Monthly Archives: July 2011

Euro Wobbles!

It hadn’t even been a week from the last ‘resolution’ in the euro debt crisis and again alarm bells are ringing. The German Finance Minister yesterday stated that Germany would not keep bailing out indebted eurozone members. This was in addition to news that Cyprus had had it’s debt rating cut. Today we have had further bad news with Spain’s credit rating beuing threatend with a downgrade.

I don’t know exactly where all this is heading but it certainly isn’t boding well for the euro! Whilst the euro has weakened yesterday and today, there is still a risk that any major event won’t necessarily be of benefit to the GBPEUR rate. This is because any major event could weaken the pound since the UK has massive exposure to euro debt. If suddenly the debts could not be paid back that would harm UK banks, and the UK economy, and the pound.

If you have any euro currency exchanges to make why not get in touch to see if I can help get you a better deal? I work for an award winning specialist currency broker and have never had any trouble beating not only the banks but other brokers. If you would like to find out for free if there is a cheaper alternative to moving money internaitonally why not call me on 01494 787 458. Alternatively e-mail me at jmw@currencies.co.uk . Please make sure you ask for me and quote GBPEURO Forecast for preferential rates!

A week after Greek bailout and already question marks are raised about contagion

Only a week after the Eurozone met to contain the spread of debt throughout the EU and already markets have cause for concern that the Eurozone are going to be able to cope with their Sovereign Debt issues.

German Minister Wolfgang Schaube has voiced his opinion (joining Chancellor Merkel) that the Greek bailout was a ‘one-off’ and that this will not be repeated unless it threatens the financial stability of the zone as a whole. Germany, the largest economy in the EU have generally been viewed as cautious players in regards to supporting the peripheral countries of the zone and this statement today has led markets to believe that this integral support is beginning to wane.

This has led to Euro weakness against most majors today, including Sterling as we see GBP/EUR now sit above the 1.14 mark.

Personally I think this is an issue that is now likely to quiten down somewhat before coming to a head later this year, or early next. The Euro is still great value to sell and personally I would not be wanting to hold funds for anything longer than a month or two in this currency. Although Sterling is not the most attractive option as a currency it offers some security that is completely amiss with the Euro and so I see GBP as bullish vs the EUR in the long run.

Whether you are looking to buy or sell Euros, you will benefit from an experienced Currency Broker explaining your options. Whether you just want to clear up exactly how you can try and maximise your exchange rate or if you are simply looking for a live rate of exchage then please do not hesitate to contact the author directly on 0044 1494 787 451.

The BEST GBPEUR rates!

Despite the dramatic events of July taking what I believe could be a turn against the rate many of the gains we saw for the pound remain. Yesterday’s GDP figures highlighted that the UK’s economic recovery is edging along. 0.2% growth is nothing to ring home about, but it is a sign we are moving along in the right direction.

Looking at the huge amounts of global insecurity at present it is encouraging that the UK didn’t have a quarter of negative growth as some analysts predicted ahead of yesterday’s release. The US debt ceiling has majorly weakened the dollar and the sticking plaster that has been applied to the euro debt crisis will surely peel off soon.

If you have any currency transfers to make and are wondering what may happen on the exchange rate why not speak to us on GBPEURO to see if we can help? We are specialist currency brokers who have won awards for our rates and levels of service.

If you are unsure if you are getting the best deal I personally have never had a problem beating not only the banks but other brokers to ensure my client’s get the best deals consistently. For a free, no obligaiton discussion on the best exchange rates please get in touch on 01494 787 458 (International 00 44 1494 787 458) or use my e-mail jmw@currencies.co.uk Please ask for Jonathan and quote GBPEURO forecast for preferential rates!

GBPEUR set to fall..??

The month of July has seen some teriffic buying opportunities for Euros. Yes the rate is not as high as it was in 2007, yes the rate has been higher this year, but you have to  look at current levels in the correct context to understand why they are attractive.

The reason rates are so low historically is that the economy in the UK (and consequently the pound, since the economic state of the UK to a large extent reflects the value of the pound) is fairing pretty badly. Interest rates are at an all time low. This is important because higher interest rates attract investment. The more investment a currency receives, the stronger it will be! Would you invest your money in a currency (or country) that has question marks for the future?

The UK also has very high levels of public and private debt which is a weight around ours and the country’s necks. We no longer have the strong manufacturing base that has guided us through previous recoveries and the range of austerity measures employed by the government looks like it could be crippling growth.

Following the short term resolution in the Eurozone debt crisis last week, the euro has strengthened. Tomorrow sees the release of UK GDP figures (revision 1 for Q2) which I expect will show a fall in the rate of growth for the UK. The euro crisis hitting the headlines earlier this month allowed the interbank level to go from 1.10252 to 1.14661 and despite the poor GDP predictions for tomorrow and last week’s emergency Greek funding the interbank is still favourable at 1.13232.

We therefore have 67% of the gains made this month remaining. Why get caught out gambling on exchange rates? We are specialist currency brokers who have won awards for our rates and can assist both private and commerical clients manage and limit their FX exposure. Don’t believe me? A recent independent survey reported in both The Independent and Yahoo Finance showed we were offering the best rates!

http://uk.finance.yahoo.com/news/Overseas-property-purchases-tele-3919267471.html?x=0

http://www.telegraph.co.uk/expat/expatnews/8659209/Overseas-property-purchases-affected-by-poor-exchange-rates.html

If you are interested in learning more please get in touch making sure you quote GBPEUR Forecast. Please email jmw@currencies.co.uk or call 00 44 1494 787 458.

BofE minutes today – Euro gains

The Euro has gained this morning as the market prices in the chance that QE will be mentioned in the Bank of England minutes. Sterling has lost this morning against most majors and is currently 0.4% against the Euro.

If QE is mentioned in the minutes this morning as a likely outcome of upcoming meetings then this is likely to continue to fall rather dramatically. However if mentions of QE are hushed then we could see GBP/EUR rates retrace slightly throughout the day.

Looking forward to later in the week we have a meeting in Europe on Thursday which looks to try and settle some of the sovereign debt issues. Merkel has suggested that it is not going to be one big event that will solve everything but a series of events. This isn’t likely to do any favours for the Eurozone who look like they are going to have this hanging over the head for some time.

If one thing is for sure it looks like it will be a volatile end to the week on GBP/EUR and my guess is that both good buying and selling opportunities will present themselves. Feel free to fill in an enquiry form if you are looking to make an exchange and one of the senior currency brokers who work on this site will be in touch to provide you market commentary.

Euro Stress Test results tomorrow should set pace for next weeks movements

GBPEUR has experienced tremendous volatility in the month of July and I would expect this to continue with many more data releases and events to sway the markets. Unsuprisingly the debt crisis has a lead role in this feature and a sign of the direction that it could take may be provided tomorrow.

The European Banking Authority releases results of European Bank Stress Tests. The idea is to simulate economic turbulence on the markets which could potentially harm the banks and hence the global economy.  Capital reserves will be one of the key topics. Capital reserves refer to funds that are available or can be made readily available through a liquidation of assets. One of the major problems in the 2007-8 banking crisis was the vacuum left by the devaluing of investments such as US sub-prime mortgages. Banks around the world who ‘bought’ this debt and used it for other investments soon found they didnt have enough capital to cover other activities and the dominoe effect caused global financial meltdown.

The last round of Stress Test resulted in cries that they were not stringent enough. Considering the world is watching what happens in the Eurozone with a magnifying glass it will be very interesting to see what type of approach is taken here. The sterling euro rate has fluctuated by over 3.5% in less than a week. If you were transferring funds abroad or bringing funds back to the UK this is going to have dramatically affected the currency you would have bought.

We are specialist foreign exchange brokers who have have been in business for over ten years and won awards for our exchange rates. To have a chat with a specialist who can advise you of all the ins and outs of transferring funds abroad why not fill in the contact form and we will be in touch shortly.

UK inflation means Sterling retraces gains – Unemployment figures key today

UK inflation, or CPI (Consumer Price Index) was released yesterday and contracted 0.1% MoM. This meant that YoY inflation fell from 4.5% to 4.2%, although this is well above the Bank of England’s 2% target inflation was expected to hold steady and this has meant that an interest rate hike in the UK now seems even further off. On top of this there have been numerous different predictions on Q2 GDP figures for the UK, none of which have come in higher than 0.2% which does little to suggest otherwise.

There is almost a sense of deja-vu in the markets as at the start of 2010 there was speculation of when we will raise rates that year, something that failed to come to fruition. This has been repeated again this year, leaving a sour taste in the mouth for anyone looking to sell Sterling, the UK were heavily tipped to raise rates before Europe, who have now pushed their base rates up a quarter of percent twice already this year.

UK Unemployment figures are likely to dictate GBP/EUR today, although these are expected by the market to remain stagnant I personally would not be surprised to see a small rise in the rate which could lead to some GBP weakness this morning. Interestingly the Euro has gained nearly half a percent already today, which could be market sentiment pricing a possible unemployment rise into the market.

If you are looking at making a money transfer, either to buy or sell Euros or Sterling and are confused as to how these events may effect the value of your money be sure to contact a dedicated currency exchange broker. Each person that works on this website is a professional currency broker based at a leading independent Currency Brokerage in the UK. Fill out an enquiry form today and someone will be in touch.

GBP/EUR close to a month high this morning

GBP/EUR had a good start for the third day in a row since the interest rate hike last Thursday and pushed very close to a month long high.

The Euro is now really coming under strain from the PIIGS of Europe, as Italian Sovereign Debt – one of the ‘PIIGS’ that has managed to avoid much media spotlight has really come under fire.

There is now talk that the European Stability Fund may have to be doubled in order to be able to potentially bailout Italy, the third biggest country in the Eurozone.

This really goes to highlight how much pressure the Single Currency is under – despite raising interest rates last week and the UK releasing lower than expected inflation figures this morning (4.2%, 0.3% lower than expected), Sterling has still gained.

Whilst I think this is unlikely to go a lot further in the Short term, due to the UK’s own economy and underpinned strength in the Euro from a higher interest rate (a differential of 1%) and strong economies in Germany (in particular) and France – comparitively at least to the PIIGS and the UK. I think the current Euro weakness acts as a glimpse into the future. I wouldn’t expect the Euro to remain below the 1.20 mark forever – even though it may be until the start of next year that Sterling sits comfortably above that mark.

So what to do? If you are looking to sell Euros keep your finger to the pulse to take advantage of what are still historically very good rates, although if you are buying in the next few months you may want to take advantage of this spike which has seen GBP gain nearly 4 cents against the EUR in only a week.

Interest Rates raised to 1.5% in Europe but priced into market

Jean Claude Trichet and the ECB raised interest rates yesterday to 1.5%. Following Trichet’s statement that they needed to take ‘strong vigilance’ towards inflation after last months meeting speculators had guessed that rates were going to be raised this month and the Euro managed to hold strong despite Sovereign debt.

As the raise was 0.25 points, just as the market expected there was no huge reaction from the market and strangely the Euro lost ground against Sterling, before the NIESR (National Institute of Economic ad Social Research) released UK GDP predictions for Q2 at only 0.1% for the UK which caused the Euro to rally nearly a cent.

The Euro has lost 0.3% against the US Dollar already this morning in what could be a very volatile day for this pairing. Watch out for US Non Farm Payrolls – considered by many to be the most volatile economic data set.

If you are looking to sell euros some predictions are for the Euro to strengthen but rates are very attractive against both GBP and the USD if you look back over last year. Alternatively if you are looking to buy you should be looking to jump on the back of a spike in the market from economic data releases. Get in touch if you are looking at transferring any currency in the short term and speak to the author directly on 0044 1494 787 451.

Portugal has its debt rating downgraded to junk – Another chapter in the dismal Euro saga?

This makes me think that we are not far from the next round of bailouts after Greece is dealt with for a second time. I read a very interesting article on the BBC site that actually discussed how German politicians are pushing through a court case claiming that the bailouts are illegal. It is not just the German public who are disgruntled at being Europe’s cash machine, it is also many senior level politicians who resent the way this is heading.

And who can blame them? They have worked hard and ensured their economy is productive with typical German efficiency. Why should they be bankrolling countries who feel it is ‘okay’ to offer Public Sector workers 14 pay days a year, offer bonuses for washing their hands and where tax avoidance is a national pastime. I am of course referring specifically to Greece but the contrast is distinct and highlights the disparity in the Eurozone.

I read with incredulity last week of a tale in the Daily Telegraph concerning a group of civil servants who were employed in 1957 to fill in a lake for road works. Somehow they were forgotten and 17 men had been drawing salaries until late 2010 when the government asked anyone drawing a public sector salary to re apply for their job. Their silence was treated with suspicion and the ensuing investigation raised the flag to the authorities.

It’s like the lazy child in the family who you have to keep helping. Who you have to keep lending money to and doing chores for. Love and compassion will carry the indebted so far in everyones pursuit of unity, but once the burden becomes intolerable, ties can be severed that may never be repaired…

Just look at the change in Barclay’s forecast on GBPEUR, a link is contained in my esteemed colleagues post below:

http://www.poundsterlingforecast.com/2011/07/06/major-analysts-revise-down-sterling-predictions-interesting-information-below-sterling-against-euro-and-dollar-preditions/

If you have any currency transfers to make why not speak to currency specialists who work for an award winning FX brokerage. With over 11 years experience offering the best rates on the market why not speak to us? E-mail me on jmw@currencies.co.uk or use the contact form.