Tag Archives: the best deal on euros against the pound
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 email@example.com 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.
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 firstname.lastname@example.org. 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.
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 email@example.com 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.
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 firstname.lastname@example.org 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.
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 email@example.com 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.
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 firstname.lastname@example.org
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 email@example.com.