Exchange rates for Euro sterling are looking to break below the 1.19 mark which could be significant for the currency pair and signal more losses for the pound if Greece can get sign off on its next bailout and UK unemployment is weak next week. The move for the Euro came as the ECB left rates on hold as expected, and the Bank of England injected another whopping £50bn of funds into the Quantitative Easing Program- a clear sign the UK economy is in trouble. The next couple of weeks are going to be key as we find out whether the UK economy is continuing to deteriorate , and if Greece finally gets it’s house in order (either themselves, or imposed from other European states). If you are buying or selling euros let us know what you need to do and what rates you would like to achieve in the near term and we will see what we can do to help- email Colm at email@example.com and quote ERF in the subject matter. We have UK Producer Price Inflation out in the next couple of minutes so let’s see what that does to sterling euro rates!
If you are buying or selling Euros from a GBP base then today could be key as we see the Bank of England and ECB interest rate decisions. In the UK we will be waiting to see whether or not at 12.00 the Bank of England extend the Quantitative Easing program ( a move that is aimed at avoiding recession, or at least lessening the impact of it). All 9 members voted against QE last month however since then we had the GDP figures for the last quarter showing a 0.2% drop, and inflation (whilst still very high) has come down sharply from 4.8% to 4.2%- given all this QE is a real possibility. The pound began to drop sharply against the Euro in readiness for this decision (and the more optimistic news over a debt deal in Greece).
On the other hand we have the ECB decision due at 12.45 and whilst the expectation is for them to hold interest rates at 1% there is an outside chance of a cut- a move which could weaken the Euro substantially and counter some of its recent gains against the pound. Whilst the odds of a rate cut seem small, the press conference afterwards will give more insight into what policy may be going forward, and possibly some insight into when the debt crisis may pass (again don’t expect any overly obvious bad news as Draghi will choose his words carefully) by reading between the lines of what the head of the ECB says.
If you haven’t used a currency broker before, or are just looking to get a better price than your existing broker, please feel free to e-mail Colm at firstname.lastname@example.org with an overview of your requirement quoting ERF in the subject matter. I would be more than happy to explain how our services work and what the cost savings would be.
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Unfortunately for clients with Euros looking to move to Australia the RBA did not cut interest rates as had been expected and the Aussie remains very strong as a result. Chinese data later this week will show if demand for Aussie raw materials will continue but given global confidence is up on the back of strong jobs data in the US the Aussie should be pretty robust in the short term. Unfortunately Greece’s inability/refusal to get the private creditor agreement in place is leaving the Euro hamstrung and the longer it runs the less confidence investors have in the Euro- it seems clear something will need to be done before Greece risks default in March, but at the moment the horse trading and brinkmanship between the various parties looks set to continue.
This has also been one that has kept GBP EUR rates fairly rangebound over the last week or two. I expect a deal to be done over Greece but the timing keeps throwing things off and as a result sterling has retained its gains against the single currency. The interest rate decisions on Thursday will be one to watch with a very outside chance of a rate cut in Europe that could provide Euro weakness, and in my view an even more remote chance that the Bank of England will extend the Quantitative Easing program (all 9 members voted to keep it at current levels last month).
If you do have a currency transfer requirement then by all means feel free to contact Colm at email@example.com quoting ERF in the subject matter and a quick explanation of your requirement- I would be happy to explain how our services work and go through some figures showing what we could save you on your transfer.
A stronger than expected Services PMI* this morning has boosted the Euro against both the pound and dollar although I feel the Greek debt talks are the big one to watch out for. The deadline keeps being pushed back and we are no closer to agreement as I hear. Whilst agreement does not need to be reached for a few more weeks, this lack of unity and uncertainty is not really very encouraging!
Even if a deal is struck it is just one small step on a long road to sorting out not only Greek finances but also Eurozone finances. Many years into this crisis and the fundamental problems remain! Greece is not growing. Greece is still getting in debt. Greece is not in any better position to pay its debts, infact the situation is getting worse. And Greece is the template for the rest of the Eurozone and how it responds to countries in trouble.
Another week goes by and we are no closer to any real solutions. I expect Greece will be forced to leave the Euro at some point this year, I cannot see how they will ever repay their debts without further bailouts. It will take many years for their economy to become competitive and start to ‘trade’ it’s way out of trouble. Will Germany and the ECB allow this? If they do it will be extremely unpopular politically and could cause a move to right of centre political parties gaining support. This has already happened in Finland with the right of centre ‘True Finns’ gaining public support because of their absolute opposition to further EU bailouts.
If you are buying or selling Euros to buy a currency we are in some very uncertain times because of what is happening in Greece. We are seeing quite volatile movements and things really could go either way quite quickly on Euro rates because of this. If you have a transfer to make and don’t want to get caught out if things take a turn for the worse, please feel free to get in touch on firstname.lastname@example.org
I will be happy to explain all the options you have and if necessary keep you up to date on the events that are moving the market. I look forward to hearing from you.
*PMI incidentally is Purchasing Managers Index, it is a snapshot of Purchasing Managers attitudes to their business and provides one of the most up to date sources of information on how that particular area of an economy is faring. Watched closely by investors it often has the propensity to move the market one way or the other.
For those with an upcoming Euro transfer, whether buying or selling, I’m sure will be looking at the market movements and scratching their heads wondering what will happen next? Quite honestly I do not feel anyone can confidently predict movements for this pair. For me I still have the opinion that an agreement will be made in Europe and all measures used to avoid the breakup of the Eurozone. Interestingly a statement for the Institute of Fiscal Studies has urged the UK government to consider a £20bn fiscal stimulus in the event of a Euro zone breakup, saying a possibly plan B should be outlined in the budget. It warned that “a eurozone crisis would see the UK back into deep recession”, with the economy contracting in both 2012 and 2013.
This highlights the potential cost to the UK should the Eurozone dispand, and although you would think a break up of the Euro will cause a fall in the Euro’s value, infact the long term costs to the UK should this scenario occur could be so severe we may actually see the value of Sterling weaken as a result, this is why to me this pair is so hard to predict, however I will outline my thoughts.
Yesterday Belgium fell into recession in the second half of last year. According to the National Bank of Belgium Q4 GDP fell 0.2%, following a 0.1% decline in Q3, this has possibly compounded yesterday’s Euro losses and we have seen GBP/EUR creep back above 1.20. Each time the market has crept above 1.20 in the past few weeks it has quickly fallen back towards 1.19, I feel short term we may head towards 1.21, but would expect to be back towards 1.19 and further as I feel an agreement in Europe will be made and confidence heads back to the market. I also feel a continuation of poor data from the UK will take its toll on the pound and see a move towards 1.15 as possible.
What about EUR/USD?
For this pair I feel investor confidence is the real key. I believe the Euro zone will not break up and although the possibility of Greece defaulting is high, an agreement will be made to keep each country within the Euro. The ongoing situation is certainly keeping investors on their toes, but a more solid Europe should lead to confidence in the Euro and investors looking towards riskier assets. With the Euro a riskier asset than say the pound and dollar currently, I feel demand for Euro could increase and see EUR/USD moving towards 1.35.
Each post on this website represents the opinion of that individual author with the aim being to help assist you make a decision with regards your particular transfer, no matter what currency you are converting. Should you wish to discuss your trade in more detail or would like more information on the types of contracts available then please email me at email@example.com
Still waiting on sign off for a Greek debt deal- if it happens then I suspect we will see Euro strength. If once again we see it pushed off then the single currency will likely weaken against the pound.
To avoid splinters I am going to hop off the fence and say a deal will be agreed so if you are buying Euros buy now, and if you are selling hang on for a day or two. Let me know if you think I am right or wrong by emailing Colm at firstname.lastname@example.org quoting Euro Rate Forecast.
Likewise if you have a currency transaction you would like assistance with then by all means get in touch and I will explain how our services work and what the benefits are to you.
The Euro has had a positive start to the week as speculation that a deal to extend a second bailout to Greece will be agreed intensifies. An announcement from an EU commissioner said that Greece was “close” to reaching an agreement with it’s creditors. This has given the single currency a boost against both the Pound and the Dollar in the first couple of hours trading this week.
The Euro has been further strengthened with news from the World Economic Forum in Davos that the ECB would not be averse to a further phase of monetary (quantitative) easing in coming months. ECB President Draghi appears to be waiting to see the full effect of the last injection of liquidity before making a final decision but said that “we know for sure we have avoided a major credit crunch and a major funding crisis.” This more lenient approach to quantitative easing has been received well by the markets and I would expect to see the Euro gain strength in the medium to long term as a result.
For anyone who has Euros to sell in the coming months this is very good news as the Euro has been taking a bit if a hammering over the last couple of months and this could be the time to claw back some of the losses we have seen.
If you have any questions that you would like to ask me directly feel free to email me at email@example.com.
The Euro has clawed back ground against both the dollar and Pound overnight and in early morning trading. Dollar movements appear to have been a reaction to the Federal Reserve meeting yesterday evening in which the US base rate was held at 0.25%. Following the announcement, and in line with the FED’s new stance on Monetary Policy, the members of the committee gave insight into their projections for future interest rate movements and the outcome suggested rates are likely to remain at these levels into 2014. From an investors point of view this gives little support to the dollar and subsequently we have seen EUR/USD fall back into the mid 1.31 territory. I believe this to be a short term move and would still see the dollar back into the 1.20s as the global uncertainty will still lead investors to the ‘safe haven’ of the dollar.
For those with an interest in GBP/EUR we are following a worryingly similar trend to previous years. Since reaching the high of 1.2110 on the 15th January, the pound has lost 1.6% against the single currency in a two week period. Yesterday’s GDP (Gross Domestic Product) figures have done little to give confidence back to an already shaky pound with figures showing the final quarters growth of 2011 coming in at -0.2% worse than the predicted -0.1%. Should the next quarter also see negative growth we will officially be back in recession. Expect a rocky road ahead for this pairing as both the UK and Eurozone battle each other to produce the most negative data!! I still see a further move toward 1.15 and would urge Euro buyers to take stock of their current position whilst rates are still relatively strong.
As specialist currency brokers we can offer a number of contracts available in an attempt to safeguard your transfer. This can include the use of forward contracts, stop/loss contracts and LIMIT orders. The currency market is possibly the hardest market of all to predict as so much of the movements can be generated by factors out of your control. With the best will in the world we can attempt to forecast currency movements through identifying important data releases and following trends, however I believe a sensible way to approach the market is to identify a target level and stick to it. I have seen many clients set a target price, see that price reached, and then hold on for that little bit extra and end up securing their position below the original target price. The markets are just like a grumpy wife or girlfriend, they have a nasty habit of snapping back!!
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The Euro exchange rate roller coaster continues today with the single currency gaining in early trading over expectations a deal over a Greek swap deal being done today. The Euro hit a one month high against the pound before sterling rallied back 0.5%. The big news is likely to be the news from Greece and tomorrows UK GDP figures and Bank of England Minutes. Any deal over Greece would likely be well received and any signs that the UK is heading back towards recession or more Quantitative Easing and sterling will likely weaken significantly. On the other hand if the Greece situation drags on, or the UK data is better than expected (remember whilst unemployment was up retail figures recently were surprisingly much stronger than expected) and current exchange rate could push back through 1.20.
On top of this the US Federal Reserve meeting takes place tomorrow evening and given how much influence this can have on global confidence I would expect Wednesday to see some big swings in exchange rates. As such if you are buying or selling Euros, and may need to move quickly in case of either a big spike in your favour, or the market moving sharply against you, then please e-mail Colm at email@example.com (put ERF as the subject matter and an overview of what you need to do eg timescales, amounts, currency to buy or sell- the more detail the more specific I can be) or if you would prefer to talk through it on the phone just e-mail me your number.
I would be happy to give you some guidance on how to approach it and also give you access to free registration to get the best exchange rate.
Sterling has clawed back ground after the losses posted on Wednesday and Thursday creeping back above the 1.20. The Euro has however seen a slight increase against the dollar posting gains of over 1 cent from the high/low and trading back into the 1.29s.
GBP/EUR movements appear to have been dominated by improved retails sales figures released at 09:30 this morning as the data showed sales figures rebounded strongly in December. These figures to me are not surprising with the Christmas period likely to have over inflated the figures and as a Euro buyer I would not get too excited! I still feel with the rate hovering around 1.20 this represents a good buy opportunity particularly with the uncertainty within Europe still dominating this pair, and the currency market as a whole.
What next for the Euro?
As my colleague Jonny alluded to in his recent post (see below) the market conditions are following a worrying trend. In the past 5 years the market has breached 1.20 on four separate occasions and within a 1-4 month window the pound has lost anywhere from 4-15% in value against the single currency. I am not for a minute suggesting that this trend will continue, however I do feel Euro buyers hoping for further positive movements are treading on thin ice. Currently I think a strong argument can be made for both Euro strength and Euro weakness in the coming weeks as this pair is dominated by a raft of negative data within the Euro zone and the UK. For this reason I believe the best option is to remove that risk, and whether buying or selling Euros (particularly should you have a short term requirement) you may wish to remove this risk and consider your options. As a currency broker I have a number of options available to safeguard and guarantee your rate for a fixed period of time, this can be arranged through the use of a forward contract. Alternatively those with a penchant for risk, but at the same time don’t want to get their fingers too badly burnt, you may wish to consider a stop/loss contract. This is basic terms is your best and worst case scenario.
To discuss these contracts in more detail please email me at firstname.lastname@example.org
The Euro was continuing its fight back in early trading today back below 1.20 following a better than expected take up of Spanish and Italian bonds at auction. The decision by the ECB not to cut interest rates was also a big boost to the Euro as there was an outside chance of a cut yesterday (lowering interest rates would tend to weaken the currency concerned).
If you are selling Euros and have been worried by the recent collapse in value then by all means get in touch and I would be happy to look at your timescales and go through some options to help maximise your exchange rate- simply e-mail Colm at email@example.com and quote ERF (the EuroRateForecast site!)