Monthly Archives: September 2011

GBPEUR Opportunity?

It is now looking increasingly likely that some kind of solution will be reached whatever that may be and that has certainly cooled the pressure on the Euro. That is if you believe the headlines and the rhetoric coming from some politicians. 

It is clear something needs to be done because the markets keep getting themselves in a  twist and there is no certainty over the direction of the economy and therefore exchange rates. To quote Christine Lagarde, Managing Director of the IMF, ‘We are in a dangerous new phase’ and ‘The recovery is now ‘steeper and narrower’ than ever’.

In the past we have been able to lay down predictions based on trends but current volatile trading conditions makes this ever more difficult. Whilst Germany has approved the next steps of the bailout agreed for Greece earlier this year, many more hurdles lie ahead. Another 7 countries need to ratify this particular agreement and it is clear this is another short term solution to a much wider problem.

If you are concerned with the state of the GBPEUR rate and would like to find out more information we are specialist currency brokers who can help you achieve award winning exchange rates. Feel free to call me direct on (+44) 01494 787 458 or e-mail jmw@currencies.co.uk

Swiss set minimal rate for Euro – What does this mean for the Swiss Franc?

Yesterday saw the largest movement for the Swiss Franc in its history as the Swiss National Bank decided to set a minimal level for the Franc against the Euro. Within ten minutes the CHF weakened by roughly 8% against everything as CHF was sold off rapidly by the SNB to get from 1.10 to 1.20 against the Euro, also against the Pound we saw similar movements as GBP-CHF went to 1.38 from 1.25!

Lets see what has actually happened here and what effect this may have gonig forward not just for EUR and CHF but for many other currencies too….

The Swiss are in effect saying they will buy unlimited quantities of of currency in order to keep the EUR-CHF rate at a minimum level of 1.20, personally if I had an investment in Swiss Francs and at some point I had to bring it back into Euros then why hold on now, I would sell it straight away as by all accounts the SNB say it will never get any better than this to sell…. This may lead to a large sell off of CHF in the coming weeks and months which may weaken the Swiss Franc and lead to investors looking for other places to store their funds.

On the other hand justhow much money have the SNB got to combat this??!! By decreasing the value in Swiss Francs it will increase demand, and many investors will no doubt see this as a buying opportunity which may mean that the SNB face an ongoing battle against investor appetite, the longer this goes on the more they have to draw on and do they really have a bottomless pit of money?? I don’t think so!

Yesterday saw the Pound lose ground against most majors following this, we slipped below the 1.60 mark against the Dollar as investors turned to gold (priced in Dollars) and also the Euro and antipdean currencies gained as it appears Sterling is still nowhere near the currency of choice.

Last night saw Australian GDP figures released and they came out 1% growth for their economy, much better than the 1% expected and leading to a good bit of AUD strength….. This goes to show Australiais still boxing on well in the global economic nightmare compared to the U.K showing a rather dismal 0.2%. Be aware this may lead to the AUD being fairly solid again in the near term so those of you with transactions to make may wish to think fast.

If you have a Swiss Franc mortgage, you are emigrating to Australia, you have business transactions to send overseas or any general need to transfer anything from £1000 to multi millions from one bank account to another involving a currency exchange then contact me directly djw@currencies.co.uk or by calling me during U.K office hours on +44 (0) 1494 787 462 and I will be happy to help you get the best rate along with a great level of customer service.

I look forward to hearing from you and heres to another busy day on the markets! 🙂

Non Farm Payroll data this afternoon – Big release in the States that will have an effect on all majors!

Good morning all and heres to a busy Friday afternoon ahead!

At 13:30pm we see the release of non farm payroll data for the U.S and this can be a large market mover, not only for the Dollar but also for many other currencies too.

Non Farm Payroll data covers the amount of U.S citizens in Non Agricultural employment, it is Non Agriculural due to the farming sector employment being seasonal which would effect the figures quite dramatically.

The data can be a large mover because of the following:

Predictions in advance can be a long way out and with the market moving on rumour as well as fact they do move on initial prediction and then correct themselves following the release, so you can see large swings for the Dollar following this.

The data also affects investors attitude towards risk and investing in perceived ’riskier’ currencies and  therefore having an effect on most of the major rates (GBP, EUR, CHF, AUD, NZD, ZAR,CAD), especially in the current market where I don’t feel anyone really knows exactly where to invest their funds and rates are bouncing around all over the place.

If you have a transfer to carry out in the near term, it may be prudent to seriously consider your options ahead of the release, be it a limit or stop order, or indeed a forward contract.

I can help you with all of the above, whilst saving you money on the exchange rate – contact me djw@currencies.co.uk or fill in our enquiry formand I will be happy to explain the options available to you in simple terms.

Pound Euro rate stuck in 1.12 – 1.16 range…. but for how long? Sterling Euro Forecast what will happen going forward?

My clients continue to ask me just what will happen to the Pound against the Euro and in truth, like major analysts worldwide and the majority of people if I am completely honest you just cannot be completely sure.

What you shoud be doing in this current market is looking at it from an investors point of view, why would you look to invest in either?

The Euro Zone has plenty of problems, and I am still of the opinion that at some point (could be weeks, months or even years the way things are going) something is really going to blow up within the European economies, we have seen signs of it and clearly that things are bad… but there is certainly room for them to get a whole lot worse.

Everything that the European Central Bank are throwing at the problem appears to be a short term fix, and when they run out of options I am sure we will see failures and the Euro weakening considerably as a result. This would stop me being that interested in the Euro as you never know quite when this will happen.

On the plus side for the Eurozone, they have raised interest rates twice this year, an interest rate rise is generally seen as positive for the currency concerned and a cut negative, so this has made the Euro more attractive to investors and in my opinion is the main reason it has kept strong, along with the Chinese and Swiss purchasing large amounts to up reserves and davalue their currency respectively

The U.K on the other hand has not even considered raising rates this year, and may not next year if inflation continues to naturally drop away- this will hold the Pound back in the short term I am sure of that.

What does not help is data releases in the U.K being fairly poor, our Misery Index (inflation times unemployment) being at the highest point in 17 years and our own people deciding to smash their own home towns and cities up just a few weeks ago… the cost for this further down the line will be huge and will surely effect the strength of future economic releases.

My overall opinion is that this pairing will continue to stay in this range as they battle to be best of a bad bunch with the Dollar, what you need to do if you are buying is wait for a small spike in the market and jump on it, before rates get a chance to go back down again.

I can help you save money either way when you do want to buy or sell currency, along with offering fantastic customer service, contact me today djw@currencies.co.uk or fill in the enquiry form on this page.