Tag Archives: the best deal on euros against the pound
Many buyers of Euros are upset at the current level and are keenly waiting for rates to recover back to 1.20 or even higher. This prospect is not completely out of the question but I do feel it is more likely buying Euros will become more expensive not cheaper on a balance of probabilities over the course of the next few months. What we are waiting for if buying Euros is some Euro weakness but for now it is sterling weakness which is driving the GBPEUR exchange rate and taking investors attention.
There are two reasons that could see the Euro weaken at the moment. The first being a resurgence of the Euro debt crisis with Greece and co. Were we to suddenly see Greece hit the headlines again the Euro would certainly weaken but the outlook and likelihood of this happening is fairly limited. Last year the Euro was very weak which caused much volatility across many exchange rates, unfortunately for Euro buyers this is unlikely to quickly reverse. The Eurozone came up with a number of method to manage the risk of the Greek debt crisis which are doing very well so far. The second is that economic conditions in the Eurozone could deteriorate to the point where they might need more QE which would weaken the Euro. This is the more likely scenario to weaken the Euro but the expectation is this is more likely to not happen than to happen.
If you have any questions or currency transfers to consider the likelihood is for more GBP weakness, the challenges for the pound and the UK seem to me to outweigh those facing the Eurozone and the Euro. If you wish to learn or discuss more please speak to me Jonathan on email@example.com.
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 firstname.lastname@example.org 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 email@example.com. 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 firstname.lastname@example.org 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.