount of new debt held in UK government accounts. This has been a market mover for sterling lately as reducing the deficit is a top priority for the current governement. If you have any current euro requirements this could set the pace for the day’s trading so keep up to date with us here at ERF for all the latest news and sentiment on the euro!

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit <a href=”http://www.overseaspropertysearcher.com/“>www.overseaspropertysearcher.com</a> and let one of our property experts make the hunt much easier for you.

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Snowy forecast for sterling

December 20, 2010   Euro Strength

Good morning readers,

On a rather snowy day across the UK many may not consider the effects on the financial sector. However these can be vast and I would not be surprised to see several cents be taken off the value of sterling due to the weather over the coming days. Just look back to earlier this year when snow landed last in February and you can see the correlation.

Many are stuck indoors due to the weather which dramatically drops productivity along with retail sales in the UK. We have talked before about how important these both are to the strength of the UK. With less spending consumer confidence is also hit which can result in more unemployment. We have consumer confidence for the UK released tomorrow morning so if you are reading this and need to sell euro’s and send money abroad get in contact today for a full briefing on what could happen over the coming 48 hours.

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Sterling takes a pounding

December 17, 2010   Euro Strength

Morning readers,

This week the market has continued to be extremely volatile, with swings off over 1% on most days. Yet again it has been the euro debt crises that have over shadowed the more convention forecasts using just data releases.

This week however UK data has been extremely poor with higher inflation, lower house prices, high employment and then poorer retail figures. All of which are key but also together very difficult to improve. This is because helping one will normally result in making another worse. For example to lower inflation interest rates are increased, but this will hurt growth and probably increase unemployment. To increase employment QE can be used, however this will lead to even higher inflation.

This is a really tuff spot for the UK so due to both the confusion about the future and the uncertainly about the UK’s exposure to Europe debt sterling has lost several cents this week against a host of currencies.

Euro Debt news, well they held what can only really be called an emergency meeting being held yesterday and today to address the matter. The aim is to try and introduce confidence that there will be no contagion of the debt. (This is such a worry that even the US has sent specialists to help.) Last night they changed fundamentally how debt support is provided. Now instead of waiting months for support they will now wait hours. This introduced some confidence, however small in the euro’s future.

Looking ahead and to the festive season I image the large movements will continue and potentially increase as money in the market shrinks with the Christmas season. (Due to less money in the market to support positions, when a movement takes place there is less to slow it down and therefore we see larger swings.)

This however scary of clients looking to buy or sell sterling will change when to transfer money. Here we can highlight these movements that can have a dramatic impact on the exchange you secure, saving or making £1,000′s more. For more information contact us using the form below!

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Moody’s threatens Spain

December 15, 2010   Euro Strength

Moody’s the credit ratings agency has issued a warning that it may downgrade Spain’s credit rating. This is following a familiar trait to the events that plagued Greece and Irelabnd. It appears the markets are lining up their next victim. The euro has suffered in early morning trading losing about half a cent already against both the dollar and sterling.

 Today sees European Monetary Union Unemployment Data which is predicted to show a small increase in the numbers of unemployed in Europe. I would expect this to only compound what looks like it could be a negative day for the euro.

To get live updates on the markets and secure award winning exchanges rates that can save you money, please fill in the form and we will be happy to discuss all the ins and outs of moving funds overseas.

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit <a href=”http://www.overseaspropertysearcher.com/“>www.overseaspropertysearcher.com</a> and let one of our property experts make the hunt much easier for you.

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Euro Gains as QE move discussed again in US

December 14, 2010   Euro Strength

The fragile nature of the global recovery has once again be highlighted by discussion the US Federal Reserve will need to embark on more QE! The US is just not seeing the growth necessary to get the country moving again, and this is really worrying policy makers. This is a major political concern for the present government in the US, but should also be a concern for those with euro interests.

The euro and the dollar have performed conversely for sometime now. We have seen that when there is US dollar weakness – as there was following the last round of QE – the euro strengthens as investors move money away from the dollar. And when the euro debt fears resurfaced, investors have moved away from the euro to the historically safe dollar to protect their funds.

Those looking to buy euros may have missed the boat as sterling is taking a hit following a round of poor data releases. It really is not the case that just because the euro is experiencing difficulty, sterling should be able to make gains. The UK is massively exposed to this crisis through it’s banking sector and as such sterling will suffer as the euro crisis deepens.

Today sees UK Inflation data out at 09.30 GMT which will provide a good indicator of how the UK is performing and our need to raise interest rates.

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit <a href=”http://www.overseaspropertysearcher.com/“>www.overseaspropertysearcher.com</a> and let one of our property experts make the hunt much easier for you.

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Euro Debt Fears Remain

December 13, 2010   Euro Strength

European Debt Fears remain. But the pound is not benfitting. Fears for sterling’s recovery have today shown the pound to be very weak, losing over a cent against the euro in early morning trading.

This is presenting a great opportunity for those selling euros as I think this spike will not last. The current Debt Crisis situation in Europe has not gone away and will surely be a hot topic again soon. The million dollar question is when!

If you have any currency transacitons to make, please fill in the contact form and one of the experienced currency traders that write on this blog will be in touch to discuss how we can look to save you money.

If you are buying or selling a property abroad, have business transactions to carry out or simply need to get money overseas for any other reason and want the best exchange rates, just fill in the form below and one of the experienced traders that write on this blog will be in touch shortly. Alternatively, if you would like assistance in finding your dream home abroad then feel free to visit <a href=”http://www.overseaspropertysearcher.com/“>www.overseaspropertysearcher.com</a> and let one of our property experts make the hunt much easier for you.

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