Tag Archives: usdeur
Euro exchange rates hit fresh lows against the USD & GBP. What will happen with the Euro going forward
Every day there seems to be negative news to come out of the Euro zone which is having a real impact on the single currency. If you are holding Euros to exchange them to pounds or USD you may be finding this time worrying and stressful. The Euro yesterday weakened to fresh lows against the pound at 0.7951/1.2577 and was down against the USD to 1.2680. If this is of concern please email me at bma@currencies.co.uk and I can talk you through the options that may help you limit your loss.
In early morning trading yesterday there was a very small window of opportunity when the Euro did strengthen. This was on the back of some positive GDP data to come out of Germany. Their economy grew more than what was anticipated and this lent some support to the Euro. However this strength only lasted a very small amount of time. By the afternoon the Euro continued its recent trend by weakening to the levels stated above.
Now looking forward with all the uncertainty that is surrounding Greece (It seems like they are going back to the polls) with the anti austerity voters looking at hampering the calls from the EU and IMF. Now the Polls are suggesting that the leftist Syriza bloc could get in and they are opposed to any further cut backs in their country. This is all leaving an awful lot of uncertainty and the biggest loser at present are clients that need to sell their Euros.
Now although the rates are lot worse than last year you have to look at these things logically. There are not many analysts out there that think this situation is going to change in the near term and that the Euro will strengthen significantly for a long time. If you feel that the Euro will fight back please email me at bma@currencies.co.uk and let me know your reasons why. If you are in the mind set of most analysts that think the pound and the US Dollar will hold its ground and linger at the current levels for a good few weeks you may be prudent to look at cutting your loss and get as much back for your Euros as possible. Unfortunately the longer you leave your exchange the worst it may get for you.
If you are buying Euros in the near term things could not be going better. I would be placing limit orders in the market to try and ride this positive wave and see if you can achieve that little bit more. As stated though if you are selling I would be acting very soon. If you would like to make contact you can email me at bma@currencies.co.uk and we can discuss your requirement and the options that are available to you to help you decide when is the best time to make your exchange. We will make sure that teh rates of exchange we offer are a lot more competitive than your high street bank so you will get our expert personal service plus a better rate of exchange.
Ben Amrany
What can we expect now on Euro rates? EURGBP and EURUSD Outlook
Whether looking to buy or sell the Euro current events are having a serious effect on the exchange rates on offer. For years and months many have talked of the danger of the debt crisis in Europe and it is now being properly reflected in the exchange rate. The rate has dramatically shot up lately and I cannot see any change in this current course, nor any reason to turn the tide.
Anti austerity parties are threatening to tear up the fiscal pact which had brought calm to the markets last year. It is only now we can see how the ‘Merkozy’ partnership was key to the Euro’s strength for the last few years. I doubt whether Francois Hollande will be quite as bad as predicted but it is the events once again in Greece that have really got investors nervous. The parties that have gained support are not only opposed to the fiscal pacts, they are also opposed to the bailout itself!
EURGBP Outlook
If you are looking to buy Euros with sterling, you are looking at a 3 and a half year high today. With the pound gaining favour on the back on eurozone uncertainty, the GBPEUR is heading in one direction only. If you are looking to sell Euros for sterling I am afraid things have got bad for you but may be about to get much, much worse. With no sign of abatement in the current crisis and the pound finding more and more favour, it looks like this type of transaction will only get more and more expensive. Even bad economic news like the fact the UK is in recession has not damaged the pound and since the UK is likely to be the first of the UK, US and Europe to be raising rates, I really think anyone selling Euros for sterling should act quickly to avoid further disappointment. If you do not need to make a EURGBP trade for sometime, do not worry we can still fix rates ahead for a future date utilising our forward contract option. Even if you are firmly of the belief that the rate will somehow magically go back to 1.15, I recommend making some kind of contingency. As a specialist currency broker I can offer free information on all of your options at this time. Feel free to email me on jmw@currencies.co.uk or why not call 01494 787 478 and ask to speak to me quoting ERF.
EURUSD Outlook
If considering selling Euros for dollars, I think current levels are well worth taking advantage of. Whilst the rate has of course dropped lately I fear it may get worse. At the moment the Euro is weak but the dollar is also weak! If this Eurozone crisis continues to escalate and we see a more risk off approach by traders, we will more than likely see the rate move towards the 1.26-1.27 range as theUSD is a safe haven currency. USD is used by investors in times of real uncertainty (which may soon be approaching) and whilst the US is performing reasonably well at present, Friday’s poor jobs report could be a sign that things are not all as good as could be. If looking to sell USD for the EUR, I think it may be worth holding on to see what happens in the coming weeks. The US dollar accounts for over 80% of all currency transactions so any big moves here will have a massive effect on the rate.
The current economic climate is still very fragile, particularly in the Western economies, Europe in particular. If Greece has to leave the Euro or there are further unexpected economic and political developments in Europe, you may find things get much much worse. Have you planned for the worst? This site has is for information for anyone looking to make a currency exchange. Working as specialist currency brokers for the UK’s largest independent brokerage, this site was originally written for our clients who wanted to know what to expect on rates. If you are considering any Euro trades (or any other currency) and would like some specific information relating to the transaction you need to undertake please feel free to make contact on jmw@currencies.co.uk or 01494 787 478, quoting ERF.
Could the Euro really collapse? Key date for the Euro..
Navigating Euro movements at the moment is akin to going potholing without a torch. You can never be sure what may be around the corner and just when you think you have overcome an obstacle, yet more present themselves! The latest Euro issue concerns the private bondholders of which 75% need to agree to take a cut of over 50% in the value of their debt. Sources tell me this is all a ploy to improve their bargaining position however and it looks more than likely this will be pushed through…
…the Euro is reasonably stable this morning at just under 1.20 with sterling, just above 1.32 buying dollars. Market data later could change all this quite quickly though…
The deadline on the private bond swap is 20.00 tonight but if announced sooner we could see the Euro strengthen, although as I say it does appear to be a done deal and as such the announcement may be priced in.
Perhaps less newsworthy, but more important for me is ECB President Mario Draghi’s speech following the ECB interest rate decision at 13.30. No change is expected for the Euro or UK interest rates today, but we often see volatility around this time and considering all the problems for the Euro at present, Mario’s speech could be telling.
Cental bank Interest rates are hugely important to exchange rates. Generally speaking the higher an interest rate, the stronger the currency. This explains sterling’s general weakness in recent years and the Euro’s strength for the summer of 2011. Those with Aussie dollar interests should note this is why the Aussie is at all times highs against most currencies – it has one of the highest interest rates amongst the leading economies. These monthly decisions have the power to move the market and mere speculation of a possible rate cut or hike, even if months down the line, can cause unexpected corrections on exchange rates as investors move money according to sentiment. Understanding what is happening could well save you money on your transfer as it makes more or less likely that your desired level will be hit.
If you find yourself scracthing your head over the Euro or are unsure about all of the events driving the Euro we can help explain what is happening and how you can protect yourself.
We write this blog to keep the public aware of events that could move their rate, so they can put plans in place to ensure their transfer is done at the best rate possible. If you are planning to move funds in the future and are not sure if you are getting the best rate or how to proceed, why not speak to me direct on jmw@currencies.co.uk
For anyone looking to make an exchange we are award winning currency brokers who can help with not only the very best exchange rates, but also assistance with the timing of your transfer.
I look forward to hearing from you to offer a second opinion, check you are being offered the best exchange rate and in answering any questions you may have on moving money internationally and how to get the best exchange rates.
Euro Posts Strong Gains against USD and GBP
Yesterday the Euro posted strong gains against the US dollar and Pound, but is this trend likely to continue? For those buying Euros with either dollars or pounds do not be too alarmed as rates are still within 2 cents of near 18 month highs and still represent some good buy opportunities. For those selling Euros is this the light at the end of the tunnel many have been hoping for? The market is still waiting for a resolution to the ongoing Greek debacle and the burning question is will an agreement be made? Much of the problem is that the powers that be in Greece are very much stuck between a rock and hard place, with elections in April the hard austerity measures and public cuts proposed will do little do enhance the support of the public, but with the deadline for potential default drawing ever closer (20th March the official date for its next tranche of bailout cash to meet a €14bn debt payment is required) surely these measures have to be taken? In my opinion an agreement will be reached and I would expect the Euro to gain following this, certainly against the USD.
To me USD/EUR movements are easier to try and forecast as the dollar will tend to track the mood of investors and global economic confidence as a whole. Since the talks in Greece have developed and hopes increased that a deal can be reached over their debt burden, the dollar has weakened nearly 4 cents against the Euro and I would expect this trend to continue, particularly with Ben Bernankle (head of the Federal Reserve) indicating US interest rates could remain at their current level until 2014, for this reason I can see a move back towards 1.35.
For EUR/GBP I am not so clear. Yes the argument remains the same that should a deal in Greece be finalised a move in favour of the Euro could be seen, however the UK economy is, although posting some poor GDP figures recently, also posting some stronger than expected data of late. Fpr example recent PMI manufacturing data indicated growth in the manufacturing sector, and a recent survey from the Recruitment and Employment Confederation (REC) showed permanent staff replacements in January rose for the first time in four months. Should the Bank of England take note of this and decide to delay the potential for a proposed £50bn cash flow injection tomorrow at 12:00, then the short term movements for the Euro could be eradicated. I do feel this pairing is on a knife edge and arguments can be made for movements in either direction.
Should you wish to remove the unceratinty in this extremely volatile market then contact me directly at mgv@currencies.co.uk and I will run through the numerous contracts you can utilise to try and maximise your exchange.
Will the Euro continue to weaken?
With all the recent political events in Europe concerning new Prime Ministers for Greece and Italy it could well be that we are about to enter a new phase of Euro strength. Anyone buying Euros has spent the last few years waiting for a major burst of weakness to occur and whilst we have seem some fairly favourable movements, many clients are sitting perched waiting for the hallowed 1.20 and more.
So why despite current events in Europe is the rate still relatively speaking quite bad for buying Euros? Last summer when Greece first started to really hit the headlines we saw GBPEUR boost to 1.20 plus. We also briefly touched 1.20 earlier this year but aside from a spike in the last few weeks we have spent most of the year closer to 1.10 than 1.20… Will the Euro continue to weaken? Well personally I would have to say no…
Interest Rates – With the Eurozone interest rate at 0.75% higher than the UK’s 0.5%, the Euro as a currency is more attractive to investors as it offers better returns in the money markets. This ‘interest rate differential’ is a key driver of exchange rates in general. Interest rate differentials explain why the pound is so weak against many currencies. With UK interest rates at 0.5% (and set to remain there for some time) the pound is suffering.
The Eurozone Crisis – Whilst you may expect this to weaken the Euro and indeed it has, the effects of the Eurozone crisis are being felt on the pound. The UK relies on Europe for 40% of it’s trade so a weak Eurozone will hamper the UK’s efforts to restore growth. Also the UK banking sector is majorly exposed to the crisis so if Greece and other countries default on their debts it will weaken the UK’s banking sector and hence the economy.
The UK is suffering – Unemployment data out today showed Unemployment at it’s highest since 1996. Unemployment is massively detrimental to an economy. It leads to less retail spending, less tax generated for the government, increases in the benefits paid and a slowdown in the housing market. The list is quite extensive and underlines the problems faced by the UK.
So the rate, whilst much improved (trading levels in Q3 dipped to 1.10!) is unlikely to continue to climb much further at present. There are many obstacles and whilst I still believe the Euro crisis may move the market further, it may not be for some time yet. Current events outlined above look set to determine the short and medium term pace.
The GBPEUR and USDEUR rate is moving by as much as 2 cents a day. Other currency pairs like AUDEUR, ZAREUR are moving by even more as events shaping these currencies continue to present volatility. As specialist currency brokers we can not only secure commercial rates of exchange for private clients, we offer insight as to what may be happening and keep you updated on the movements and events that move the market. Feel free to get in touch on jmw@currencies.co.uk or (+44) 01494 787 458 for specific information relating to your exchanges. Please quote JMW and ERF. I would also be interested to hear any other points of view or take questions from anyone with questions about the above post.
Portuguese Bailout still fails to move the markets
In the wake of the Portuguese bailout the Euro has remained mercilessly strong against the majority of majors. The Euro is now exceptionally close to a year long high against the Pound and at a 15 month high against the US Dollar.
In light of the Portuguese bailout it is surprising to me that the Euro is at such high levels. Although the ECB have been the first to move away from holding their interest rates at record lows, Sovereign Debt continues to cast a rather unpleasant shadow over the entire zone.
However whilst sovereign debt continues to not affect the market I can still imagine Euro pushing a little further against both Sterling and the Greenback. If you have any currency requirement then make sure you are in regular contact with your Currency Broker to make the most of these market movements.
Euro falls nearly 1% against the USD
Euro exchange rates have fallen by nearly 1% against the USD and continued losses against the pound as concerns about the European banking system moved investors away from riskier assets and to the relative safe haven of the dollar. This has brought levels back close to the 5 year high for USD/EUR seen just last week and created some fantastic opportunities for those selling dollars to buy Euros.
