Euro Rate Forecast

Currency experts forecast on the Euro

Theresa May fails to reassure the markets (Daniel Johnson)

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PM does little to help the Pound

Again a lack of unity and  a failure to compromise holds back Sterling. If there is one thing the market reacts badly to it is uncertainty, it is even sometimes the case that bad news is better than no news. It seems hopes of a soft Brexit have been dashed and we are no closer to getting a deal in place.

There was the hope that Theresa May would be able to provide some form of clarity on Brexit negotiations and that progress had been made. It still seems she wishes to cherry pick aspects of the deal which will not make Brussels happy.

Cabinet members seemed more concerned with their own political agendas rather than trying to get a deal in place.

I am of the opinion Sterling is chronically undervalued, but the pound does not have much chance of a significant rally without clarity on Brexit. GBP/EUR remains range bound between 1.11-1.15. If you are buying Euros short to medium term get something booked if GBP/EUR hits the low 1.14s, too high expectations could prove costly.

A limit order maybe the best opportunity to maximise your return. Set the target rate of exchange and should it become available 24hrs a day your currency will be purchased at a level you are happy with

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Daniel Johnson

Will the Italian Election create Euro weakness? (Daniel Johnson)

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Italian Political uncertainty could weaken the Euro

There has been little reaction to the upcoming Italian elections in the markets at present. Polls suggest there will not be an outright victor, the likelihood is that a coalition will have to be formed. The coalition formed will influence the value of the Euro. With several parties involved it will be difficult to push through any breaking legislation, if this is the case this may stop any significant Euro weakness.

The most probable outcome is a centre right coalition which includes Forza Italia, former Prime Minister Silvio Berlusconi’s party. Despite being banned from office his influence and support will definitely assist in his party gaining some form of power.

Other parties involved  are far-right and anti EU, some are anti-globalisation and  anti-immigrant particularly the Brothers of Italy and the Northern League.

Political uncertainty historically weakens the currency in question, but I think the coalition will prevent a move for a referendum to leave the EU which would be the biggest threat to the Euro. If you are a Euro buyer I would not necessarily hang on for this event to create an opportunity.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take  a couple of minuites and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company  trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

Daniel Johnson

Inflation data could influence ECB Monetary Policy Change (Daniel Johnson)

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CPI data key to ECB Monetary Policy

The Eurozone has been performing exceptionally well of late with some of the best growth figures in over a decade. Unemployment is also very impressive at very low levels. Investors are waiting with bated breath to see if there is a change in either interest rate levels or Quantitative Easing (QE). QE is essentially pumping money into an economy in order to stimulate growth. It is far from a proven method, it is very hit or miss, but in the Eurozone’s case it can be argued the measures have worked. Last year the European Central Bank (ECB) cut monthly increments from €60bn to €30bn which caused substantial Euro strength. If there were to be a further cut the Euro could again strengthen considerably.

The one thing holding back a potential change in monetary policy is inflation. Inflation has been an ongoing problem within the Eurozone for a long period. It is a problem that is not easily solved. Especially considering the strength of the Euro at present hindering exports. The Federal Reserve are also making matters worse by some Fed members stating they are unconcerned with the weak value of the USD causing investors to choose the Euro over the Dollar.

That is why today’s inflation data release at 13.30 has the power to influence the markets. Expectations are for a significant fall, however if they are incorrect and the data is not as bad as expected we could see Euro strength. If you have a trade involving the Euro be sure to keep a keen eye on this data release.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.

Daniel Johnson

German Grand Coalition bodes well for the Euro (Daniel Johnson)

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Merkel makes compromises to get Coalition in Place

The Euro has seen gains against the majority of major currencies of late due to positive economic data and the news that a coalition is to be formed in Germany. Political uncertainty historically weakens  the currency in question so the coalition in Germany has been a catalyst for Euro strength. Germany is the engine room of the EU so this has caused extra impetuous.

Yesterday it was agreed that the current German Chancellor, Angela Merkel’s Conservatives agreed to a number of compromises in order to put the Grand Coalition back in place with the Social Democrats. The most significant concession being the finance ministry being handed to the Social Democrats  putting an end to forced austerity to Germany’s Euro Zone policy.

This means there could be more plans for expansion with intentions of investment into a European monetary fund beginning to intensify. Its purpose would be to create added incentives to those willing to invest in the bloc. Depending on the rewards offered and it’s popularity it could create substantial Euro strength. This would be gradual gains however and not an immediate spike.

Inflation levels key to a change in Monetary Policy 

Quantitative Easing (QE) is pumping money into an economy in order to stimulate growth. The current QE program seems to be having the desired effect in the Euro Zone with a host of positive data releases.

There is currently €30bn going in every month, down from €60bn previously. With a strong economy there is less need for QE and reductions in QE can mean significant strengthening for the Euro. Inflation is struggling at present and Draghi has indicated that QE will continue until we see inflation heading towards it’s 2% target. CPI is the key measure of inflation so keep a close eye on this release as this could be the clue to a drop in QE.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Thank you for reading.

Daniel Johnson

Eurozone grows at fastest pace for a decade in 2017 (Daniel Johnson)

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Could we see further cuts in QE?

Figures published recently show the Eurozone grew at the fastest pace in over a decade during 2017 despite  figures coming slightly lower than expectations for Q4. This could be used as justification that the Quantitative Easing (QE) program is working. QE is effectively pumping money into an economy in order to stimulate growth. It’s viability has been questioned in the past in other areas.

Monthly increments were cut last year from €60bn to €30bn which shows confidence in the economy. Further cuts would no doubt cause substantial Euro strength. Mario Draghi, the European Central Bank (ECB) President has stated QE may have to continue longer than the current target which shows a slight lack of confidence and indicating another cut in monthly increments could be some way off.

The Eurozone economy is looking strong at present and we could see it continue to prosper during 2018. There are causes for concern however, The Italian election is due to commence in March and there has been an emergence in right wing parties such as CasaPound. If  a party such as CasaPound were to gain power their strong stance on immigration could lead to a referendum which would no doubt lead to a large drop in Euro value.

It is also worth keeping an eye on the situation in Catalonian. With many Catlalonians wishing for independence and control up in the air it is very difficult to predict the outcome. Uncertainty is worse than bad news in the currency market so keep an on this matter if you have a trade involving the Euro.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

Daniel Johnson

Strength of the Euro not a concern for Draghi (Daniel Johnson)

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Draghi speech causes Euro strength

Yesterday saw Mario Draghi the head of the European Central Bank (ECB) speak yesterday at the latest ECB press conference. There are worries that the Euro is too strong which could hinder exports , but Draghi stated that it was not a cause for concern and was positive about the Eurozone economic situation as a whole. The Euro currently sits at the best levels against the US Dollar since 2014.

He also mentioned inflation, which has been a problem in the past for the Eurozone. He said that recent economic data shows consistent growth in the bloc and feels that inflation will head towards its 2% target without the need for a change in monetary policy. Draghi also mentioned that there was the possibility that Quantitative Easing (QE) could be elongated. QE is pumping money into an economy in order to stimulate growth. QE was reduced from €60bn monthly increments to €30bn last year and Draghi’s statement that QE could continue longer than it’s current target for completion shows a slight lack of confidence in the economy and was probably a factor in the Euro not strengthening further against the major pairs.

There are concerns for the Euro however, We have Italian elections due in March where  far right parties  are gaining popularity , such as the Casa Pound. If a party such as Casa Pound gained power there is the potential for a referendum due to their strong views on immigration. This has the potential to substantially weaken the Euro. There is also the ongoing situation of Catalonian independence which also could cause potential Euro weakness should Catalonia leaving mainland Spain become more apparent.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at dcj@currencies.co.uk.

Daniel Johnson

1.1357 Monthly High on GBP/EUR (Daniel Johnson)

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Be wary of thinking gains will continue for the Pound

We saw Sterling rally against the Euro to a monthly high of 1.1357 yesterday. I think the main catalyst for this spike is news that the Spanish and Dutch finance minsters are willing to get a trade deal in place with the UK. The spike may be short lived however, phase two of Brexit talks  are set to be problematic. The UK and Brussels are at loggerheads before talks even begin. Michel Barnier, European Chief Negotiator for Brexit has insisted he wants UK financial services included in a deal. This is something Chief UK Brexit negotiator, David Davis has said will not happen.

Davis has said he will not allow Brussels to cherry pick terms of the deal. He has also accused EU services of advising UK businesses to relocate to the EU or risk losing their contracts. Trade is one of the most important aspects of the whole Brexit process and as talks progress expect high volatility on the GBP/EUR. A target to have a deal in place has been set for October, I think this target is very optimistic. Davis’ predecessor resigned stating the Brexit process could take up to a decade and a 2019 target for a full exit was very unrealistic.

I think current GBP/EUR levels may not last long. If we look at when the Irish border deal was agreed we saw a very brief window of opportunity when it hit 1.15. GBP/EUR quickly fell following news the deal was not legally binding.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.

Daniel Johnson

German Coaliton talks could mean volatility on the exchange (Daniel Johnson)

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Could we see Euro weakness due to problematic collation talks? 

Angela Merkel is due to meet Social Democrat Party (SPD) leader Martin Schulz for a second day of exploratory talks on Monday. This will be done in an attempt to end current political deadlock and secure another term as Chancellor. EU  policy is set to be discussed and negotiations are not set to be straight forward.

The SPD would like a future Berlin government to be similar to French president, Emmanuel Macron back the implementation of a Eurozone budget and finance minster. This is however controversial and could create problems.

The negotiations opened again yesterday more than three months after Merkel failed to form the so called Jamaica coalition between there CDU/CSU, the Free democrats and the Green Party. It has been a long period of political uncertainty and there has been calls for Merkel to step down. Her position in her party has weakened considerably following their worst defeat since 1949.

If the talks fail, Merkel has only two options, either a minority government or new elections. she has ruled out the first option and has said she would run again for chancellor which would create an even longer term of uncertainty.

If the coalition talks do prove to be problematic this could cause euro weakness and  it could be a small window of opportunity for Euro buyers.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

 

Daniel Johnson

German Political uncertainty set to cause volatility (Daniel Johnson)

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Merkel desperately tries to form  alliances

There are rumours circulating that Angela Merkel could be replaced by Germany’s defence minister, Ursula Von Der Leyen. Germany is losing faith in Merkel’s ability to form a coalition.
Merkel failed to build a coalition following her narrow victory in the election in September. She was attempting to unite her Christian Democratic Union (CDU) party, the Free Democratic Party (FDP) and the Greens, which was dubbed the “Jamaica alliance”.

Merkel is currently trying desperately to from a government with the Social Democratic Party (SDP). The electorate is losing faith, some of the latest polls have shown that 46% wish her to step down immediately.

Political uncertainty historically weakens the currency in question, but with Ursula Von Der Leyen potentially gaining power this does not bode well for Sterling.
Von Der Leyen is a firm believer in a in a federalised United States of Europe, she grew up in Brussels and is the daughter of Ernst Albrecht, former director general of the European Commission.
There is also the possibility she will attempt to strengthen the alliance with French President Emmanuel Macron as Von Der Leyen shares his views on reforms to integrate the Eurozone.
This is definitely not good news for the Brexit process and could make matters even more problematic.

Eurozone CPI Data could bring a change in monetary policy a step closer

Consumer Price Index (CPI) is a measure of inflation with a region and is key to the health of an economy. We have seen positive data out of the Eurozone of late and there is talk a change in monetary policy could be on the cards an increase in inflation could bring that change a step closer. There is expected to be a slight drop, but I am going to go and go against the grain on this one as I believe there is the possibility of an increase.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Daniel Johnson

Italy and Catalonia could leave the EU (Daniel Johnson)

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Separatists regain power in Catalonia

Going against hhe polls, separatists regained power on Friday in the regional elections which could cause a confrontation with Madrid. The vote last week was a repeat vote of the October referendum which caused Euro weakness following a backlash from the Spanish government. The turnout for this vote was substantially higher than the October vote which does give this vote more credibility. 81.95% of the region voted and the separatists came out on top claiming seventy of the one-hundred-and-thirty-five seats available. King Felipe addressed the nation during his Christmas speech appealing for coexistence rather than confrontation. There has been violence attributed to the situation. This situation does have the potential to weaken the Euro.

Italian Election has the potential to weaken the Euro

One of the main concerns for Brussels is the Italian General Election. The anti-establishment political party, Five Star have a realistic chance of winning. If they do win a majority  it is likely it could lead to a referendum with the potential of Italy leaving the EU. If Italy were to leave this could create a domino effect where other regions leave the EU. This has the potential to substantially weaken the Euro and should be taken seriously if you are a Euro seller.

Brexit Negotiations to dictate GBP/EUR

Brexit Negotiations will dictate GBP/EUR buoyancy levels for the foreseeable future so it is vital to keep an eye on events should you wish to maximise your return. I would expect GBP/EUR levels to remain flat over the holiday period before we return to normality on 2nd January.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Daniel Johnson) on dcj@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

 

Daniel Johnson

Catalonian Regional Elections threatens the Euro (Daniel Johnson)

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Could Catalonian independence make other regions follow suit?

Regional  elections in Spain begin on tomorrow and they are a cause for worry for Brussels. The election is expected to be close between anti and pro independence parties. It would be surprising if any of the seven parties involved in the election were to win majority victory. Historically, political uncertainty weakens the currency in question, so a close fort race in the election has the possibility to create euro weakness.
Catalans have a difficult decision to make. Their decision  to stick   with a unstable separatist coalition whose leaders have been placed in jail or who have fled the country, or take a gamble on alternative parties that fall in line with  Spanish Prime Minister, Mariano Rajoy’s wishes for a unified Spain.

Some polls suggest a lead for Catalonian secessionists who have used a recent tight victory in the last regional parliament to declare independence and cause a clash over sovereignty that have caused worry far beyond Spanish borders. The result could have been warped however as only half the electorate voted.

Catalonia makes up a large section of GDP in Spain, but the real threat is that other areas in the EU follow suit if independence for Catalonia occurs. The possibility of a  domino effect has the potential to cause substantial Euro weakness.

If you are selling euros it may be wise to take advantage of current levels to avoid the risk of a fall in value on Thursday and Friday.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at dcj@currencies.co.uk.

 

Daniel Johnson

Positive Eurozone data bodes well for the Euro (Daniel Johnson)

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Industrial Production Data bodes well for the Euro

The majority of Eurozone data has been positive of late and the trend continued with yesterday’s Industrial Production data. There was a significant increase which bodes well for the Euro. This usually would have a bigger impact on GBP/EUR, but Brexit negotiations are currently the key driver for the pair.
If these positive data release continue this could influence the European Central Bank (ECB) to change monetary policy. Things are looking healthy for the Euro as we are about to enter 2018.
It is still worth keeping an eye on potential problems for the Euro. Catalonian independence does have potential to cause the Euro to slide if a separation from main land Spain does become more apparent. Greek debt although now slightly more manageable is not something that should be swept under the carpet. Although, I think a break away from the EU and a debt write off is unlikely. After all the International Monetary Funds (IMF) want their money back.
Eurozone Services PMI and ECB Interest Rate Decision due today

Eurozone Services Purchase Manager Index (PMI) is due out this morning. This gives an idea of the health of the services sector in this region and makes up a substantial amount of Eurozone GDP. There is expected to be a small contraction, but I am going to go against the grain due to recent positive data and predict there could be a small gain which could prove beneficial for the Euro.

The European Central Bank (ECB) interest rate decision takes place later today. I do not expect any change, but keep an eye on the monetary policy statement and press conference following the decision as if there is a hint to change in monetary policy this could influence the markets.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at dcj@currencies.co.uk.

Daniel Johnson