Monthly Archives: February 2011
All eyes on a possible Eurozone rate hike
The prospect of an interest rate hike in the eurozone could take a step further today as CPI (Consumer Price Index) Inflation is data is released. This will show the change in the value of the cost of goods and services in the European Monetary Union. If the cost of goods and service is rising too fast there will be an increase in pressure on the ECB to implement a rate hike.
The data is expected to show a rise in inflation acoss the eurozone in YoY figures but a reduction in MoM figures. There is a growing expectation that the euro will now be the first currency to embark on a rate hike, ahead of the UK and the US. This is most interesting as there was a very high expectation that the UK would be the first to raise rates. This caused the pound to gain significantly against the euro but since that anticipation was removed the pound has weakened. A growing expectation the euro will raise rates will surely strengthen the euro.
We have a number of contract options which seek to limit your exposure to the currency markets. For a small desposit we can book todays rates for the future on a forward contract. This will give you peace of mind and stability for your currency purchase.
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.
Sterling Euro Rate Movements
Sterling Euro rate movements recently have been very unpredictable due to a number of factors. The movement between the high and the low in the last month has been 3.67% which has presented some excellent buying and selling opportunities.
In the UK the focus has been on interest rate hikes and it looks like the market has well over estimated the expectation of a rate hike. Therefore the recent sterling strength which has caused the GBPEUR rate to breach 1.20 has now dropped to a month low of 1.1660. We have also seen strength on the side of the euro which has steadily climbed against the dollar. The reason for this euro strength emanates from money being moved away from the dollar on the back of the Oil Crisis and the prospect of an interest rate hike in the eurozone. Whilst not imminent there is a strong prospect of this occurring whereas the prospect of an interest rate hike in the UK is very low.
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.
Band of England Minutes released
Earlier today the Bank of England released their meeting minutes from 2 weeks ago. It confirmed the speculation that more members had voted for an interest rate hike in a cry to curbe inflation which is sitting twice as high as the government target. The concern stands that as commodaty prices raise along with fuel and food costs inflation will continue to climb.
The markest reacted possativly and the pound reached close to a 6 week where clients ready to trade securied their exchange. Now however the rates have falled back down as it was confirmed Andrew Sentence, one of the standing members that has been pushing for a raise, will be leaving the Monetry Policy Commette in the next few months. It affected the concesses of when the UK could raise rates.
If you are in a position ready to send money abroad and want to catch the peak, make sure you complete a comparision to make sure you achive the best price from the industry.
UK Public sector borrowing down
This morning UK figure showed a larger than expected surplus on Public Sector Net Borrowing. The figures have been seen as positive for sterling as it is in line with their fiscal targets. In early trading sterling gaining over 0.5% against the euro making a difference of over €1,000 on a £200,000 transfer. The only concern is that the National Statistic mentioned that due to strong January figures Februarys may be lower than normal. So the figures in 4 weeks will give a better “real” outlook of the recovery of the UK with how much revenue it is collecting through tax’s.
The focus on the market still lies with speculation on tomorrows Bank of England minutes and the middle east turmoil effecting commodity prices. I would expect sterling to gain further this afternoon up to the event but be wary as this speculation also happened with the inflation figures last week which was wrongly placed. When the inflation figures were less positive and the markets fell back. This could happen tomorrow so todays rate, close to a 6 week high may be lost.
If you would like more information feel free to contact us and either myself, Jonny or Dan will get in contact.
New Zealand spike
As you may be aware there has been a serious 6.3 magnitude earthquake in New Zealand. This has resulted in the NZD weakened by nearly 2% so far this morning, resulting in an additional NZD $8,350 being achieved on a £200,000 transfer. I would expect this story to develop as news and reaction is released. For up to date information please contact us directly should you have any requirements to send New Zealand dollars.
Our thoughts go to anyone involved or relatives effected.
The week ahead?!? Commodities changing the markets
Afternoon readers,
Many will be watching the news at the moment about the uprising across northern Africa and other states but many will be unaware about the effect on the currency markets. At the moment it has been a positive thing for the euro that has gained against a majority of currencies. This was due to its lower exposure to the commodities that are being effected. Oil has been the largest hit as speculation continues about supply problems which has weakened the largest user, the USD.
Other large events will be Wednesday Bank of England minutes that are due for release at noon GMT. The question here is whether the 9 members of the MPC that vote on interest rate changes would have changed from previous months. If more have voted for a rise, which is the speculation at the moment I would expect sterling gains. On the other hand as this has already started to be priced in, if this is not seen we could see considerable sterling weakness.
Also this week we have US housing figures, this is one of the key factors that started the most recent global financial crises and one that has seen very little growth in the last 2 years. Again these figures could be seen either way, for example if positive it could weaken the dollar as it shows the US foundations are improving. On the other hand it also shows that the global markets are improving so the dollar could weaken as risk appetite changes.
The euro also has its own news out this week industry order, and industry confidence. These are released on Tuesday and Wednesday and are expected to strengthen the euro.
Feel free to contact www.eurorateforecast.com for m0re information.
Excellent Day to Buy Euros!
This morning GBPEUR is already at the month high and today at 09.30 am we have UK Retail Sales. Following poor Christmas Sales in December we are expecting some strong figures which I think will further help the pound. We have had German Inflation Data released this morning on the Producer Price Index showing a significant rise against an expected fall in both MoM and YoY figures. This could be weakening the euro and it could provide a good opportunity if you have GBPEUR requirements.
The pound has been trading strongly lately because the markets expect an interest rate rise. Mervyn King the Governor of the Bank of England has however said he will not raise interest rates just because inflation is high. He said ’That decision has not been taken and won’t be taken until we get to the next meeting or the following meeting, or it may be many quarters’. Sterling lost over 1.5 cents against both the euro and the dollar on Tuesday because the expected interest rate hike was downplayed by Mervyn King.
If and when the hike is downplayed again we could see further losses.
I think therefore the Retail Sales today could provide an excellent buying opportunity. Those selling eur or usd may wish to consider that rates look set to go against you currently and longer term as a rate hike becomes more imminent.
GBPEUR is currently very close to the month high and GBPUSD is close to the 3 month and 12 month high. If you want to take advantage of any spike for the pound euro rate please let us know and we can call you straight away. Even if you have requirements later in the year for a small deposit you can safeguard todays rates for a future date. Speak to us and find out.
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.
Will an interest rate in the UK or the Euro help or hinder?
As speculation continues to mount about when the UK will raise interest rates it is worth thinking about what will be the reaction in the currency market.
Generally in the past charts show that when an interest rate is made that country benefits from more investment and that the respective currency normally gains, but these examples are all 2-3 years old before the recent financial crises. The truth is that no one knows what the currency markets will do, hence the saying “more is lost through indecision than a poor decision.” So we have to ask ourselves whether we think that an interest rate hike will actually have a positive benefit to the currency and consequently whether it is worth waiting for a raise. (That is if they do and if they do in the UK before other.)
The facts stand that the UK has double the target level of inflation, new taxes that are yet to be felt by the consumer and that retail figures are key to growth. So it is clear that for the UK to continue to recover money needs to flow and households need to continue to spend. However the average UK household has enjoyed low mortgage payments for a number of years that have helped spending. So I think it is fair to say if mortage repayments go up there will be actually less spending and therefore less growth. You can see the difficulty felt my the market in forecasting whether GBPEUR, GBPUSD and rest will go up if a raise is announced?
It does seem clear though that as speculation continues rates will rise so it may be prudent to take these opportunites if you have a exchange to make.
Sterling shocker as speculators bet wrong
Afternoon readers,
As regular watchers of the market will be aware there had been a building speculation on today’s events, both UK unemployment and the UK’s quarterly inflation report. This was found to be untrue as these speculators pulled back after the head of the Bank of England spoke earlier less favourably than expected. Sterling has fallen today due to this against almost every currency and I would not be surprised to see this continue this afternoon.
Tomorrow there is a number of USD reports expected that will probably help claw back these losses but there is not anything as clear for how GBPEUR will end this week. I would imagine the hawks in the market that speculate on these events will wait until next week now when the Bank of England minutes are released but as always there are no promises.
If you are planning a currency transfer shortly contact us today so we can highlight these peaks for you. This morning we helped a number of clients move quickly minimising the losses that they experienced compared to that of the high street bank.
GBPEUR take a tumble! As predicted yesterday…
The precarious nature of exchange rates has been perfectly illustrated this morning as the pound lost value affecting the euro rate. With a relatively quiet day on the markets for the euro, all eyes focused on the Bank of England Mervyn King’s Quarterly Inflation report.
His notorious sombre tones have eradicated all of yesterdays gains by the pound and sent the GBPEUR rate tumbling to 1.1860. Informing my clients this morning that their hallowed 1.20 is not looking likely in the short term is often met with cries of ‘but it was so close yesterday’. Yes it was close yesterday, perhaps it would of been a good idea to take advantage of the spike and not risk those excellent gains for further ones.
Hindsight is of course a wonderful thing in such matters but there is a very important point to be made which any canny investor will pass on. Buy when things are on the up and sell when things are moving down. Like gambling it is the chasing of the bottom or top which leads to the losses. Suck up your minor losses or gains and play safely. To quote the great investor and actually one of my old bosses, Mr Warren Buffet ‘Be fearful when others are greedy, and be greedy when others are fearful’.
Here at eurorate we cannot predict the future but we can offer expert opinion on what is happening in the market with a view to saving you money. We also aim to make your transfer safe and hassle free so why not find out for free if you would benefit.
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.
European Growth Rate Slows, GBPEUR remains attractive
Eurozone growth figures slowed to 0.3% for the last quarter, figures released today showed. This combined with strong German growth figures also released slightly earlier today have given us a mixed bag of results for the eurozone. It is clear to see Germany is the backbone of euro economic strength, whilst the rest of the region struggles.
One of the main drivers on GBPEUR was however inflation data from the UK. The pound climbed to a month high against both the euro and the dollar. The Inflation data came in less than expected and initially the pound struggled, but following the EU GDP data and a realisation by the markets that a rate hike in the UK was still very much a possibility, GBPEUR has climbed to 1.1964 as the high of the day.
This represents a great opportunity for those buying euros, but of course the rate won’t just keep improving indefinitely. More often than not after a day of gains we actually see movement back the other way as investors seek to profit from the movement.
Despite the improved confidence for the pound, the UK is struggling and the euro has been notoriously strong this year. The markets are as ever unpredictable so why not speak to the currency experts who write this blog to find out how our bespoke contract options and expert opinions can save you money.
Speculators expect Sterling spike
Over the next 48 hours we have a number of reports coming out and many speculators are expecting sterling to rally. We have inflation, and unemployment for the UK plus a key speech by the head of the bank of England tomorrow morning. Many believe it will include a warning about inflation climbing that is going to leave the bank with little option other than raising rates. With unemployment figures expected to stay at 7.9% it could potentially be the weak link, if this was to rise potentially sterling could weaken as it makes it less likely of a rate hike the short term.
Euro has its own releases with GDP figures and the US has a number of key reports.
If you are looking to complete a transfer and have missed opportunities before now is the time to prepare. Make sure you have funds in your current account rather than a savings account and get in contact today to discuss your situation and potentially optimum time to complete your exchange.
