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Euro update – when to buy in the market in the near future (Steve Eakins)
Euro exchange rates have been driven by political events over the last week as economic data was light. The Currency Market is traditionally driven by four topics; political events, acts of god, acts of terror and economical events. These are normally referred to as the currency compass. Economic data releases are the most forecastle as each economy will release nearly 30 reports throughout the month on their performance and the market will have an expectation for each. Due to the amount of data we here grade each from 1 to 3 depending on the power and influence it traditionally has on the currency markets. For example the amount of cars imported in fairly minimal however an interest rate decision is a very powerful. These economic data releases are normally for the previous month and are so released towards the beginning of the month.
As today is the 1st of March these data releases are expected to come in fast, over the next 3 days we have 13 reports from the UK, 20 from the US and 13 from the EU. These range from GDP figures to unemployment indications and as a result being well up to date on these releases, their forecasted results and real figures are KEY to timing your trade and maximizing your trade. Here we provide a pro-active service offering exactly that, helping you make the most out of the currency market.
My view on the next 3 trading sessions:
GBPEUR rates to fall but for a spike this morning.
GBPUSD rates to stay steady and fall on Wednesday.
Each and every one of these releases could create an opportunity and help you achieve your target exchange rate. Talk to us about a limit order to learn more about the tools and systems available to assist you to buy the exchange rate at its peak.
Call on the normal number or via email at hse@currencies.co.uk for a friendly chat from either myself; Steve Eakins, Daniel, Jonny, Tom or Mike. All regular bloggers on this site.
GBPEUR rates continue to rally; AAA credit rating & Italian elections (Steve Eakins)
Over the last 24 hours GBPEUR rates have moved by over 4 cents! This is down to the news released on the market of both the downgrade of the UK’s credit rating and the first look at the vote which took place over the weekend in Italy. The difference between the two stories however is that one is a report on the history of an economy and the other is about the future. What is happening in Italy is the main story and one with which everyone with a currency transfer to make should be watching. Currently the government is split between a communist, a comedian and a playboy. Only in Italy, but it can have a large impact on the future of Italy, the third largest economy in the Eurozone and the third largest bond market globally. It has the potential to create uncertainty across the globe.
A famous saying in the currency market is: “Uncertainty is worse than war and famine.”
This is where we are currently and any news from Italy could change the price of the euro very quickly. Register your interest for updates on this story by emailing hse@currencies.co.uk
Other topics to watch out for are:
- UK GDP figures tomorrow – Key for anyone with any Sterling exposure.
- End of month profit taking – As stock markets have moved up a lot through February I expect to see some “re-balancing” – This potentially could result in some sterling gains.
If you would like to discuss how these stories could affect your situation feel free to make contact. We have been helping people here for over 12 years with their currency transfer and simply put, if we could not save you money we would not be in business. Contact us today on the normal number or via email at hse@currencies.co.uk
UK Economy shrinks – Sterling weakness
News ending the week is the confirmation that the UK economy has shrank further than expected. The negative view on the economy has a direct effect on the strength of sterling and resulted in most currency pairs falling when buying with GBP. Most readers of this blog seem to be EURO buyers, EURO Sellers, Dollar Buyers and Dollar Sellers. So they are the areas I will focus on today. If, however you are looking at any other pair please feel free to email me with your situation and I will see if I can help. My email address is hse@currencies.co.uk (We trade in excess of 30 different currencies and any combination between them so we should be able to help.)
Euro focus – when to trade the euro?
As mentioned in my last blog the Eurozone is waking from its August holiday and focus has quickly returned to Greece and its future in Europe. They are in the process of asking for an extension in their debt repayment of 2 years which they say they will need to stay in the Euro. Citibank now estimates that there is a 90% chance that they will be out before Christmas. So anyone with interest in the Euro should watch this story closely. In other news, watch out for the political views of France in the near future. I would not be surprised if they join Italy and Spain and ask for changes to their debt repayment from Germany in the near future. Also it is election year in Germany – so safe to say there is a lot to keep an eye out for.
If you are buying euros I would probably try and wait for early next month’s data sets, if I was a seller however I would want to move out of Euros quickly. (You can even do this through a FORWARD Contract if you don’t have access to the full euros you are looking at selling.
USD date – the driving force of the dollar
This week cable prices, (GBPUSD) has moved up by over a 2%, making a difference of over $6,000 on a £100,000 trade. The main reason for this is that recent data from the US which is continuing to show an improving picture of its economy. The US is still seen as a world barometer and most traders see a direct correlation between its profit and that of global growth . As a result it is keenly linked with trader’s appetite for risk, so as the US economy gets better, more money is moved from the dollar into risker currencies. It has been due to this additional dollar sell off that has created a near 3 month high.
On Tuesday we have more data that I would not be surprised to see continue this run of strength for USD buyers. Consumer Confidence is released at 15:00 BST and are currently forecasted to improve to.
Anyone looking to buy dollars may however want to buy before the release taking advantage of this expectation. Purely because it is misses these forecasts recent gains could to be lost quickly, 1.55 maybe.
Making forecasts and helping people save money is what we do here all day. Helping people with any exposure to make sure they are both maximising the timing plus getting the best price. Simply put we would not be in business if we could not help. So if you would like to check you are getting the best price and have found our site useful, get in contact.
If you are getting in contact over the weekend – please remember that the UK is closed for a bank holiday on Monday, so expect our call on Tuesday.
Email me directly at hse@currencies.co.uk for a friendly, professional, service that will save you money.
Europe wakes from its August hibernation- When to buy?
Even though euro news has been out of the media recently due to the August holiday break and the Olympics, everyone with a currency requirement should be aware of it pending return. Moody’s the rating agency warned this week that it will take many more years to complete the fiscal adjustment program and structural reforms. They went on to warn that the task of sorting out the Eurozone crises is at best only halfway through. Read more here.
The first installment of news started yesterday as the Greek prime minister Antonis Samaras pleaded for more time to pay back debt. He said that the Greeks economy is “bleeding” and needs a little “air to breath,” this was at the start of several days of key meetings. Any extension will need to be signed off by Germany who has been against any form of extension, (a 2 year extension is expected to cost a further €20 billion to finance.)
This story will be key for anyone with a GBPEUR trade over the next 7 days; I would not be surprised to see GBPEUR swing upwards of 2% making a difference of €2,400 for every £100,000 exchanged. If you need to complete a trade within this time please contact the trading desk for times and days on when to potentially complete your exchange.
If you are looking for the best exchange rate and to buy at the high, please register your interest by email hse@currencies.co.uk
Making forecasts and helping people achieve the best exchange rate is what we do. If you have found this blog useful all I would ask is try us out.
At the end of the day if we could not help we would not be in business and all you may lose is 3 minutes on the phone.
Thank you,
Steve Eakins
GBP EUR – Should you strike before interest rate decisions? Pound Euro Forecast
It has been widely published in the press and over these blogs that tomorrow is a key day for anyone with a currency transfer to make. This was also mentioned in the blog I posted on Monday. Tomorrow we have news from both the Bank of England and the Bank of Europe and the anticipation is for a busy day with a change expected in both camps. Both are expected to lower their interest rates which normally results in weakness for that currency. Plus the bank of England is also expected to extend its QE program by another £50 billion. So what do you do if you need to move currency?
GBPEUR traders – I would suggest either lock in some or all your exchange before the release because the favourite is for sterling weakness.
EURGBP traders – In this situation I would hold but be ready to move quickly – set realistic targets and stick to them in tomorrow’s market.
GBPUSD – Again due to sterling weakness I would suggest moving beforehand, or at least limiting your exposure by doing some of the transfer you need to do.
USDGBP – Again watch and hold – I would be surprised to see you worse off tomorrow afternoon compared to the morning session.
EURUSD – This is a more difficult pairing to predict and will be dependant by how much the interest rates are cut in Europe.
If you are in the position needing to trade either this week or next review your situation with an expert. You can contact us here using the number to the right or feel free to email me directly for a more personal service in your instance. My email address is HSE@Currencies.co.uk
Currency rates summary – Stories this week
The Spanish banking plaster, rather than solution, has now been officially requested by the Spanish banks resulting in widespread losses across Europe. Bank shares led the stock markets as they fell dramatically along with the Single Currency that fell nearly a cent against Sterling in trading today. The real question still stands which is what is coming out of Europe this week. There are a number of big economic releases as well as political expected. This ranges from a Cypriot bailout, banking unity, the creation of project euro bonds and how to continue to provide the drip feed to the Spanish and Italian economy. It is these stories that will drive markets this week, overall I expect a tough week for the Pound and I would be surprised if we end the week with rates against both the Euro and Dollar as high as they are now. This could be as large as 3% so GBPEUR under 1.21 and GBPUSD under 1.53.
In the short term I personally expect GBPEUR to start to fall early tomorrow (Tuesday,) with the release on UK public net borrowing figures. This is due to a large expectasion that UK borrowing figures went up, meaning the UK owes more.
The best way to keep up to date with all this economic information is to visit our blog page every day or contact me directly on hse@currencies.co.uk or by calling me on 01494 787 478 I look forward to hearing from you
This week’s Sterling summary and predictions for GBPEUR next week
Last night the Credit rating agency moody downgraded 15 banks across Europe. This was widely expected in the UK following the QE announcement last week however some of the European banks was a surprise. As a result the euro weakened making it cheaper to buy with your pounds. The reason behind this is that like you and I banks have a credit score that determine how expensive it will be to borrow. As this has deteriorated those banks will have more costs to run at the same level and as a result weaken.
News from Europe over the last 24 hours includes a full estimate of how much the Spanish banks will need to weather a serious downturn of the economy and the losses in their books. The amount was upwards to €62 billion! This news also improved the costs of borrowing for key members on the bond markets. Spain’s 10-year government bond yield fell back under the 7% to 6.93% and the equivalent Italian bonds fell to 5.77%. (A rate above 7% is considered to be unsustainable, however these levels are still too high)
The other main topic in the Eurozone this week was Greece and worries subsided following the elections that took place on Sunday. Antonis Samaras has now formed a Government but the former economist will get little opportunity to savour the victory, he now has the task of pulling Greece out of a five-year recession and renegotiating a bailout deal with unwilling creditors across Europe. This is a task that will almost certainly affect exchange rates in the coming weeks. When reviewing the situation I’m sure winning the election will be seen as the easy bit.
Summary for next week
If you are in the position needing to buy euros at the moment I personally expect rates this time next week to either be slightly better or a lot worse. Why do I think this?
Well we have to remember that it is in the Europeans interest to resolve the crisis and significant steps have been made forward this week to get there. I would not be surprised to see the banks across Europe become more integrated this next week and a solution coming the week after at the beginning of July. Either way I am 100% convinced that GBPEUR rates will continue to move over 1% a day, equating to thousands of pounds of difference on the cost of a property, service or product. If you want to maximise your trade you need to know when data is expected to be released, as this allows you to make the educated decision when trying to forecast the peak of the week. This is information a currency broker can provide. If you want more information feel free to contact us directly or keep reading our blogs. We aim to update you all twice a day with breaking news and predictions for the days ahead.
Either way if you are trading in the next week a wish you the best of luck!
Have a good weekend and watch out for Germany vrs Greece this evening in the Euro 2012 competition. It should be interesting to see what happens when the fans mix….
US Shocking downgrade + Euro bond buying – “FX market’s day of reckoning”
After the unsurprising downgrade of the US investors and the confirmation that European bonds will be purchased by the ECB investors are again trying to judge where the losses will be seen. On the US news markets have already lost out as the cable (GBPUSD) moves up over a cent over the weekend. Sterling seems to already started on a loss as the euro plan to buy bonds adds some confidence to the euro.
Many investors have been calling for such a move from the ECB with requests for a European Bond. This story will continue to be speculated on as the wide sell off continues today on the markets. Also watch out for the NZD/AUD/ZAR as all have large gains due to the closing of Carry Trades. A Carr trade is a tool used by a number of financial institutes, they borrow money in a low yielding currency in invest in a high to take the benefit on the difference of the exchange rate. For example borrow in the UK for 1% and invest in South Africa with a 8% return. The only issue is as the market are wary of risk these positions are being closed and brought back.
For more information on the markets stories and how it could affect you contact me through HSE@Currencies.co.uk
