The Single Currency Ends the Week on a High
by Matt V on May.18, 2012, under GBP Forecast
The euro has continued its Friday fight back and at time of writing was sitting at 1.2409 against GBP, up over a cent and a half from yesterday morning’s trading. As highlighted in yesterday’s blog, this spike is due to Thursday’a better than expected Spanish bond auctions, along with the BoE (Bank of England) cutting growth forecasts in the UK for 2012.
It must be remembered however that these are still extremely attractive buying opportunities and more proof that 1.30 on the currency pair is not a given over the coming months. It is also an ideal opportunity for euro sellers to lock in this rate of exchange using one of our forward contracts and eliminate the chance of further euro weakness over the coming weeks.
I do believe that Europe remains in a perilous position and the Greek parliamentary elections in June could well shape the short to medium-term future of the single currency, whilst on these shores it will be interesting to see whether last month’s GDP (Gross Domestic Products) are revised and the UK has in fact avoided the recession we are meant to have re-entered.
If you have an upcoming currency requirement or would like to be kept up to date with all the latest market movements then please feel free to contact me directly via mtv@currencies.co.uk or on 01494 787 478.
UK Growth Forecast Cut Plus Well Received Spanish Bond Auction Equal EUR Strength
by Matt V on May.17, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Sell Euros
Thursday has seen further euro strength, proving that Wednesday’s initial spike was no flash in the pan. I believe this has come about due to the Bank of England (BoE) inflation report yesterday, which warned of the risks to the UK from the on-going eurozone crisis and downgraded medium-term inflation forecasts. BoE governor Mervyn King also cut the growth forecast for this year from 1.2% to 0.8%. This could be seen as a potential justification for further Quantitative Easing and the markets have reacted to the news accordingly with consistent euro strength over the past 24 hours.
There was also cautious optimism over todays Spanish bond auction, where almost the full allotment of 2.5 billion EUR bonds were sold. This news brought some relief to a region beset by economic and fiscal deficiencies and offered hope to investors who were quickly losing all faith in the single currency.
It has also dampened expectations that 1.30 on GBP/EUR was a given and I now think we will see resistance at 1.25 as the markets wait for the next move, either in the UK or Europe. It has to be said however, that any further problems or default by Greece over the coming weeks will most likely see any recent euro strength wiped out.
If you have an upcoming currency requirement or would like to be kept up to date with the latest market movements then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
UK Inflation report slows sterling gains
by Steve E on May.16, 2012, under Buy Euros, GBP Forecast
Earlier today Mervin King spoke at the Quarterly Inflation meeting. He warned that the Eurozone was “tearing itself apart” and the Eurozone “storm” was heading toward the UK with a large effect on the UK Economy. As a result we saw sterling lose a chunk of its strength against the Euro, the first time in days…
I personally think that the next big day for everyone with a transfer to make is the end of the next week when the Europeans meet. This is the first emergency meeting arranged following the new governments forming across Europe. It was called so that they could voice their thoughts on the change from Austerity to growth investment that many had been voted in on the promises off. I would expect that the new governments across the continent will either make large statements of change or have gone through their figures and reviewed their promises of change, probably finding out that they cant. There is a real risk to everyone with a currency transfer to make that it could be a bit of a flop with politicians slowly falling back off their promises. If we did see this the markets could come back
quickly. Plus next week we also have UK GDP figures, UK Public borrowing and Retail figures so I would be highly surprised if GBPEUR ended as high as they are now next week.
For more information on the future of the euro and how this could change how much money you get contact an expect, either call us directly on 01494-725353 or email me at hse@currencies.co.uk
German GDP Figures save Europe from Recession but the Single Currency Continues to Struggle
by Matt V on May.15, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Sell Euros
The eurozone narrowly avoided falling back into recession today, after recording zero growth for the first three months of 2012. These figures came in stronger than expected, primarily because the German economy grew by 0.5%. The final quarter of 2011 showed that the eurozone has contracted by 0.3% and many analysts were expecting further negative figures, following the downward spiral the EU seems to be engulfed in since the turn of the year.
The currency markets initially reacted positively to the news and the euro even managed to push back through 1.25. However, in line with recent market trends this spike was quickly eroded and at time of writing GBP had pushed back up towards 1.2550.
This just proves that quite frankly there is no investor confidence in the single currency or the EU region in general at present and any euro strength seems to be coming in these short spikes. Whilst I do feel Sterling is being over valued due to the well documented problems in Europe, I cannot say with any confidence that the EUR is on the verge of a consistent recovery against sterling.
For all those holding off for 1.30, it is worth considering how high our government will actually let GBP go against the EUR . We have to remember Europe is our largest trading partner (over 40% of exports) and any continued rise for sterling against the single currency will seriously hamper our ability to trade, as goods will be too expensive for economies already struggling with high unemployment and poor growth prospects. Personally, I feel they will talk down our economy in order to dampen expectation and hopefully keep the pound at a reasonable level against the euro, in order to not alienate the region our exports rely on the most.
If you have an upcoming currency transfer and would like to access our award winning rates of exchange, or you require any market information or analysis, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
Sterling climbs to new high as Greek Government fails again
by Steve E on May.14, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Other Currencies, Sell Euros
Today the GBPEUR rate hasclimbed over 1.25 for the first time in nearly 4 years. This is after thenews that the Greek Government walked away from talks aimed at forming a coalition Government for the third time in as many days. They now have a number of days left to form a Government before another general election will be called. This election many experts are thinking will give the power to the people as to whether they stay in the euro or not, and could theoretically bring down the euro state. It is this level of uncertainty that has resulted in both the euro being sold off and risk appetite being lost by investors.
Why is that important?
Well investors risk appetite has a massive effect on currencies with a large interest rate and there are many. The ZAR, AUD, NZD to name a few. Investors put money into these currencies to earn well of the interest earned when their risk appetite is high, when not the money is pulled back and this European story is as big as it comes. Money has been flying back with a dramatic change to currency rates as we have been mentioning for the last few days. I personally would expect this uncertainty to continue with rates continuing to climb for most positions selling GBP other than the USD. The Europeans next crunch meeting is the 24th and should be one for everyone with a currency transfer to be aware of.
If you want to speak to a currency specialist about your situation before this event feel free to contact
us here on 01494 787 478 or email me directly at hse@currencies.co.uk
PMI Service Data and Unemployment Predictions Keeps Pressure on UK Economy
by Matt V on May.04, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Sell Euros
Yesterday UK PMI (Purchasing Managers Index) Service figures were released and made for fairly grim reading. They showed a contraction down from 55.3 last month, to 53.3 this month. This set of data is considered key for the UK, as the services sector makes up two thirds of the UK’s economic output. This proves that whilst Europe does seem to be suffering on a grander scale, the UK still has a long way to go until it returns to economic stability.
There was further bad news as a report released by The National Institute of Economic and Social Research (NIESR), predicted that the current UK unemployment rate will rise from its current rate of 8.3% to almost 9% by the end of the year and could do “permanent damage to the UK’s productive capacity”. It also predicted growth would be close to Zero and if this ends up being the case, then I feel GBP will be handicapped against the single currency to some extent over the coming months.
However, these figures are not yet official and even if they were, 9% unemployment, whilst clearly a major concern, is dwarfed by Spain’s (24.1%) and Greece (21.7%) and in my opinion the threat of contagion within the Eurozone is the biggest fear factor amongst EU leaders and private investors alike.
A move through 1.24 within the coming weeks is not out of the question but any further negative data in the UK, coupled with a more structured European economic plan, could see rates snap back to the 1.20 region as quickly as they have moved beyond it.
If you have an upcoming currency requirement or have any queries about the markets then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
Spanish Double-Dip Recession a Boost for the Pound
by Steve on May.01, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Other Currencies, Sell Euros
Spain officially slipped back into recession yesterday as their most recent set of GDP figures announced that their economy had contracted by 0.3% in the first quarter of 2012.
In addition to this Spanish retail sales fell by 13% and unemployment hit a staggering 24.4%.
Spain’s second period of recession is the latest significant headache for the Eurozone following the PIIGS needing financial assistance throughout most of 2011 and Greece’s repeated bailout packages in the latter part of 2011 into 2012.
Unfortunately it doesn’t seem to be the end of the line for problems in Europe as I would expect to see similar issues later in the year for Italy, Ireland and Portugal.
The recent economic turmoil in the Eurozone has led to a purple patch for GBPEUR rates with us seeing a series of 20-month highs despite poor economic data also coming out of the UK.
For those of you needing to purchase Euros now or in the future this may be a good time to consider the merits of a forward contract – these allow you to lock in and secure rates for anything up to 2 years’ time while only having to put down a small percentage of the contract value as a deposit. This allows you to accurately budget for purchases and projects such as property purchases, renovations, school fees, weddings, business costs among many others.
For more information about this contract type or to discuss the best solution for your specific circumstances feel free to email me, Stephen Hughes, directly at sah@currencies.co.uk
The Slide of the Single Currency
by admin on Apr.27, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Other Currencies, Sell Euros
As the week draws to a close the markets are left to reflect
on what has been described by many as the beginning of the end for the Eurozone
and its single currency. As financial Armageddon bears down on the Spanish
economy and investors run for cover, I have to ask myself which twist this
Greek tragedy will take next. In fact, it is now probably better described as
the sinking of the Spanish armada and any default by Spain would not only cripple
the country’s economy but ensure contagion spread through the whole EU region.
One by one country’s economy’s would contract and they would
no longer be able to help bail out their counterparts, or worse, decide that
any default of their own was better than paying years of high interest debt.
For this reason I believe that the key European leaders will continue to make
the ‘right’ noises about the necessary austerity measures and bailout funds
that will help stop the markets going into complete panic.
Personally I feel that whilst Europe is suffering, the UK is
not far behind. Yes our economic data is improving but we are so interlinked
with Europe (they are our largest trading partners by some distance) that any
long-term recession there would hinder our ability for economic growth.
I now feel any move back down below 1.20 is highly unlikely
in the short-term, although those waiting for 1.25 should heed my warning
above, as the UK will ultimately be affected by any long-term economic
contraction in Europe.
If you have an upcoming currency transfer, or
would like an up to date analysis of current market trends, then please feel
free to contact me directly at mtv@currencies.co.uk
or on 01494 787 478
Good GBP Euro Exchange Rate Despite Recession In UK
by Colm on Apr.27, 2012, under Buy Euros, GBP Forecast
Despite the UK being officially back in recession this week, sterling euro rates are still the highest we have seen since 2010 (and close to levels last seen in 2008). Whilst the pound did drop very sharply on Wednesday following the ONS announcement that the UK is back in recession and the worst was feared for the short term future of the pound, it has since rallied back due to a combination of factors.
Firstly the original expectation was that the UK would avoid recession and the figures of contraction came as a slight surprise. However it was not as if the UK economy was expected to be booming with forecasted growth being a measely 0.1%. Many economists believe this initial GDP announcement will subsequently be revised up as more data becomes available making this the recession that never was!
Secondly, problems in Europe still persist with Spain having its credit rating downgraded by one of the ratings agencies, The Netherlands in political paralysis, and the slight favourite for the French Presidency (Hollande) threatening to bash the markets. The level of UK recession is incomparible to that being experienced in countries like Greece with the UK’s last quarter at -0.2% as opposed to worse than -7%. As such sterling currently represents the lesser of two evils. Watch out for US GDP data this afternoon to see how this affects global confidence- a strong showing may boost the pound.
With exchange rates knocking on the door of 1.23 it represents a great buying opportunity so if you need to buy Euros then why not get in touch and ask about our currency exchange services? Simply e-mail Colm at cmg@currencies.co.uk and quote GBPEUR in the subject m
UK in recession…..a reaction?
by Steve on Apr.26, 2012, under Buy Euros, Eur Forecast, GBP Forecast
After the initial shock following yesterday’s announcement from the Office of National Statistics that the UK is officially back in recession, where we saw the Pound quickly lose around 0.5% against most major currencies, Sterling seems to have recovered quite pretty well starting the day only half a cent away from the recent 20 month high against the Euro and just touching 1.62 ( a 6 month high) against the US Dollar.
In my mind the reason for the Pounds continued strength could be one of two things. Firstly, the recession may not be all that it seems, the GDP announcement made yesterday is only based on 40% of the data required to get an accurate figure and as a result may be wildly inaccurate, we will know much more when we see the revised figure on 24th May which takes into account over 80% of all appropriate data – I’m fairly confident that we may see a positive GDP figure within a month’s time.
Secondly, the move into recession is only a small one, the expectation was only for 0.1% growth so in reality the difference was only 0.3%, not exactly a crippling shift! When compared to the extensive and continued problems in Europe (read: Spain recently moving into recession and most likely needing a multi-million Dollar bailout) and the US not forecasting any increase in interest rates for another 2 ½ years then the picture for Sterling looks a lot more rosy. Don’t get me wrong I’m not saying for 1 minute that the UK economy is thriving and will continue to grow in the months to come – I just think we need to sit back, take a bit more perspective in and look at what the numbers really mean!!
The Pound may well stumble along between 1.20 and 1.25 for the next few weeks, but is that a bad thing? If you ask anyone who had to buy Euros in the last 2 years I think you would have a unanimous vote of no, in recent times buying above 1.20 is certainly a luxury and not the norm and shouldn’t be taken for granted.
If you would like to talk to me about the markets or your specific currency requirements feel free to call me on 01494 787478 (don’t forget to ask for Steve) or email me at sah@currencies.co.uk. I look forward to hearing from you.
GBPEUR at 20 month high
by Steve on Apr.19, 2012, under Buy Euros, Eur Forecast, GBP Forecast
The Pound hit a 20 month high against the Euro yesterday following the Bank of England’s minutes which suggested that the likelihood of further Quantitative Easing being used to stimulate economic growth in the UK is diminishing.
This, combined with an unexpected drop in unemployment numbers led to the Pound spiking to within a cent of the highest levels seen since the Summer of 2010 (now doesn’t that seem like a lifetime ago!!).
At times like this human nature often gets the better of us and we instinctively hold off in the hope of rates going up even further but let me give you a little word of warning. Firstly, as much as we have seen a string of pretty good economic data releases for the UK, which has led to this recent spike, the key release this month isn’t due until the 25th April in the form of the latest UK GDP figure. This is a measure of the growth (or lack of) the UK economy saw during the 1st quarter of 2012 – more importantly a negative figure will confirm that the UK is back in recession. As you can imagine, a poor figure could be pretty catastrophic for the Pound!.
Secondly, have a look at the facts below when the Pound has hit highs against the Euro recently:
- November 2008, rate 1.21 – 1month later GBP fell 15.7%
- August 2010, rate 1.22 – 3 months later GBP fell 8.7%
- Jan 2011, rate 1.20 – 4 months later GBP fell 8.3%
I really think they speak for themselves!
As a currency brokerage we have a range of tools and mechanisms available to help you take advantage of times like this should you need to but Euros now or in the future. For more information of just to ask me about any aspect of the currency market feel free to call me on 01494 787478 or email me directly at sah@currencies.co.uk.
GBPEURO.. Which way will it go?!
by Jonathan on Apr.13, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Other Currencies
The GBPEUR exchange rate is knocking on the door of the best levels we have seen all year for anyone buying Euros and in my opinion well worth taking advantage of.
You see the problem with the pound over the last few years is confidence. With much of the UK’s industry and manufacturing having been moved offshore, the last decades growth was fuelled by global demand for UK services. Banking and Insurance were the real big hitters and with these areas still licking their wounds, quite possibly for years to come, it is unlikely the UK will make any major leaps and bounds forwards. The strength of the pound depends largely on investors confidence in the economic outlook for the UK, hence the pound will remain fragile for many more months and even years. Therfore if looking at GBPEUR thinking things can only better, you may want to take step back a nd reassess your position. If you are unsure about what is driving the rate I can personally assist you with information, just drop me a mail on jmw@currencies.co.uk
When moving money internationally the better your exchange rate, the more you get for your money…
This may sound obvious but everyday millions of pounds is lost because people do not shop around for a decent rate. They just go through their bank and accept whatever the bank teller offers them. How do I know this? Because I work as a Senior Currency Dealer for one of the UK’s largest currency brokerages. We specialise in commercial exchange rates and can offer this to private clients who need to transfer money electronically from bank to bank. Our business offers a highly personal service which will seem like a breath of fresh air compared to your bank.
So if you are looking to buy a property or pay an Invoice to a foreign bank account, why not check with me or the site to see if a better deal is not available? We could save you thousands…
This website is a labour of love by my good friend Daniel Wright, an Associate Director at the company we both work for. Everyday we save new and old clients thousands of pounds by beating the banks and other sources. How can you do this I hear you ask? We trade about half a billion pounds a year and can source an extremely sharp commercial rate of exchange, the savings of which we pass on to you. We make our money on the difference between where we buy and where we sell. Simple.
If you would like to learn more about how it all works, GBPEUR or any other currency pairing trends, please email me, Jonathan Watson on jmw@currencies.co.uk and I will be in touch immediately
Thank you 
Where next for GBP/EUR rates / Greek debt swap deal reaches pivotal point / Further QE in the UK?
by Matt V on Mar.07, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Sell Euros
GBP/EUR rates have been hovering just below 1.20, as markets wait for confirmation that Thursday’s deadline for the Greek debt swap with its private creditors will be met without any further surprises. This debt swap will enable Greece to immediately wipe over 100 billion Euros off its national debt and is essential if the country realistically wants to remain part of the eurozone and its single currency. If this deal goes through we could well see some initial Euro strength, although I do not feel it will be enough to push rates much below 1.19.
It has been estimated that a Greek default could cost the Eurozone 1 trillion Euro’s, a startling figure considering the current levels
of debt the region holds. Contagion from Greece would threaten some of Europe’s largest economies, including Italy and Spain as further, potentially unobtainable bailout packages would be required. Therefore, if there is any delay in this agreement I think the markets will panic and we could well see levels push through the 1.20 resistance barrier and settle around the 1.21 mark.
In the UK the British Chamber of Commerce has predicted that the UK will avoid recession and the BoE (Bank of England) will not need to continue its QE (Quantitative Easing) programme. Even though growth forecasts for 2012 have been cut, we could certainly see some Sterling strength off the back of this report if indeed it turns out to hold some truth.
If we were to couple the two scenarios, whereby Greece do agree terms with their private creditors as well as the BoE confirming there will be no further QE in the short-term, then I believe we will see levels remain in the 1.20 region.
If you have any currency requirements, or would like an update on the current market movements then please feel free to contact me directly on mtv@currencies.co.uk.
EUR Recovery / GBP/EUR Forecast / Greek Solution?
by Matt V on Feb.27, 2012, under Buy Euros, Eur Forecast, GBP Forecast
Monday has seen some positive movement for GBP/EUR, although
not enough to erode the recent declines against the single currency. Levels have pushed back up to a high of 1.1844, after starting the day at 1.1780.
Markets had reacted positively to news that the Greek bailout package had finally been agreed and subsequently we saw the Euro gainover two cents against Sterling, with the single currency trading at its highest level since November of last year.
Whether this was a false dawn or not only time will tell and I believe there is still an air of caution amongst investors when it comes to the Eurozone, as every positive announcement over recent months has seemingly been followed by a negative one. Investors will need to see further evidence that the austerity measure put in place by the Greek government are actually instigated and personally I feel that Greece may well still default on its debts before the year is out.
The fact is it will be very hard for the Greek government to increase the austerity measures that have been agreed upon, if Greece does struggle again with its repayments. They are already very severe and are causing huge unrest amongst the Greek people, who quite frankly will not accept any further cuts to an already debilitated economy.
I feel that GBP/EUR levels could continue to hover around the 1.1850 mark as the markets wait for the next move in Europe or some consistent positive data from the UK, which may not come until at least Q2 of this year.
If you have any queries about the current markets or have
any currency requirements then please feel free to contact me directly on mtv@currencies.co.uk
Quantitative easing weighing on the Pound
by Steve on Feb.24, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Other Currencies, Sell Euros
GBPEUR rates fell to a 10 week low yesterday as markets began to accept that the Bank of England may have to resort to further phases of Quantitative Easing to boost the UK’s ailing economic recovery.
Rather than the £50bn injection seen earlier this month being “just” approved it appears that 2 of the MPC’s 9 members voted for a larger, £75bn investment, fuelling speculation of further intervention later this year.
With recent inflation figures showing a fall to 3.6% and with the Bank of England forecasting that we may well be below the target 2% target by the end of the year it gives the MPC much greater flexibility in their decision as to how to maintain and boost the UK’s economic recovery.
Quantitative easing has been and continues t be the Bank of England’s preferred stimulus method and there is little to think that they will veer away for this course of action – but for Euro buyers the bad news is that each time they do Sterling loses ground against all major currencies, especially the Euro!
With problems in the Eurozone starting to make their way off the front page we could be in for a period of Euro strength (GBPEUR rates going down), making Euro purchases gradually more expensive. If you have requirements coming up and are increasingly concerned about this change of tide then please get in contact with me by email at sah@currencies.co.uk where, by looking at your specific circumstances we can discuss tailor made solutions to protect yourself against adverse market movements.
Greek Deal Finalised,Euro push,GBP/EUR Forecast
by Matt V on Feb.21, 2012, under Buy Euros, Eur Forecast, GBP Forecast, Sell Euros
Greek Deal Finally Pushed Through
Last night after marathon talks in Brussels, Eurozone
Finance Ministers finally thrashed out a deal that will see Greece receive its second bailout package of 130 billion Euros. Greece will now receive the loan payments but more importantly have approximately 107 billion Euros of the debt written off. In return for this bailout package the Greek government must cut its debt dramatically from 160% to 120.5% of GDP within eight years and accept a permanent EU economic monitoring system, to ensure that the problems they currently face are not repeated.
This second bailout is essential in order for Greece to make its maturing loan repayments in March, avoid defaulting on its debts and ultimately save itself from bankruptcy. Whether this is the first stage of real recovery or just a stay of execution only time will tell but the currency markets have reacted positively as we saw GBP/EUR levels move sharply down under 1.20, with levels even touching 1.1897 for a short time. This indicates the markets finally have some confidence in the deal and expect it to be passed by the Greek government tomorrow.
Personally I think the markets are waiting for further
confirmation that the Greek ‘situation’ has come to some sort of conclusion and if this is the case and on the back of the poor unemployment and inflation figures that have been released in the UK, we could see levels push down towards the 1.1750 mark over the coming weeks.
If you have any queries about the markets or have any
upcoming currency requirements then please contact me directly at mtv@currencies.co.uk
German president resigns amid favours scandal
by Steve on Feb.17, 2012, under Buy Euros, Eur Forecast
The Euro weakened this morning following German President, Christian Wulff’s, resignation over a scandal over political favours. In his short statement he said it was impossible for him to continue in a role where he was supposed to be “a moral compass for the nation”.
The last thing Chancellor Merkl needs when she is trying to solve the eurozone financial crisis is internal political turmoil such as this – she has already postponed a trip to Rome where she was due to hold talks with Italian PM Mario Monti – and the situation in Greece is still having over the whole of Europe.
With Germany having been the “savior” of the Eurozone over many months, headlines for the wrong reasons could shake the Euro to its core and will undoubtedly delay the signing off of the next tranche of bailout money for Greece.
This could be an unexpected window of opportunity for Euro buyers to secure their currency at rates above expected levels – if you have a requirement in the coming weeks or months email me at sah@currencies.co.uk with the details and Ill keep you completely aware of market conditions.
