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GBPEUR Strategy for the rest of 2016

Sterling to Euro exchange rates have had a roller coaster of the last 12 months. In that time we have gone from the best time to buy Euros in 8 years to now the worst time in 3 years. With 28 cents or 24% difference between the high and the low the move has been substantial and is an important piece of information to help you understand the volatility of the currency markets. It was only last year that some analysts at some of the major banks were  predicting the GBPEUR rate might hit 1.50! Well clearly this is not likely at all in the current market and with a suggestion the Bank of England might not raise rates for 70 months sterling weakness is something we should probably getting used to the pound erring on the weaker side. It seems sensible therefore to prepare for further weakness in the coming weeks and months, the Bank of England have threatened further cuts and this could take GBPEUR lower towards 1.13-1.14.

It seems the economic data for the UK will get worse and sterling will weaken which will provide downward pressure on GBPEUR. But what about the Euro, how will this perform? Well the Italian banking issues seems to be contained for now and Greece is in a process of restructuring debt. There are actually signs the economic plans in the Eurozone are working and this has given rise to fresh buoyancy on the Euro. Whilst there is always the outside prospect of the Euro weakening as a result of problems with Eurozone debt issues, this is not a good enough reason to not buy Euros at the moment. I really feel if you have Euros to buy before the end of the year getting it done sooner rather than later is the safest best to avoid further disappointment. If you do have the luxury of being able to wait a while then we might see rates over 1.20 again but this could be a very disappointing wait and in my opinion it is unlikely to be reached in 2016.

Please take note if you like the information we provide you can subscribe to the posts absolutely free of charge, just fill in your email address at the top of the page. Otherwise for more direct information please email me on jmw@currencies.co.uk or call 01494 787 478 and ask to speak to me Jonny.

Will the GBP/EUR exchange rate continue it’s decline and test the 1.16’s this week? (Joseph Wright)

After tailing off towards the end of last week the Pound to Euro Conversion rate has begun the week once again in bearish fashion, as the markets continue to digest the larger than expected financial stimulus package announced last week by the Bank of England.

I’m expecting the effects of this financial stimulus package to continue to weigh on GBP exchange rates over the course of this year, and I think that each time we receive updated economic releases outlining the performance of the UK economy post-brexit, these releases will be heavily scrutinised due to the expectations of weaker economic output from the UK since the public collectively voted to leave.

Investor sentiment is likely to drive the exchange rate between GBP and EUR today as there is very little economic news releases scheduled for today.

As today’s trading session progresses we’ve seen the pound decline as the markets digest the outcome of last Thursday’s Bank of England decisions. There was the expected Interest rate cut down to 0.25% but I think what really caught markets off guard was the greater than expected financial stimulus package from the BoE, with an additional £60bn of Government Bonds now in circulation.

The measures implemented last week will result in additional Pounds being now circulated, and this will likely weaken the Pound as we immediately experienced in the aftermath of those decisions.

If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me (Joe) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

GBP/EUR trends upward after Construction Figures impress, but will the Pound lose these gains after Thursday’s Interest Rate decision (Joseph Wright)

The Pound trended upward today vs most other major currencies as the latest PMI Construction figures beat expectations, with the markets receiving this news well as they were for July, an important month considering they provide us with an overview of the UK’s construction figures for the first whole month since the ‘Brexit’.

The key date this week is Thursday, because at 12 pm a raft of news sensitive economic announcements will be made with the most important being the Interest Rate decision. There is an expectation within the marketplace that the base rate will be cut down to 0.25% from 0.5% as Mark Carney (the governor of the Bank of England) has alluded to this move previously.

Despite today’s slight gains for the Pound we have seen the Pound fall slightly over the past few trading sessions so I wouldn’t be surprised to see that same pattern re-emerge tomorrow and prior to lunchtime on Thursday. I’m not expecting a big drop for the Pound this Thursday as markets are anticipating the cut, allow if the rate isn’t cut we could see the Pound spike upward which is something Euro sellers should be aware of.

If you have an upcoming currency requirement involving the Pound, or the Euro, it’s worth getting in touch with me (Joe) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

Sterling likely to continue its decline vs the Euro throughout 2016 (Joseph Wright)

Those with a foreign currency requirement involving selling the Pound may wish to consider making that conversion sooner as opposed to later, as personally I think the Pound will continue to decline against the Euro throughout the year and into next year as the negative effects of the ‘Brexit’ are made clear in form of economic data releases.

Last Friday was the first time economic news out of the UK has been released providing us with an overview of the economy post-brexit. Both Services and Manufacturing data showed declines from their previous recordings and we’re now aware that economic output in the UK has dropped to its lowest level since 2009.

Despite yesterday morning’s UK 2nd Quarter GDP figures showing growth of 0.6% when 0.5% was expected, markets were left unchanged and this demonstrates to me that presently there is further potential for downside than upside with regards to Sterling exchange rates, as good news is barely affecting exchange rates whereas negative news is driving down Sterling’s value. Investors are reasonably concerned over the uncertainty surrounding the UK’s economic future.

The inter-bank level is just above 1.19 at the moment, not a huge distance from the average of roughly 1.25 over the past decade. Those selling Pounds to buy Euros may wish to remove the risk of further falls by making their exchange shortly rather than waiting which could be an expensive strategy, as prior to the ‘Brexit’ numerous FX analysts in the industry predicted parity for the GBP/EUR pair, so there could be a lot further to go if they’re proved right over time.

If you have an upcoming currency requirement involving GBP/EUR, you can get in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

Will the pound rise further against the Euro? GBPEUR Forecast

Politics has been a big driver on GBPEUR particularly with the Brexit vote and its impact on sterling. However the next few weeks will I believe see economic factors play a much bigger role and some big moves could happen as early as 4th August when the Bank of England meet to discuss their latest interest rate decision. They are talking about an interest rate cut and also the possibility of QE which could really weigh on the pound. I have been predicting that the low in the 1.15’s could easily be revisited whilst depending on the extent of any measures we couldn’t rule out further falls perhaps 1.11-1.12. This is based on the worst case scenario as the last time the Bank of England announced QE (Quantitative Easing) measures and an interest rate cut the pound fell to almost 1 for 1 with the Euro. The outlook is not quite as bad as perhaps previously considered but it does still carry risks for anyone buying the Euro with pounds.

There is also risk for clients buying pounds with Euros that the pound rises or the Euro weakens. We saw at the beginning of July the pound rise almost 2 cents as the Bank of England disappointed markets by keeping interest rates on hold. They made clear in their commentary that they might look again in August or September so this is when the pound could rise or fall. I think if they fail to do anything they are going to disappoint the market and the pound will rally. We also must recount some of the issues we have over the Euro, the currency is far from out of the woods and whilst strong against such a weak pound the Euro is weak against most other currencies following Brexit and owing to nerves over the Italian banking issues and fears over Greece’s debt. I think these troubles could see the rate rise easily up into the lower 1.20’s with 1.25 a likely top end on the GBPEUR pair.

As you can see there is no magic special forecast as to what will happen next. No one can predict the future but by tracking events and highlighting the important considerations we can help plan and manage your exposure to the market. If you have any transfers from £10,000 up for business or private clients purchasing (or selling) property overseas please speak to me Jonny by emailing jmw@currencies.co.uk. I work as a Chief Analyst and Associate Director for one of the UK’s top currency brokerages which has been in business for 17 years so will be very well placed to help you with any requirements you might have.

GBP/EUR could sway from 1.20 today, with a downward move most likely (Joseph Wright)

Today will be the first time UK specific economic news will be released showing the effects of the UK’s ‘Brexit’, so later today there’s a chance that the GBP/EUR pair will be trading within a new range away from the 1.20 mark the pair have traded at for most of the week.

It will be PMI Manufacturing and PMI Services data that will be released at 9.30am this morning. PMI stands for Purchasing Managers Index and the figures will provide us with an idea of business conditions within the UK for the month of July in terms of output, new orders, employment levels for the sector, sales and company forecasts.

50 is a key benchmark for the figures as anything above demonstrates growth whereas numbers below indicate a contraction. The figures are expected to show a decline so should they beat expectations there could be a spike upward for the Pound, but I think there is more downside potential considering the negative effects the ‘Brexit’ appears to be having, and I’m expecting some negative figures to be released.

GBP/EUR are still just 5 cents from the 10 year average of 1.25 so those looking to sell their Pounds and purchase Euros may wish to consider making that transfer sooner as opposed to later as over time there is a chance the Pound could fall closer to parity, especially if predictions by the likes of HSBC and Lloyds prior to the EU Referendum come to fruition.

If you are planning a currency exchange involving the Pound and the Euro, it’s worth your time getting in contact with me (Joseph) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

Where next for GBP/EUR? (Daniel Charles Johnson)

With Theresa May’s new cabinet in place I think we will see a gradual rally for Sterling. There are however two events which could hold back the Pound. First up, the Bank of England’s (BOE) next interest rate decision on 4th August. There was the high possibility of an interest cut at the Monetary Policy Committee’s meeting this month but rates were held. Usually if an economic data release goes a against the general consensus you will see a big swing in currency values. GBP/EUR however only experience slight movement, very briefly moving to 1.21 before settling at around 1.20. Only a cent move from the pre-interest interbank level of 1.19. I think this can be put down to there being a firm chance of cut in August. It is common knowledge therefore I would not expect Sterling to fall considerably when a cut does occur.

The second event which could cause Sterling weakness is the implementation of article 50. Article 50 essentially engages the UK’s withdrawal from the EU, this will almost certainly weaken the Pound. I do not expect this to occur until at the earliest Q1 2017.

If you have a currency requirement it is vital to be in touch with an experienced broker. The timing of your trade is key during such a volatile  times, If you have a veteran broker on board he can keep you up to date with what is happening in the market to help you make an informed decision. If you would like me to help with your trade I will be happy to help. Let me know the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the UK and as such I am in a position to beat nearly every competitors rate of exchange. You would be looking at around a 4% saving in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog and I look forward to hearing from you.

 

GBP/EUR rates recoup yesterday’s losses (Joshua Privett)

Mixed data on UK industrial production figures has seen GBP/EUR rates bridge back to 1.17 after falling from there yesterday to the 1.15/1.16 levels not seen since 2013 for buying Euro rates.

The mixed data showed the best forecasts in seven years for industrial growth – but this is largely due to a cheaper Pound and the theory that this will boost British competitiveness in an area where we have lagged behind for some time. Strangely the sector actually contracted last month, so whilst the figures for the year look positive these are purely forecasts which is why the effect on the Pound was muted.

The reason why rates had fallen the previous day can be put down to a speech given by Mark Carney of the Bank of England, concerning future economic policy for the UK in the wake of the Brexit.

He has relaxed lending policies (after years of tightening them) in a bid to keep the economy ticking over and avoid any adverse effects to the British housing market, which is already looking tentative.

If he is relaxing lending policies markets are already concerned that next week he will undertake further emergency intervention into the economy. Next week is the Bank of England interest rate decision and Monetary Policy Statement, and heavy hints have been made that, to complement this increase in lending, there will be interest rate cuts and fresh bouts of quantitative easing for the UK.

An interest rate cut would cause the Pound to plummet as it would lose demand compared to currencies with higher yields which are also vastly more stable. QE is an emergency measure, and this announcement, as it did for the Eurozone in January 2015, would hit the value of the Pound for a prolonged period.

I strongly recommend that anyone with a Euro buying requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximize your Euro return.

Whilst the market is low and expected to get worse, this week may present some final opportunities with a few pieces of Eurozone data which could make the Euro a cheaper prospect in the short-term.

I have never had an issue beating the rates of exchange offered elsewhere, and any tempting buying Euro rates which emerge can be fixed as they are that day for anyone considering buying Euros in the future with a small deposit. This effectively allows you to pre-book your currency, and avoid the uncertainty over the next few weeks.

Euro sellers can also get in contact, and I will explain how best to follow the markets to ensure you do not miss any peaks which emerge in the time-frame before you complete your transfer.

GBP/EUR is likely to continue it’s decline, and here are the reasons why (Joseph Wright)

Anyone with an eye on financial markets or even the news in general will all too aware of whats going on the UK at the moment, and it doesn’t bode well for those hoping to sell Pounds at a higher rate.

Prior to the UK’s EU Referendum investors were warned that the Pound could potentially fall to parity with the Euro by a number of major analysts, with HSBC, Lloyds and the National Institute of Economic and Social Research (NIESR) all outlining parity as a benchmark for GBP/EUR.

That trading level hasn’t been seen as of yet since the outcome of the vote but with the Pound falling at almost a daily basis I wouldn’t rule it out by the end of the year.

The most recent spooking of the markets has come from the halting of trading in some of the UK’s largest commercial property funds, including it’s largest. So far Standard Life, Aviva and M&G (the largest in the country with holdings of £4.4bn)  have all halted trading after investors rushed to take their funds out, a bad sign for the UK’s longer term growth prospects and therefore, bad for the Pound.

This time last week Mark Carney put an end to the brief fightback from the Pound after the initial drop after the news of the ‘Brexit’ was first announced. He mentioned the possibility of a further interest rate cut down from 0.5% to 0.25% which sent the Pound downwards and on it’s way to a new 31 year low against the dollar.

I think anyone looking to convert Pounds into Euros may wish to consider making that conversion sooner as opposed to later as further talk of an interest cut is likely to drive down the Pound further, particularly if the actual rate cut occurs and that could be as soon as next Thursday when the Monetary Policy Committee is due to make a decision.

Those with an upcoming currency requirement involving the Pound may wish to get in contact regarding strategies and how best to time the trade, or trades should you be open to the approach of a staggered entry. Our specialist currency exchange brokerage doesn’t offer financial advice but we do assist our clients with the timing of their trades based on price targets and historical data such as annual and daily highs and lows.

If you would like to discuss your currency exchange with me, and would like to consider taking advantage of award winning exchange rates from one of the UK’s leading regulated currency brokerages, feel free to email me directly ideally with a telephone number onjxw@currencies.co.uk with an outline of your requirement. You can also call me directly on 01494 787 478, just ask one of the reception team for Joe.

Euro buying rates rising following Brexit vote (Joshua Privett)

The political uncertainty surrounding the UK economy following the announcement of a majority in the UK supporting a Brexit originally forced Euro buying rates down to their lowest levels since April. The strong silver lining for Euro buyers is that Euro buying rates were impacted the least compared to Sterling’s other major currency pairings. 

The above is due to the fact that the Euro has suffered alongside the Pound on the news – similar to what happened with the potential for a ‘Grexit’ just last year, but without the same issues of debt obligations on the cards, so the Euro isn’t suffering as much as before.

The news was much worse for the value of the Pound, but after two very uncertain days of trading, today and Tuesday has seen some stability return to the financial world. The Pound has now regained 2 cents against the Euro, to offset the 10 cent loss on Friday.

Moving forward, rates will be governed by the evolving landscape of the Brexit, and the implications on the UK economy. Leadership battles will ensue, and hints about the time-frame for a Brexit will govern the value of the Pound. It’s likely that this sudden stability is down to a delayed fuse until October that the UK will be enacting Article 50, as Cameron is waiting until a new Prime Minister is installed.

In the short-term however, it is likely the Pound will be coming under further pressure with the UK’s next interest rate decision at the beginning of next month. Mark Carney, the Governor of the Bank of England, has hinted heavily that an interest rate cut may occur to protect the economy during this transitional period. Should this occur demand for the Pound will fall further still, as interest rates are already at record lows of 0.5%.

I strongly recommend that anyone with a Euro buying requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your Euro return. Given this window of opportunity that commentators are expecting, a premium will be put on being able to move quickly should any favourable opportunities emerge.

My service is very proactive and I have never had an issue beating the rates of exchange offered elsewhere. For anyone requiring Euros later in the year, these current buying levels can also be fixed in place to avoid the uncertainty inherent in the markets over the next few months. Essentially you can pre-book your currency to be purchased at a later date. 01494 787 478

Sterling continues to climb as Brexit vote approaches (Joseph Wright)

Recent polls have demonstrated a slight lead for the ‘Remain’ campaigns and the markets have welcomed this news, with the Pound gaining on the US Dollar by a remarkable 4.75% and against the Euro by 3.42%.

Sterling hasn’t bounced upwards at such a substantial amount since 1985 during the Plaza Accord (when the worlds major governments agreed to weaken the US Dollar in relation to the Japanese Yen and German Deutsche Mark by intervening in the currency markets).

These recent movements have presented those converting Sterling into other currencies with surprisingly attractive trading levels. This Friday the results of the EU Referendum will be known and considering that political uncertainty is one of the main drivers of currency weakness, it’s surprising to see the Pound performing so well.

George Soros, a famous currency speculator who famously made his fortune selling Sterling during Black Wednesday back in 1992, had warned that should the UK vote to leave the EU we could see another dramatic drop in the value of Sterling.

Those with a currency requirement involving the Pound may wish to consider taking advantage of the boost to Sterling exchange rates prior to Thursday morning in case we are dealt and surprise and the  Leave camp wins, which according to almost all analysts would cause Sterling to drop significantly.

If you are planning to use GBP to buy a foreign currency it’s worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from award winning exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

What are my options buying and selling Euros ahead of the EU Referendum?

The split is now pretty much 50 / 50 between the Leave and Remain camps as we enter the final week of the campaign. June 23rd will see the vote and the rates are likely to be very volatile around this time, making difficult any decisions to buy currency. To navigate the uncertainty we offer a number of options as well as a helpful proactive service to help you keep up to date with the latest trends and news on the markets.

If you are looking to buy or sell Euros then the next week is likely to not only present opportunities but also create headaches. As tempting as it is in this market to hang fire and try to maximise your deal from getting the best deal it is also important to factor int he possibility the market will move quickly and sharply against you possibly costing you thousands. Usually I would be giving clients some real insight into the markets and trying to help pin point a certain moment when an optimum trade might take place. However with so much uncertainty I would be suggesting more of a defensive strategy to try to mitigate any losses. If you are looking for any guidance buying or selling Euros and wish for some information on your options and what to expect please email me Jonathan on jmw@currencies.co.uk

Two popular options to help limit any losses are the Limit Order and Forward Contract. A Limit Order works by helping you achieve a better rate than is currently achievable in the market. You choose the higher desired exchange rate you wish to exchange at and we put an automatic order into the market to secure that level. Once the level is hit we automatically purchase your currency and you are guaranteed your exchange rate. This save you the hassle of watching the rate continuously and allows for the rate to be hit overnight or outside of normal trading hours.

A Forward Contract allows you to lock in current exchange rates even if you don’t have full funds available. For a small deposit of the total you can lock in today’s rates on a larger sum and give yourself time to pay it off. This is perfect for businesses and private individuals who know they will have a transfer coming up in the future and wish to lock in their price now. Many clients  buying and selling property have been quick to use this contract in recent weeks so they understand exactly how much any future transfer will cost them.

Do you have a target exchange rate you are hoping to see in the next week? Are you considering a currency purchase and struggling to make sense of the current market and what lies ahead? You are not alone and whilst I cannot tell you exactly what will happen (no one can!) I am positive I can offer some useful information and expertise to help you properly manage your exposure to the currency markets.

If you wish to learn more or run through our service please email through a brief description of your situation and any target levels to jmw@currencies.co.uk.