Category Archives: The Week Ahead
Euro rates rally against the Pound. Bank of England minutes tomorrow may cause further GBP/EUR volatility
Following a dip in the UK’s inflation rate the pound has fallen against a host of currencies including the Euro dropping rates into the mid 1.17s. With the Bank of England minutes released at 09:30 tomorrow morning tomorrow could also prove a busy day for GBP/EUR. For me I am not expecting to much from the minutes and indeed you may find very little impact on the market. In fact I feel the Bank of England may adopt a relatively neutral stance over the next 6 weeks as Sir Mervyn King hands over the reigns to Mark Carney in July. It is at this point that you may find more radical policies to be implemented by the central bank. Many expect Mr Carney to impose of self from the word go and give a nod to further Quantitative Easing, or even a surprise interest rate hike – of course he does not have the final say and will need to see a majority vote from the 9 members of the MPC (Monetary Policy Committee) but he may begin to influence his peers.
Also at 09:30 tomorrow watch out for Retail Sales figures from the UK (expected to show a strong improvement that could lead to GBP strength as a result). Should you have an interest in Euro exchange rates then also watch out for a speech from Mario Draghi Thursday morning, positive sentiment from Mr Draghi the Euro may continue its strong start to the trading week.
As you can see we have plenty of data released for the rest of the week. To be kept up to date with the impact these data sets may have for your individual requirement then please contact me and I will happily run though my forecasts and run through the various contracts we can offer to help maximise your currency exchange. I am very confident I can help achieve a better rate than your current provider. Please call the office on 01494 787478 or email me (Mike) with a brief overview of your requirement and I will gladly contact you to help with your money exchange. I can be reached at mgv@currencies.co.uk
Sterling Euro exchange rates in May – What can we expect? (Daniel Wright)
With positive growth figures for the U.K and interest rates being cut in Europe the signs are that we are potentially starting to turn a corner for the Pound against the Euro which is great news for those looking to buy property over in France in the near future.
Investors will however be closely monitoring how economic data for the U.K is this month and any hints of the U.K taking one step forward and two steps back will not be looked upon greatly for the Pound so this is one thing we need to be aware of. My personal opinion is that things are indeed on the up for the U.K and although I do not expect major economic growth until at least 2014 I think we should now be able to tread water and avoid the dreaded recession for the foreseeable future unless we do see another major incident within the Eurozone that could dent the U.K too.
With the major economic releases out of the way and the recession avoided the spotlight does not appear to be back on Europe and any comments from members of the European Central Bank regarding future fiscal policy will be taken extremely seriously this month. Just last week following the ECB interest rate cut, at a press conference held by head of the European Central Bank Mario Draghi the mere mention of possible negative deposit rates led to the Euro losing ground by almost a cent against Sterling in a matter of minutes, so if this policy is adopted in the future we could see further Euro weakness.
All in all I feel that we are now more likely to see Sterling go back above 1.20 than we are to see it go back below 1.15 however in such a fragile market if you are looking to buy Euros with Sterling in the near future then it is key that you keep a very close eye on the markets as things can change very quickly and even the slightest movement in exchange rates can drastically effect the price of your overseas property.
Potential UK Recession Key for GBP/EUR Rates (Matthew Vassallo)
Bad news for the UK economy seems to be a regular occurrence of late and the situation continues to look bleak as we head into a key period for GBP/EUR exchange rates. The EUR has tried to strengthen amid this negativity but is constantly hampered by its own economic problems, which are deep rooted throughout the Eurozone economy.
It is almost a guarantee that we will hear of further unrest, whether it be in Cyprus, Ireland or one of the larger nations such as Spain, Italy or France. All have the ability to create another global financial crisis if their economies were to collapse and at times the Eurozone seems as if it is held together by nothing more than empty promises and increasingly harsh austerity measures.
As mentioned above the coming weeks could prove crucial to the short to medium-term outlook of GBP/EUR. The 25th of April should be a key date in anyone’s diary who has a GBP/EUR requirement, as this is when we will find out whether the UK economy falls back into official recession. Whilst these figures could well be revised, the initial market may well mirror these results. I cannot see GBP gaining much momentum even if we do avoid recession, although there will be an element of market confidence returning to the Pound and it shouldn’t lose any more value. If we do in fact find ourselves back in a recession the Pound will struggle to make any serious inroads against the major currencies and provided the Eurozone doesn’t throw up any nasty surprises (something which sounds unlikely given the recent history), then we are likely to see Sterling move back towards 1.14.
Here at Foreign Currency Direct plc we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates we can offer, or need to be kept up to date with all the latest market movements then please call us on 0044 1494 787 478.
Euro weakens following comments that we may see a cut in interest rates soon
The Euro lost ground yesterday following comments by ECB member Weidmann who said “The ECB may adjust rates if new information warrants it”.
This suggests that we may now be moving ever closer to an interest rate cut in Europe which may weaken the Euro against all major currencies.
An interest rate cut is generally seen as negative for the currency concerned and a hike a positive as it makes a currency more attractive to investors. Even the slightest hint of a rate cut and a currency can devalue which is why we headed back to roughly 1.17 (0.8547) against the Pound (over a cent higher than the low of the day) before close of trading.
This highlights the need to have someone on your side monitoring rates of exchange… I saved some clients over £2000 on their €235,000 purchase yesterday by telling them to sit tight and wait after the drop we saw in early morning trading…. The decision of course always has to be the clients but they agreed and got their Euros a lot cheaper at the end of the day.
I cannot directly advise you but I can give you lots of information to help you make an informed decision.
If you have a pending currency transfer to carry out and you want the very best exchange rates to either buy or sell the Pound and you want to be kept fully up to speed with market movements that may save you €1000s then contact me directly and I will be happy to help you compare with your bank or current provider – I pride myself on not only rates but customer service too.
You can contact me directly djw@currencies.co.uk please quote ERF in the subject title and leave me a number to call you on, I look forward to speaking with you.
What to expect this week for Euro exchange rates?
Euro exchange rates have remained relatively stable against the Pound and US Dollar today but have posted strong gains against the Australian Dollar following worst than expected growth forecasts from China. With China being the largest net importer for Australian raw materials and with the Australian economy heavily reliant on its mining sector this is a cause for concern for the Aussie and is likely to create some good opportunities to buy AUD in the coming few days.
Slightly closer to home what data this week may affect the Euro? Starting with tomorrow we have the ZEW economic sentiment survey released at 10:00 BST. The ZEW is a well respected think tank and this data will be closely monitored as it shows the levels of institutional investment sentiment and is a key market confidence indicator. It gives the balance of investors and analysts market confidence of the Euro zone and can directly impact of on the value of the Euro dependent on a positive or negative release. Later tomorrow watch out for a speech from ECB governor Mario Draghi, again his comments can drive the markets – is notoriously optimistic so could lead to Euro strength during and after his speech scheduled for 14:00 BST.
Heading into the rest of the trading week look out for the following:
- Thursday – Spanish Bond Auction.
- Friday – European Trade Balance figures.
To discuss the market trends and current data that might affect your particular currency transfer then please contact the office on 01494 787478. Should you wish to test the service or discuss the contracts we have available then please email me with a brief description of your current trade/requirement and I will happily provide you with a live quote. I can be reached by email at mgv@currencies.co.uk
Best rates for buying USD with Euros for a month. (Ben Amrany)
The Euro has spiked to a one month high against the US Dollar while weakening from a low of 1.1681 back to 1.1758 against the pound. A positive Italian bond auction was behind the strength against the Dollar and it has also breached highs against the Japanese Yen mainly due to their monetary easing programme in the far east.
Since events in Cyprus the Euro has actually weakened quite significantly against a host of currencies. A good example of this is against the Australian Dollar where the rate went from a high of 1.32 down to 1.22 in the space of a few weeks.
As events in Europe continue to hamper the single currency I feel that hoping the market will move back in your favour could be a risky strategy as all signs are for further Euro weakness over the coming weeks.
There was an article going around Greece that they may be the next country to tax foreign bank holders like in Cyprus. It was probably one of these ifs and buts articles but it does beggar the question what if Cyprus has set a president now.
If you are sitting on Euros then you may be wise to look at making your conversion sooner rather than later. The rates at present against the pound are still 4-5% better than before the New Year so why take the risk of it potentially going further against.
data wise there is a host of inflation data out of Spain and Italy tomorrow along with industrial production figures for the whole of the Euro zone. This could cause some further volatility on the last day of the week so do be cautious.
If you have an up and coming transfer to make to buy or sell Euros then do feel free to inform me what your requirement is and I will explain the options that are available to you to help you achieve a better rate of exchange than the high street banks. Savings can be up to 4% so please get in touch at bma@currencies.co.uk
Thank you for reading
Ben Amrany
Busy day for GBP/EUR, what data might influence exchange rates today?
Today we have plenty of data to keep those of you with an interest in Sterling and the Euro busy. This begins at 09:30 this morning with UK Industrial Production and manufacturing data. Both are expected to show a slight improvement month on month and should they come out as expected, or better, then this morning could be a strong start for the pound. Of course any deviation from the forecasted result and watch for market movement at 09:30. Following this at 15:00 watch out for UK revised GDP estimates. Currently the UK is on course for its third recession in five years and this data will give further clues as to whether or not this can be avoided. Expectations are for a figure of -0.1% and if as predicted will show the UK is still on course for the triple dip but is very also very close to avoiding recession. For me this will begin to take focus for the GBP/EUR pair in the next couple of weeks, as the markets moves away from the ongoing Cyprus debacle, eyes will be focused on the UK.
Of course there is a real threat of contagion resulting from Cyprus and this should halt any short term momentum for the Euro across the board, however I feel should the UK head back into recession I would expect to see GBP/EUR to fall back towards 1.15 territory. By avoiding the triple dip then I believe the 1.20 area will be tested. This leaves a large range for this pairing and my bring opportunities for both buyers and sellers in the coming weeks.
To discuss the market trends and current data that might affect your particular currency transfer then please contact the office on 01494 725353. As one of the UK’s longest standing independent brokers I am very confident I can undercut any price you have been offered. Should you wish to test the service or discuss the contracts we have available then please email me with a brief description of your current trade and I will happily provide you with a live quote. I can be reached by email on mgv@currencies.co.uk
No more QE gives Sterling some support against the Euro (Tom Holian)
GBPEUR exchange rates have surged today breaking through 1.18 again after a slow start to the week. The Bank of England today decided to keep QE on hold for the time being and has also kept interest rates the same at 0.5%. A UK service sector report published yesterday saw the sector grow at its fastest rate for seven months in March. The UK economy contracted by -0.3% in the final quarter of 2012 and if it contracts again we could be seeing the UK in recession for the the third time in just fiver year. Not good reading for the UK. The positive data from this morning has seen the Pound regain some confidence providing some good short term buying opportunities.
There was little expectation that the Bank of England would change any policy particularly with Mark Carney succeeding Mervyn King in July. It will however be interesting to see what the minutes of the meeting reveal in just under two week time.
Eurozone GDP data is published tomorrow at 11am so all eyes will be on this data release. This first estimate of Euro GDP will likely affect GBPEUR exchange rates so if your’e considering making a currency transfer please contact me directly for a live quote by calling 01494-787-461 and asking for Tom Holian. Although issues in Cyprus now seem to have settled down I would not be surprised to see a negative impact for Eurozone GDP.
Also tomorrow one big market mover to watch out for is US Non Farm Payroll which is often the biggest currency mover of the month. US data affects global risk appetite and if we see positive news for the Dollar this could in turn weaken the Euro so keep an eye on exchange rates tomorrow afternoon or if you’d like me to do it for you then email me Tom Holian teh@currencies.co.uk
Euro strength ahead of the ECB interest rate decision at 12:45
Euro exchange rates have rallied this morning bringing moves over the past 48 hours to more than 1% against the pound. This comes ahead of another busy day for the Euro with the first meeting of the the European Central Bank following the €10bn bailout of Cyprus and the much publicised issues surrounding the bailout. Many investors will be looking for Mario Draghi (head of the ECB) to give a vote of confidence to the Euro zone and its single currency and with Draghi notoriously optimistic, epositive rhetoric from Draghi could lead to further Euro strength this afternoon.
Against the USD the trends are still in favour of the dollar and may continue due to continued demands for the dollars safe haven status. Overnight the Bank of Japan increased stimulus as it aims to double the monetary base over two years through the aggressive purchase of long-term bonds, in a dramatic shift aimed at ridding Japan of the deflation that has dogged the country for almost two decades. This is a bold move for the new central governor Haruhiko Kuroda and may shift investors risk apetite. As a result the JPY has devalued and with the Yen often heaviliy involved in currency speculators risk portfolio this may create significant shifts in currency trends over the coming days creating volatility for the safe haven currencies (historically USD and CHF) and many riskier assets such as the AUD, NZD, ZAR and EUR. Wacth for some big shift over the next few working days.
Should you have any upcoming money transfers to arrange and you have found this blog useful then why not contact us to see what we can do for you? The purpose of the site is to give you independent market views to help you make an informed decision with your currency exchange. By giving yourself as much information as possible it can put you in a far stronger position when attempting to maximise your currency exchange, allowing you to limit your exposure to adverse market movement. Should you wish to find out more about the specialist currency service we provide, whether you are a private or corporate client, then we can help. Please get in touch either on 01494 787478 or by emailing me with a brief description of your individual requirement and I will happily contact you and run though your options. You can reach me direct at mgv@currencies.co.uk
