Monthly Archives: February 2012
Euro rates performing better against the USD and GBP. Make sure you get the best rates for your exchange.
As my colleague Jonny alluded to in the previous post it is always critical to get comparisons when moving your money to make sure you are getting the best price on the market. Whether you are currently using your bank or one of the many brokers available contact me today, and quite simply, you will get the best rate on the market. As one of the largest independent brokers in the UK dealing with over 40,000 clients you can be sure you are in safe hands. Email me directly to discuss the service and the contracts on offer mgv@currencies.co.uk quoting ERF.
What now for the Euro?
To me the recent Greek bailout is doing little more than papering over a very deep crack. I personally feel it will only be a matter of time before Greece and the PIIGS of Europe rear their ugly heads again and pressure will creep back on the Euro. How long will the reprieve last? Your guess is as good as mine, however I would expect the short term confidence seen by investors to continue and therefore expect the Euro to be the major benefactor, particularly against the US dollar. I would expect a move towards 1.36 EUR/USD and 1.17 for EUR/GBP. I feel these levels will be short lived and anyone selling Euros could do well to take advantage of this recent spike.
Moves for the rest of this week?
For those with an interest in the the EUR/USD pairing you are probably aware US GDP figures this afternoon have been better than expected, leading to a positive move for the US dollar this afternoon. Also this evening we have the FED Beige book. The Beige Book reports on the current US economic situation through interviews with key business contacts, economists, market experts, and other sources are gathered by each of the 12 Federal Reserve Districts. The survey gives a picture of the overall US economic growth and following the positive GDP result I would expect sentiment in the US to be on the up. Initial moves may create a spike for the dollar, however I would expect this to ultimatley lead to a weakening in dollar value as positive data from the US gives global confidence and increased risk appetite. For this reason the US dollar can see negatives moves as its ‘safe haven’ tag leads investors to riskier currencies seeking greater returns.
On Friday retail sales figures from Germany will be important and due for release at 08:00. Expectations are for a marked improvement and this could well lead to Euro strength.
Are you getting the best deal on Euros? Compare your rates with us!
Good afternoon,
Today brings the launch of another new service from us here at www.eurorateforecast.com – The currency audit and comparison service. We are calling this the ERF currency challenge (Challenge us to beat your rate!)
Even if you have used the same company for years it is always worth checking you are still receiving the very best rates of exchange and the very highest level of service on your transfers. Due to the heightened level of enquiries through the site over the past few months and the large volume of new clients we have saved money we have decided to open this out to everyone. We all work for a specialist foreign exchange brokerage that has won awards both for exchange rates and customer service, so if you are one of the 27,000 unique visitors we have to this site every month and you find our information both informative and interesting then why not get in touch by filling in the red form on the right hand side of this page.
Data to be aware of this week
Last week saw some rather heavy losses on GBPEUR for anyone buying Euros and this week there is a whole host of data that could too move the market on Euro rates. With the Greek bailout now secure investors will probably turn to economic data that may outline whether or not or how severe any recession may be for the Eurozone. I would keep an eye out for:
German CPI – Tomorrow 13.00 – Inflation in Germany has been creeping up and could fuel the disparity in economic solutions required to solve Eurozone problems.
Wednesday 09.00 – German Unemployment – Germany has been outperforming the rest of the Eurozone and their Unemployment rate is forecast to remain at 6.7%. A healthy number when you compare to say Spain who currently has 20% Unemployment and EMU unemployment is at 10.4%. Unemployment is a big release for any country so this could move the market if figures come out better or worse than expected.
Thursday 1st March – German, UK and China PMI Manufacturing - Purchasing Managers Index data is a snapshot of activity in certain sectors. Thursday’s PMI is Manufacturing and will provide the most up to date assessment of manufacturing in these three economies. As mentioned investors will be interested to learn about whether or not it is looking like a Eurozone recession is on the cards and if so how bad it will be. Funds may be moved according to how this data affects these sentiments. Keep an eye on GBPEUR, GBPAUD and EURUSD.
I include China PMI mainly for clients with AUD interests. The Aussie can move on Chinese data so if you have AUDEUR interests you could well see some movement this week.
This list is by no means exhaustive, there will as always be plenty tomove the market this week and next. If you have any currency transfers to make and aren’t sure what to do or if you are getting the best deal you should really speak to us. This site has helped thousands of people save thousands of pounds. Dealing with us is extremely quick and simple and at no cost. If you would like to be kept up to date with what is moving your exchange rate please get in touch using the form or directly on jmw@currencies.co.uk quoting ERF.
www.eurorateforecast.com Predictions Correct Once Again.. But what next for Euro rates?
Anyone with their eye on the GBPEUR this week will have noticed a marked decline. In fact we are currently at the lowest we have been on the GBPEUR rate since December 12th 2011. If you are one of the many thousands who has contacted us to take advantage of the best levels in 18 months for buying euros, congratulations are in order if you listened to us and took advantage of the rate! The key factor we always pointed out was that sterling is still very weak and further mention of QE could damage the pound. It did perhaps take a bit longer than expected but the latest Greek bailout being secured plus the Bank of England Minutes showing more QE is possible, pulled the rug out of recent GBPEUR rates.
The key question of course now is what next for the Euro?
Well even with the bailout secured for Greece, you would find very few people, dare I say it anyone who believes this issue is over. The key problems we have highlighted on numerous occassions are the lack of growth and competitiveness. How on earth can Greece begin to pay back its colossal debts when its economy is shrinking? I still think it is a fair prediction that Greece will have to leave the Euro by the end of the year. The question is though what will this do to the rate? It is the uncertainty that often moves the market and if it is a well structured default it could cause Euro strength as investors are pleased to see the problem dealt with. Conversely we could see a complete breakdown of confidence in the single currency and a run on European banks similar to the Northern Rock crisis in Britain a few years ago. With such uncertainty ahead the gamble in this type of market is sitting on your thumbs doing nothing whilst rate fluctuations lose you money.
If I had to put my neck on the line (something regular readers will know I am fond of doing) I think that GBPEUR will remain in the 1.17-1.19 range for the rest of the week. UK GDP figures tomorrow could bring yet more misery for anyone holding out the rate will go back up for them. Let me make one prediction here quite clear. I do not expect to see rates up at 1.20 anytime soon. If you missed the boat on recent GBPEUR movements and are holding out for things to go back up, you really have to ask yourself why would this happen? As a specialist currency broker I have seen the rate go above 1.20 a few times in the last 4 years.. And everytime it has fallen back because the pound is still weak. And as we predicted this is what has happened this time. The only difference this time is that the UK’s recovery is underway and the underlying indicators are pointing to improvements. The interest cut in the Eurozone is also keeping the Euro weak. Nevertheless there is still a long way to go before the pound is strong enough to hold its head solidly above 1.20, even with the problems in Europe.
On EURUSD I would be suprised to see a break below 1.30 anytime soon. Certainly in the short term the US dollar has weakened and the Euro toughened up. We will need a pretty big shift in sentiments before we even break 1.31…
If you have any currency transfers to make and aren’t sure what to do or if you are getting the best deal you should really speak to us. This site has helped thousands of people save thousands of pounds. Dealing with us is extremely quick and simple and at no cost.
Feel free to speak to me directly on jmw@currencies.co.uk
I look forward to hearing from you
Bank of England minutes and Greece see Euro strengthen and pound fall.
This morning GBP some heavy losses across the board following the release of the Bank of England minutes. The minutes are released two weeks after the banks interest rate decision and gives indications as to future monetary policy but also how the nine members of the monetary policy committee (MPC) voted in relation to interest rates and future policy. The outcome of the minutes was to show that two of the members Adam Posen and David Miles in fact voted for an extension of the Bank’s asset purchasing programme quantitative easing (QE) by £75bn. As only £50bn was pumped into the system in February it left investors speculating as to whether the Bank will be extending QE further in the coming months and subsequently the pound fell across the board posting nearly 1% losses against both the Euro, US dollar and CHF. This has taken GBP/EUR to a two month low, and shows a trend that I personally feel may continue in the coming weeks and months.
Greek deal sees Euro rise?
The news that Greece finally looks to have secured its next bailout tranche has given investors much more confidence in the Euro and has seen the single currency climb against the pound and US dollar significantly, however the news is starting sound somewhat like a broken record and quite honestly starting to get a little tedious! Unfortunately however it is an area for anyone with a currency requirement that cannot be avoided
As I alluded to previously I do feel this will lead to some initial Euro strength in the short term, however those expecting a dramatic and sustained Euro recovery there are a number of factors preventing this from occurring in my opinion.
Firstly, European interest rates are now a lot lower than they were last year with two recent interest rate cuts – interest rate cuts make a currency less desirable and as such even if debt fears do calm I would not expect to see the Euro achieve the levels we saw in October. Secondly, whilst the bailout does buy some time, it doesn’t mean that the debt crisis has been solved and is not going to provide the economic growth that is needed by the PIIGS to actually get out of their current predicament. In fact the verdict of Fitch (the credit rating agency) is that Greece will default and it has just downgraded the country two notches to “C” on the back of the “haircuts” announced yesterday in Greece’s bailout package. This lowers the country further into “junk” status (or below investment grade) – where it has been since January 2011.
The bailout to me is just initially going to paper over the cracks and I feel it is only a matter of time before Europe finds itself very much back at the forefront of investors’ worries. To me the ‘buzz’ word for anyone with an interest in the currency market is ‘volatility’ and I am a strong believer that if you have an upcoming transfer to make do not mess with this market as it is so hard to predict!
Should you wish to discuss your transfer in more detail then please email me at mgv@currencies.co.uk
Selling Euros After Greece Deal
With the Greece deal looking like getting a full green light I would expect the Euro to strengthen a touch this morning (although much of this was expected so has been priced in to a degree), and tomorrow may be a good day for the single currency against the pound with the publication of the Bank of England Minutes (more mention of Quantitative Easing and the pound could fall). Whilst the markets are still picking through the details of the deal the one thing you can be sure of is that this will not be the last we hear on the subject of European debt sadly, so if you are selling Euros then it may be worth seeing what we can save you in the next few days- e-mail Colm at cmg@currencies.co.uk quoting ERF and a brief overview of what you are looking to do.
Can I expect to buy Euros at 1.20 again soon?
Pound to Euro exchange rates are once again below 1.20 with expectation growing that a deal over Greece will be done soon (sound familiar?)- with most market focus this week likely to be primarily on Greece. However from the UK a lot of focus will be on mortgage approvals, the Bank of England Minutes (Wednesday), and GDP data on Friday all of which could weaken the pound meaning you would likely move further away from the 1.20 mark. If the Minutes suggest more Quantitative Easing is around the corner for the UK then sterling will likely fall further, but the big data is likely to be the revised GDP figures on Friday. If these are revised up then you may see sterling rebound as the risks of recession are lessened, but if they are revised down then it would suggest things are even worse than first thought and could trigger a big drop in sterling value against the single currency.
In Europe, as previously mentioned, everything will depend on whether or not Greece can be brought to a successful conclusion. Much of the data is due out later in the week with consumer confidence and the German GDP data due out just before its UK equivalent. In all I would expect the pair to remain volatile in its current trading range, however any of the aforementioned data releases have the potential to break this range substantially. If you are looking for the Euro to weaken and to buy at 1.20 then by all means e-mail Colm at cmg@currencies.co.uk quoting ERF in the subject matter and a brief overview of how much you need to transfer or other helpful info (timescales, destination of funds etc). Likewise if you are selling Euros and want to see the pound fall, then e-mail with your contact details and I will arrange to contact you if there is a quick spike in your favour.
Greek deal on the brink? EUR/GBP back above 1.20!
Without sounding like a broken record it appears an agreement is due to be signed in Greece by Monday. We have been down this road on many occasions before but watch this space! News that Greece and its international lenders have agreed on budget cuts worth €325 million may lead to some Euro strength in today’s trading however with Wednesdays teleconference between euro zone finance ministers failing to resolve all the issues surrounding a second aid package for Athens, the decision has now been delayed until 20th February at the earliest. I still have the opinion that when the agreement is finally signed on the dotted line risk sentiment will increase and the Euro will strengthen and so to will riskier assets such as the AUD, NZD, ZAR as investors apetitie for these riskier currencies picks up. Until then however the Euro is likely to remain under pressure. For those buying Euros, particularly with sterling, I would certainly consider your position sooner rather than later. Yesterday the pound rallied back above the 1.20 mark, partly due to the Greece situation as I alluded to, but also because of a an insight following the Bank of England inflation report that should Quantitative Easing be extended again then it might be only £25bn and not the £50bn many expected. We were also to see UK consumer confidence to pick up to its highest level since August 2011, leading to a near 1 cent gain for the pound.
For those with an interest in GBP/EUR, watch out for Retail Sales figures at 09:30, they are expected to show a large contraction from Decembers figures and the 1.20 level may not be around for too long! To take advantage of rates above 1.20 or to discuss your currency transfer in more detail please email me at mgv@currencies.co.uk
GBPEUR Opportunity, Limits being filled at 1.20+ Monday Deadline looms…
The on going uncertainty in the market has caused the Euro to slip once again. This has caused limit orders at 1.20 on GBPEUR to fill. Against the US dollar we have tested the 1.30 mark, briefly breaking through.
The latest news is that the bailout decision will be finalised on Monday. We have had deadline after deadline but this appears to be a genunine deadline. As in if something is not finalised by then there could be some very serious consequences in the market.
I have personally seen a massive increase in the number of people selling their Euros because they are worried about the single currency’s future prospects. I personally think the Euro will survive but that Greece will be foreced to leave at some point this year. The status quo is clearly unsustainable and just like an elastic band, the forces are being stretched in opposite directions. They cannot go on being stretched indefinitely and just like a Greek plate being smashed, may soon snap causing all sorts of knock on effects. What exactly will happen? No one knows! But that doesn’t mean you should despair, you do have options that can protect current rates and ensure you benefit from market movements. As a specialist currency broker we can offer you a market advantage.
If you have any currency transfers to make it would be well worth speaking to us to be kept up to date with everything moving the markets and your exchange rate. We can not only help you get the very best award winning exchange rates, but further enhance your trade by making you aware of events that move the market so you trade at the right time. We have consistently topped exchange rate tables in The Sunday Times and won awards for our levels of customer service. We also always go that extra mile for anyone who contacts us via this blog!
For expert analysis and predictions please feel free to contact me directly on jmw@currencies.co.uk
What do you think about current events in Europe and the Euro? Feel free to post a comment below!
What next for the Euro?
As with most weeks there is a host of data anyone with a vested interest in the Euro, whether buying or selling, should keep a close eye on. Most will now be aware that a deal appears to have been finalised in Greece to allow the next tranche of bailout funds to be made available to prevent Greece from defaulting – this has led to some short term support for the Euro posting gains of just over 1% against the USD and GBP in the process. This week may also be key in determining the short term movements for the Euro. As my colleague mentioned below we have the Bank of England inflation report tomorrow, this will outline the potential for further Monetary easing form the UK’s and could go someway to determine investors appetite for risk. Of the pairing EUR/GBP the pound still appears to be benefiting from a degree of investor confidence when compared to the Euro (although the fact Moody’s the rating agency has moved the UK to negative from stable in terms of its AAA credit rating, the confidence in the GBP may fall a touch). Another key day will be Thursday as this time it is the turn of the European Central Bank to release their monthly report, this too should in theory confirm and conclude the second bailout for Greece and if so I would expect Euro strength against both the US dollar and pound following this release.
As with any data release no one can ever be certain of the outcome and the effect this will have on the market, the one thing I can be certain of is the continued volatility on the currency markets is likely to continue. I would expect EUR/GBP to remain around the 1.19 mark in the short term but with continued pressure on the UK economy (rising unemployment, reduced growth, the potential for more QE) I would expect to see a move below 1.19 in the next few weeks. as far as EUR/USD is concerned I too believe the Euro will strengthen as investor confidence increases and a move away from the ‘safe haven’ of the dollar is seen. I would expect a move towards 1.35.
Should you have an upcoming transfer and wish to discuss my views and the contracts we can offer then please email me at mgv@currencies.co.uk
Best rate to sell Euros
In contrast to my colleague Stephen, I actually think the next week or two will be far from quiet for the Euro! Whilst the net movement may be quite modest as seemingly all three of the pound Dollar and Euro battle to see who can post the worst economic figures, I think there will be big intra-day swings in the currency rates available. For example Tuesday morning sees UK inflation data so sterling could be vulnerable here, and even more so after the release of the UK unemployment figures released on Wednesday as I expect unemployment to rise- quite how much by will determine how weak the pound gets. The same morning sees the release of the Eurozone GDP and I think this is the perfect market to utilize stop loss and limit orders given the volatility. For example if you are looking to sell Euros for 1.19 or below you could set a limit at the point to try and squeeze a bit more out of the market, but at the same time you may place a stop loss just over 1.20 to make sure if the EU GDP is particularly scary you don’t miss out by too much and protects you from a major fall in exchange rate.
Towards the end of the week we have UK retail sales figures and there is a raft of major US data out all week including US CPI data, all of which in my view is likely to have a major impact on respective currency rates against the single currency. As such if you are looking to buy or sell Euros against any major currency then this week is likely to be very important. Should you have a requirement and want to get the best exchange rate then please feel free to contact Colm at cmg@currencies.co.uk quoting ERF as the heading. If you provide a brief overview of what you need, I will obviously do my best to help with an idea of the best rates and contract types to suit your exact requirements.
Greek austerity package finally approved
Greek MP’s approved a controversial package of austerity measures over the weekend in return for a €130bn bailout from the euro zone and the IMF.
The vote, which was carried by 199 votes to 74, went through at the same time as tens of thousands of protesters caused havoc across Athens and led to 6 members of the Greek parliament resigning. As part of the measures there will be 15,000 public-sector job cuts and the minimum wage will be reduced from €751 a month to €600.
While this agreement failed to have the immediate exchange rate impact that many would have anticipated I would expect to see the Euro gradually benefiting from a period of quiet consolidation.
The next couple of weeks should be fairly quiet across Europe with very little data of note coming out with the exception of EU GDP data out this Thursday which is expected to show a contraction of -0.4% (slightly worse than the UK’s figure a couple of weeks ago) – this may lead to some Euro weakness towards the end of the week.
For those of you currently holding Euros and are looking to move them into either Sterling or US Dollars then the first half of the week could be the opportune time for you whereas those of you looking to buy Euros may want to consider waiting until Thursday afternoon or possible Friday.
If you want to speak with me directly about your specific currency requirements or just have a comment or questions about exchange rates feel free to contact me directly at sah@currencies.co.uk.
Is the Euro overvalued?
Despite nearly two years in the centre of one of the worlds worst ever debt problems the Euro currency continues to remain relatively strong and stable. Against sterling and the US dollar it has weakened quite a bit lately but not quite as much as perhaps some would expect, especially when you consider the problems and challenges ahead.
Whilst the ECB, the IMF and the Greek leaders scramble around to present a front of unity and solidarity to the markets it is impossible to overlook the fundamentals. That is that the Greek economy is shrinking and there is surely no way they are ever going to be in a position to pay back their debts. We predicted here years ago that unless the PIGS nations sorted out their finances there would be major trouble up ahead.
The Euro has clawed back some gains against the pound and dollar on these hopes but it is just one milestone on an exceptionally long journey. When Greece was first bailed out attention soon turned to Portugal, so will this happen again? Everytime there is an event Europe that unsettles the markets there is major pressure on those responsible to do something and all credit due, a plan however unconvincing and short term is reached. This is one of the many reasons the Euro holds value but will this confidence always be there?
Against the pound the Euro has been very range bound touching its strongest levels this week at just under 1.19. Now QE has been agreed for the UK and the markets are calmer following the Greek situation, are we going to see the Euro make any further gains? Next week we have UK Unemployment figures and more importantly Eurozone GDP data. I think the Eurozone is going to come under much more pressure in the coming weeks and months but whether this will translate into dramatic movements on the rate remains to be seen.
The Euro is the second most transacted currency globally after the Dollar. That may sound obvious but it is well worth remembering as one reason why there is confidence. The markets have faith in the currency as a whole and contrary to some of the unfavourable US and UK media most do not expect a eurozone ‘collapse’. In the same way that despite the fact the UK and the US have torrid debt problems, no one expects either currency to collapse. The Eurozone is of course a different case but I make an important point. The Euro will continue to be put under pressure as we continue to fail to see any clear route out of the debt problems but that may not necessarily translate into Euro weakness of any severity. Considering the Bank of England has now pumped £325bn into the UK economy and the Fed expects to keep rates on hold until 2014, even if the Euro comes under further pressures, I don’t think either of these currencies will be in a position to capitalise anytime soon.
For a chat with a specialist about all of the ins and outs of your currency transfers please feel free to get in touch on jmw@currencies.co.uk
