Monthly Archives: November 2011

Excellent GBPEUR rates – POUND EURO Forecast

The budget statement yesterday was pretty gloomy. With growth forecasts being revised down it looks like the UK is set for continued problems, this is highlighted quite substantially by the strikes today. Over 2m Public Sector workers will go on strike at protests against pension reforms as well as a wider protest at the lack of growth and low prospects for the future.

Amidst the doom and the gloom the pound made some impressive gains yesterday. Against the Euro we climbed close to the 9 month high touched earlier this month. This is because whilst the UK is suffering from low growth, by taking such tough decisions to reduce borrowing over the future, the UK is being seen as a kind of haven amongst countries struggling to cope with debt burdens. Yes the UK is still in trouble but by taking measures to reduce borrowing costs, the UK is setting itself up for the future. The UK now has some of the lowest rates to pay on borrowing it does need to make. Compare this to Germany who recently suffered from a major under subscription in it’s debt offerings.

Despite yesterday’s boost on GBPEUR for reasons I have previously discussed I don’t think the rate will continue to climb. Pressures in the Eurozone are weighing on the UK and as today’s strikes show there is massive discontent in the UK at the direction things are headed. Inflation and Unemployment are up whilst Growth is down. I don’t think the average Public Sector worker or man in the street really cares if UK borrowing is down, they care about things closer to home, things that don’t really seem to resonate with the current government. I think GBPEUR is well worth taking advantage of, at the very least anyone looking to trade should keep a close eye on where this goes as things are just so unpredictable.

If you are looking to make any kind of currency transaction I can help get you the very best rates. By explaining all your options you can make an informed decision on when to trade. Feel free to contact me on jmw@currencies.co.uk or why not call (+44) 01494 787 458.

Please quote JMW and GBPEURO.

Further Pressure on Germany to save the Euro

Well it is the news story that just won’t go away.. the European Debt Crisis.. which is slowly becoming the global Debt Crisis.. The Organisation for Economic Cooperation and Development (OECD) yesterday warned of a Eurozone about to enter recession and also warned of the wider risks to the UK and the rest of the world from inaction in the Eurozone. The most important thing I felt from the OECD report was the recognition that responses to the crisis were ‘behind the curve’, i.e doing too little, too late. As the largest Euro member politically and economically, I would not be suprised to see further pressure on Germany and perhaps some kind of policy response to the ongoing pressures in the coming weeks.

This could quite easily lead to Euro strength as new policy announcements are made. It is very significant that the German bond auction of last week was majorly undersubscribed and this could be the wake up call the Germans need to get this moving. Eurozone leaders are also meeting today to discuss the expansion of the bailout fund so it can help Italy or Spain. I expect some Euro volatility, currently the Euro is down against the pound, but up against the dollar.

Amidst these political decisions there are also some economic indicators that could shape the rate today. If you are looking at making any trades today or in the coming weeks please feel free to contact me personally on jmw@currencies.co.uk or +44 (0) 1494 787 458. Rates move every two seconds so don’t get caught out hoping things will move in your favour.

GBPEUR – Most importantly we have Chancellor George Osborne’s Autumn statement at 12. We have already had Nationwide house Price data for the UK showing a small improvement in house prices in the UK for the last month, helping the pound to climb slightly against the Euro.

EURUSD – Despite the uncertainty today’s talks do offer some respite in the recent uncertainty and the dollar has weakened a touch as investors move to other assets, the ZAR, AUD and Kiwi being some of the main beneficiaries yesterday. EURUSD has improved a touch on the back of hopes some kind of solution will be achieved.

If you have any currency transactions to make, today could well throw up some volatility that could cause movements for or against you. To be kept up to date of all the events that will affect the rate of exchange you secure please feel free to contact me personally on jmw@currencies.co.uk or +44 (0) 1494 787 458.

As well as writing the blog I work for one of the UK’s leading foreign exchange brokerages and can help secure the very best rates of exchange. I have never had any trouble beating not only the banks but also other sources and moreover, our sepcialist service is designed to further enhance your rate of exchange by working with you to determine the best time to execute your transactions.

Once I know what you need to do and when we can start to look at the necessary strategies designed to maximise your rate of exchange. Please quote JMW and GBPEURO.

I look forward to hearing from you.

Debt Crisis to engulf Germany?

A bond auction this morning for Germany led to the Euro losing about half a cent against the pound. The bond auction was not fully subscribed which raised investors eyebrows. Germany has been seen as the rock in the sea of debt engulfing Eurozone countries. This makes clear to me that the crisis is only getting worse and spreading, the question for anyone buying or selling Euros is how does this affect me? And more importantly when will it affect me?

Other data out in the Eurozone today was PMI (Purchasing Managers Index) data giving a snapshot of Eurozone manufacturing and services. This showed small improvements in business confidence but with both markers still below 50, there is still pressure on the recovery in the Eurozone.

The Bank of England minutes passed off without event and attention will really turn to the GDP numbers tomorrow morning. If Germany is experiencing a slowdown this could really present some volatility, although it may be shortlived since UK GDP numbers follow shortly after (see this morning’s post for full details).

I wouldn’t personally be banking on major improvements before the end of the week but if we are going to see any spikes it will probably start tomorrow morning.

If you have any trades to make now or in the future and would like some free, no obligation, hassle free information about what is driving the rates please feel free to contact me quoting JMW and ERF on (+44) 01494 787 458 or email jmw@currencies.co.uk

GBPEUR – Important Data Today and this week – Euro crisis abates as attention returns to the UK

The GBPEUR rate has dipped by over two cents since the high of nearly 1.18 last week. This is because the immediate danger of the Euro crisis has abated as new Prime Ministers installed in Italy and Greece present the possibility of change, and because the ECB (European Central Bank) have been busy buying up the bonds of Italy which has calmed the markets. I do not think this is the start of a strong Euro rally but if you are selling Euros and have been holding off due to the uncertainty, I think now is a good time to pounce.

I learned a very interesting statistic last week in relation to Quantitative Easing (QE). QE has been used by the Bank of England (BoE) and the Federal Reserve Bank of America. The idea is that the central bank ‘buys’ some of the debt of other banks thereby providing liquidity to the banks, the hope and idea being that they lend more to each other and the public. It seeks to ‘grease the financial wheels’ of an economy and acts like a shot in the arm. Growth in Western economies, particuarly the UK and US has been stagnant and it was estimated that the £200 bn worth of QE employed by the BoE in 2009 added about 1-2% to growth in the UK. Well total QE employed by the UK represents 18% of GDP. In the US the total amount of QE represents about 16% of GDP. Now here is the interesting statistic. Whilst the ECB have not undertaken any kind of QE programme their bond buying programme of distressed member states is a form of QE. This has so far only represented 0.8% of eurozone GDP however. We should not therefore underestimate the ability of the ECB to provide massive amounts of further financial support to the weaker nations, to the extent that they could be ‘covered’ until they can pay back their debts. When and if they will do this is the question. But the very fact that they can will give investors confidence.

Whilst on the theme of debt attention has this week focused on the pound. With unemployment at its highest since 1996 and inflation still at 5% the economic recovery in the UK is clearly not moving along quite as swiftly as previously believed. Growth forecasts across the board have been slashed and it is looking likely we could see some further QE in the coming months.

Important Data this week

TODAY 09.30 Bank of England Minutes – After QE was launched last month there may have been further calls for QE this month. Or was a rate cut mooted? Economic policy at the BoE has changed in recent months in response to global events. This release at 09.30 will tell us if it is going to change further. Look for news on the site after the release or call 01494 787 458 or e-mail jmw@currencies.co.uk for specific information.

TOMORROW 06.00 German GDP – 08.30 UK GDP – Growth in the Eurozone and the UK is a real focus and these releases could easily move the Euro rate.

As you can see there is a lot to move the market before the weekend. If you have any currency transfers to make, even if way off in the future it may be of interest to speak to a specialist currency broker about what you need to do. Our specialist service is designed to not just get the best rates from the market but also provide information and analysis to make your trades at key moments when the rates are faovurable.

Call 01494 787 458 or e-mail jmw@currencies.co.uk for specific information.

Please quote JMW and ERF when making your enquiries

Don’t get caught out gambling on exchange rates!

As a specialist currency broker for one of the UK’s leading currency brokerages I am very experienced in dealing with both private and corporate client’s currency requirements. What I am often asked is ‘what is going to happen?’ and in working with the client I am always keen to point out they should be realistic about their expectations and not get too carried away gambling that things will move in their favour. By letting me know what you need to do I can then keep you informed of relevant movements so the transfer doesn’t become too expensive.

The current market is extremely volatile and unpredictable and even though Greece is dominating the headlines that does not mean the GBPEUR rate is just going to jump up to 1.20. Even if Greece left the Euro it is unlikely this would happen because Greece leaving the Euro will probably strengthen the Euro! Just in the same way when peeling potatoes you can cut out a ‘bad’ bit and still use them for cooking, a eurozone without rotten Greece will be more appetising to investors…

For anyone buying Euros you have this week seen quite remarkable movements and even if you missed the boat I pointed out earlier this week it is still worthwhile taking advantage. Any kind of resolution in this mess will cause Euro strength and I personally wouldn’t be suprised to see a big announcement this weekend and rates back in the mid teens by Monday.

I have seen many clients lose thousands of pounds because they held a blind hope that the rate would continue to move in their favour. The issues surrounding the Euro are very complex and in my opinion it is now more political than economic. We are now nearly a cent and a half down from Tuesday’s high yet still a good 2 cents up from Monday’s low. Despite the UK media treating the Euro situation quite negatively, the global markets take a different view, hence the relative and in my opinion expected continued Euro strength.

With the Greek saga set to continue this weekend and the G20 summit it may be of interest to you to at least be aware of and consider all your options in these times.

If you want more information about GBPEUR movements and what is currently happening, including how to get the best rates, feel free to contact the author directly on (+44) 01494 787 458 or jmw@currencies.co.uk 

EURO WEAKNESS – ECB Cuts Interest Rates

In a not wholly suprising move the European Central Bank has cut the Eurozone Interest Rate to 1.25% from 1.5%. This 0.25% cut has given anyone still holding out for further gains from this week’s already extremely favourable movements that reason to trade. Monday morning the GBPEUR rate was at 1.1372, the high of 1.1691 touched Tuesday reflects the dramatic shift in expectations. Even with the rate cut we are still below that high touched Tuesday and I feel we won’t see any better time to trade this week. Moreover it is likely the G20 summit could cause Euro strength and make it more expensive to trade.

If you were looking to make a £100,000 transfer to Euros this week you would be getting an extra €3190 by trading at the high rather than the low. I have correctly pointed this out to many clients this week and they have traded and are very happy with the rate they received.

Buying currency can be a bit like gambling. Ultimately no one knows what the outcome is going to be. Therefore when things have moved in your favour and you have made some money – as for anyone buying Euros this week – it is very wise to take the profit. By gambling on things improving further you are risking the great exchange rates you have. Just like a gambler you may also find you that whatever improvements you get you always want more and then all of sudden when the rates drop you find yourself chasing the rate you previously ignored.

If you have any currency trades to make I can assist with the very best exchange rates. Why not try me? I have never had trouble beating not only the banks but also other sources so if you would like to discuss any of the issues surrounding your exchanges please feel free to get in touch on (+44) 01494 787 458 or e-mail jmw@currencies.co.uk

I look forward to hearing from you, discussing your requirements and making sure you get the very best rate.