Monthly Archives: January 2012

EU Summit starts the week off for the Euro – Euro Weakness today

This week’s EU summit in Brussels was seen by investors as a key indicator for the growth
prospects within the region, with the focus heavily on Greece and a potential
deal with its private investors. Greek Prime Minister Lucas Papademos tried to
reassure the majority that a deal should be reached by the end of the week but
the truth is, as the second day of the summit draws to a close, we are no
closer to that deal. This has been reflected in the currency markets, as levels
pushed above 1.20 earlier this afternoon and look to be holding firm.

This is a primeexample of how difficult it is for analysts to currently predict GBP/EUR rates and which direction the currency pair will take, as the negative data in the UK
and poor growth prospects are continually countered by the on-going problems of
countries debt levels within the Eurozone and more importantly their ability to
recover.

Some short term confidence did seem to be returning to the single currency and with 25 of 27 member states agreeing to yesterday’s fiscal pacts (this treaty enforces the memberstates not to have a bigger debt ratio than 60% of that countries’ GDP),
any confirmation of a deal by the Greek government with its private investors
would of in my opinion pushed levels down through the 1.19 resistance barrier
that we have seen of late.

EU leaders
claimed that this week’s summit was not purely focused on the Greek PSI
negotiations and the focus would be as much on the stimulation of growth and
employment in the region. However, the Greek debt swap deal is a crucial issue
and important element in combating the debt crisis and a lack of agreement
means there will be no further bailouts for Athens, which will in turn lead to
Greece going bankrupt and could pose a serious threat of contagion to the rest
of the EU.

If you would like an update on the current market trends or you have any upcomingcurrency requirements, then please contact me directly on mtv@currencies.co.uk.

What will move GBPEUR this week?

January was a pretty dire month for the pound against all currencies except the Euro and in the latter part the US dollar. Holding onto many of the gains made over the Festive period, the pound touched 1.2160 at best, crerating some excellent buying opportunities but worrying the many thousands out there selling Euros.

As discussed the rate has been quite range bound this month although it has definitely improved for Euro sellers in the last week following a raft of sterling negative data, and signs agreement may be reached in Greece. This is exactly what was predicted by our team and save for some major uncertainties rising up in Europe, I expect the rate to continue fall to perhaps the 1.17 mark in the coming weeks as the UK braces for recession and more sterling negative data.

This morning the rate is steady at 1.1950 following Eurozone Unemloyment figures at 10.4%, this is the same as predicted and shows the Eurozone employment issue is not as yet deteriorating. Indeed in Germany the Unemployment rate decreased, outlining that the biggest Eurozone economy can hold it’s own amidst the crisis.

The week ahead has three key releases for the pound, notably PMI data. Purchasing Managers Index data is a ‘snapshot’of an economy which asks Purchasing Managers in key industries simple yes / no questions. Examples include ‘Are orders up from last month?’ ‘Did you make more profit this month’. This method provides one of the most reliable and up to date indicators of how an econmy is performing and as such these surveys can really move the market. Tomorrow we have Manufacturing PMI, Thursday Construction PMI and Friday Services PMI. Tomorrow we also have all three for the Eurozone, so anyone looking for some movement in the short term could see it here.

With both the UK and the Eurozone looking on the cusp of a recession, it would not be suprising to see both currencies take a hit. The pound is really struggling against all currencies save the US Dollar and Euro so do be aware we could see things change quickly. If you are selling Euros you may start to see more favourable rates in the short term although the fact the ECB has cut rates twice in the last three months means we won’t be rushing the 1.10 mark anytime soon.

When looking to make a currency transfer and get the best rate, you should really look to work with a good currency broker! I work for specialist broker in the UK that has won awards for our rates and services. If you have any transfers to make I can help guide you through all the ins and outs of transferring funds abroad at commercial rates. I will be more than happy to speak to anyone whether for a personal or corporate requirement. Even if you already use the bank of another company I am confident I can undercut their rates! I have never had any trouble doing this so why not check to find out? 

Please feel free to speak to me on jmw@currencies.co.uk or fill in the contact form on the side of the page.

I look forward to hearing from you.

GBP Euro Range Bound Awaiting Results Of Greek Talks

GBP/EUR is fluctuating between 1.19 – 1.20 as investors wait
for news on the Greek debt talks and data from the UK that may indicate whether
we are heading back into recession. After confirmation of negative growth in Q4
of 2011, there is a strong feeling that the UK may not be able to avoid a
double dip recession in 2012 and this would surely have a severe negative
affect on the strength of GBP.

This data would usually indicate Sterling weakness against
the single currency. I do believe we will see levels drop off to the 1.15-1.17
bracket based on current circumstances but the on-going problems in Europe and
Greece particularly, are leaving investors and analysts baffled as to the
outcome if Greece does default on its debts and ultimately leaves the Eurozone
and its single currency. This will not breed confidence in the region and in my
opinion will ultimately lead to a European recession.

To break it down, we have the UK releasing poor growth
forecasts, with high inflation and potentially on the verge of a double dip
recession. Unemployment is at a 17 year high and the feeling is that we have a
long rocky road to recovery. On the other side we have Europe, our largest
trading partner on the verge of a region wide recession if Greece defaults on
its debts. The outcome of this for the single currency has yet to be fully
understood but what we do know is that any short term confidence investors may
have had will be lost and the currency markets will be sent into further
turmoil as analysts and investors alike scratch their heads and wonder which of
the negatives will buckle first.

If you have any currency requirements or would like an
update on the current markets please feel to get in touch with me on mtv@currencies.co.uk

GBPEUR tests 2012 lows – Will the pound gain on the Euro?

GBPEUR broke the 2012 low today dangerously testing the 1.19 mark. The pound held firm and the rate has since crept up to the mid 1.19’s, but anyone who has been holding off on GBPEUR hoping for a 1.20+ rate may really need to start considering whether this will happen. With the rate sitting quite comfortably in the 1.19-1.20 level all week, it looks to me like a tough week of pressures on the pound could now be starting to affect the rate.

There is of course the deadlock in Europe over whether Greece can strike an agreement with private bondholders, this has in my opinion kept the euro weak, although any positive news could change things quickly. It is worth noting that the ECB is being dragged into this disagreement with some parties (including the IMF) arguing that the ECB should take a loss on some of it’s bond purchase of Greece. The bond buying programme by the ECB has attracted much criticism with Germany in particular keen to ensure the ECB does not become a ‘lender of last resort’. The wider political indecision over the handling of this crisis is what has caused this euro weakness, and I see no sign of it disappearing anytime soon.

GBPEUR is still balanced precariously and anyone hoping for major improvements should take note of the fact the UK economy shrank in the final quarter last year and further QE (which typically weakens the currency concerned) could be due in the next few weeks. Daily movements of 1% have been common as no one knows which way it is all going to go.

I work for a specialist currency broker and we write this blog for the benefit of anyone with a currency requirement unsure of what may happen and looking for the best deal. Ultimately I cannot tell you what will happen, no one can! But by speaking with me I can make sure you have all the information necessary to make an informed decision when you do trade. In my role as a currency broker I basically set my own rates and margins so I have no trouble being able to beat the banks and other currency sources. If you would like further information please contact me direct on jmw@currencies.co.uk 

I look forward to speaking with you soon!

When will the pound improve against the Euro?

Will the Pound recover anytime soon?

Aside from some excellent buying euro rates sterling has had a poor start to the year falling against all majors. Sir Mervyn King, Governor of the Bank of England (BoE) underlined the challenges ahead last night calling the UK’s recovery ‘long, arduous and uneven’. Hinting at further Quantitative Easing  (QE) and that interest rates will remain low Sir Mervyn laid blame on a global economy readjusting to the excesses of the past. We learned yesterday Public Sector Net Borrowing had fallen by £2.2bn in December, but that total borrowing in the current financial year was now at a record £1tn! This is despite the cuts and austerity undertaken since 2010. Such news combined with Unemployment at a 17 year high and the possibility of a UK already being in recession paints a rather grey picture for the pound. I cannot see any serious gains for the pound on the horizon, indeed things could well get worse this morning.

IMPORTANT DATAWATCH – UK GDP at -0.2% for Q4!

This news is disastrous for the UK and pound, we are moving backwards at a key stage of our recovery. Bank of England minutes from the latest policy meeting where we will learn how the members voted earlier in the month. Adam Posen, one of the policy makers for the BoE hinted on Monday more QE was ‘probable’ and Mervyn King echoed this last night. These two releases could easily trigger a sterling slide and I would not be surprised to see the pound suffer losing a couple of cents to both Euro and US Dollar, as well as other majors.  

Sterling rates particularly against the Euro look very favourable at present. Our contract options allow you to forward book rates for up to two years and insert stops and limits into the market to make sure your exchange doesn’t become too expensive. We not only help secure the very best rates from the market, but work with you to make you aware of all the issues surrounding your trades so you can make an informed decision.

If you would like a full discussion of all the events surrounding your currency exchanges I will be happy to explain further what is happening and why. Just send an e-mail to jmw@currencies.co.uk Ideally please include your name and telephone number so I can make contact to explain all your options.

GBP EUR Rate drops below 1.20

GBP/EUR has moved back under 1.20 after the short spike we
saw above this level, following Friday’s better than expected retail figures.
The Eurozone and it’s single currency is still in a precarious position however
and with Greece back under the spotlight more volatility is likely in the
coming months. The next deadline for Greece is only 2 months away, by which
point private creditors must agree to the 50% ‘write off’ sanctioned by
European leaders at the end of last year. If this fails to materialise Greece
will more than likely not received a second bailout from the European Central
Bank (ECB) and face the real prospect of exiting the Eurozone and it’s single
currency.

Those holding out for a return towards 1.10 on the back of
continued unrest in Europe  may well be disappointed and the fact that we
are still trading close to a 19 month high could be viewed as excellent buying
opportunities in an increasingly unpredictable market. Data releases and growth
forecasts in the UK continue to be poor and I believe in the short term we
could see levels move down between 1.15-1.17 before they improve.

Should you wish to get the best exchange rates for your currency transfer then feel free to contact me directly mtv@currencies.co.uk quoting GBPEUR as your subject header and I shall be more than happy to help you.

Will GBPEUR fall further?

I feel the pound is going to remain under significant pressure in the coming weeks, and the decline could be witnessed as early as tomorrow.

We have UK GDP figures and the Bank of England minutes which are both in my opinion going to be sterling negative. Why is this? Well basically the economic recovery in the UK is not strong enough to support itself. Quantitative Easing is a ‘shot in the arm’ for an economy. It helps to stimulate an economy that is suffering from low growth and despite some improved retail figures for December the UK has very poor growth. This is putting pressure on jobs (Unemployment rose to a 17 year high last week) and this in turn puts extra pressure on a government trying to combat costs.

Whilst very few embrace the coalition spending cuts, no credible alternatives are being offered in the UK, even by the opposition government. The plans will only be seen to be successful years down the line and it is clear the markets remain unconvinced too. With Europe facing recession the outlook for UK plc remains rocky and as such so do the prospects for sterling.

If you would like to make transfers at commercial exchange rates with expert analysis and forecasting to limit your exposure please feel free to contact me direct on jmw@currencies.co.uk I work for a specialist currency broker in the UK and can help explain what is driving your rate, what I think it will do and if you are interested ensure you get the best rate and protect your trading levels. I have never had any problems beating other rates, although the real saving comes from the analysis and forecasting.

I look forward to hearing from you.

Euro Strength In Early Morning Trading – IMF looking to expand? Sterling Euro Forecast

There are strong rumours this morning that the IMF
(International Monetary Fund) will be expanding its lending resources in order
to strengthen the global economy and offer it some protection from the on-going
problems in Europe. There is talk that the increase will be as much as $600
billion and will take the ‘war chest’ closer to the 1 trillion mark that IMF
head Christine Lagarde initially stated was required to ease global tension.
The aim is to have countries like China and Russia on board by the next G20 summit
in Mexico on February 20th.

We have seen some Euro strength off the back of this and
also due to the UK’s unemployment rate rising to a 17 year high yesterday. This
is the highest level since 1994 and does not bode well for the British economy.
I do believe we will see the GBP/EUR rate settle under the 1.20 mark for a
sustained period and give some welcome relief to the single currency. I don’t
believe we will see a swing down to the 1.15 region quite yet, as there are
still a number of on-going issues in Europe, although any move towards a third
round of Quantitative Easing could see these levels breached.

There are still contrasting reports being released about
Greece and this is something to keep an eye on. On one side you have a Greek
finance ministry official trying to reassure the markets by stating that Greece
would come to an agreement with private creditors to write off up to 50% of
their debt. On the other side you can look at the Greek bond market performance
and with yields on the rise its suggests the market is not expecting Private
sector involvement deal anytime soon.  This just proves that Europe has a
long rocky road to recovery but at this point the continuing economic problems
in the UK are starting to outweigh those in Europe and I do believe this will
be reflected in the currency markets.

To safeguard yourself against any future negative movement
in the markets then please contact me on the free phone number 0800 328 5884 or
mtv@currencies.co.uk for updates on
the latest markets movements.

Downgrade of Euro countries leads to Euro weakness

Standard and Poor’s recent downgrade of 9 EU countries including France, which has lost
its AAA credit rating, is proof that continuing deep rooted issues are
affecting the entire Eurozone region. Along with Germany, France is considered
one of the linchpin’s in Europe and this downgrade comes as a reminder to us
all that in the current economic climate no country is immune from the
problems.

These downgrades do seem to of been factored into the currency markets and whilst you
would think this seemingly steady decline of the Eurozone would lead to
continued Euro weakness against Sterling, we must not forget the continuing
economic problems we have here in the UK and the strains it is having on our
own currency. When more than one well known source starts talking about the UK
actually being back in recession, it is clear that GBP/EUR is currently one of
the most difficult currency pairs to predict any outcomes for. It is very much
playing a negative off against a negative and I believe that until we know
whether the austerity measures put in place both in the UK and Europe and being
implemented to the required levels, we will not know which currency will leave
this crisis stronger. In truth it may well be neither, as investors seek safe
havens like the USD and CHF throughout 2012 whilst they wait for the continuing
positive data required to bring confidence back to them and ultimately both GBP
and EUR.

If you do have any currency requirements or would like an update on the current
market trends then please feel free to contact me by filling in the enquiry form on the right hand side of this page or emailing me directly mtv@currencies.co.uk.

I look forward to hearing from you.

GBP/EUR Update / Interest Rate Decisions

Interest rate update 13/1/12

Bank Of England (BOE) – Base rate held at 0.5%

European Central Bank (ECB) – Base rate held at 1%

Yesterday saw some heavy losses for GBP against the Euro, as the single currency gained over a cent by close of trading. Only a few days ago were we trading up at a 16 month high and the dizzy heights of 1.25 and beyond were being banded around by many experts. Personally I believe we could still see levels push back up above 1.20 in the short-term but I do not think we will break 1.25 unless their is a real setback in the Eurozone discussions and the austerity measures being put in place across the region.

In such a volatile market it is foolish to be to bold with our predictions, as more often than not over the past 6 months something has come along to rock the boat so to speak and throw analysts predictions out of the window. What is interesting to note however is that on the previous four occassions GBP/EUR rates have hit these levels,we have seen them drop off by anywhere from 4%-15% in the following months. I do believe we will see levels move back down towards the 1.15-1.17 levels we were operating at towards the end of 2011 so anyone buying Euro’s should consider their position over the coming weeks.

If you are keen to be kept up to date with all the markets movements or you have any upcoming currency requirements, then please feel free to contact me via email at mtv@currencies.co.uk. I can also be reached from inside the UK on the free phone number 0800 328 5884 or outside the UK on 0044 1494 725 353 and I will run through the various contract types we have on offer to safeguard yourself against this volatile market.

Matthew Vassallo (Foreign Currency Direct)

 

Busy Day on the markets – Have you protected your rate?

Today we have the Bank of England (BoE) and European Central Bank (ECB) interest rate decisions. The BoE decision is at 12.00, and the ECB is 12.45.

Possible outcomes: The BoE may announce further Quantitative Easing (QE) for the UK, although this is not wholly expected. Nevertheless the pound has lost recent gains against the Euro, with trading levels creeping back into the 1.19’s.. More QE will likely cause a move towards the 1.17-1.18 range. The ECB may cut rates by 0.25% to 0.75%, but this is again not wholly expected. I would expect this to cause a move to 1.22 + on GBPEUR. The general concenus is that there will be no changes, but even if this is the case, Mario Draghi ECB President will speak at 13.30 which may provide further clues to ECB policy going forward and cause movement.

Even the mere possibility of QE has weakened the pound providing sellers of Euros with a spike, well worth taking advantage of.

EURUSD is the most favourable it has been in 16 months, the dollar having surged on solid economic data and it’s safe haven status.

If you have a trade and are perched waiting to see what will happen it is worth asking yourself have you planned for every outcome? Recent movements have caught some clients out who were unprepared and willing to gamble. The currency markets are very unforgiving so to speak to a specialist about all your options feel free to make direct contact on jmw@currencies.co.uk

I can potentially setup the Stop / Loss and Limit orders which will protect your rate (discussed in previous posts this week) within minutes of you making contact.

The gamble is doing nothing…

Morning Readers,

Further to my post yesterday, here is some data on GBPEUR which shows just how quickly rates can change. As discussed I feel there is room for a bit more euro weakness, but that we would not go higher than 1.25 (if we even break 1.22). As you can see from the information below, history dictates that rates could fall back significantly and quickly…

November 2008 rate 1.21 1 month later GBP fell 15.7% to 1.02

June 2010 rate 1.2251 1month later GBP fell 4.3% to 1.1721

August 2010 rate 1.2250 3 months later GBP fell 8.7% to 1.1184

Jan 2011 rate 1.2069 4 months later GBP fell 8.3% to 1.1057

Jan 2012 rate 1.20 …………..?

As tempting as it is to hold out for further gains, is it really worth the risk?

If you would like information on the very best exchanges please contact me on jmw@currencies.co.uk

Should I buy euros now? How can I protect the gains I have seen?

With trading levels close to the best they have been in 16 months, there are numerous reasons to buy euros. Many clients who have been bravely holding out for a 1.20 trading level have been quick to capitalise, but there are others who believe things will improve further.

In my role as a currency specialist for one of the UK’s largest currency brokers I am continuously asked what will happen on exchange rates and this is the favourite topic right now. Anyone with a close eye on the rate in the last few years will recognise the rate has been above 1.20 a couple of times.. But then quickly come crashing down.

In each instance the reason can be partly attributed to sterling weakness, namely the threat of QE, or the realisation interest rates will be on hold a lot longer than expected. Things are no different on the sterling side and as such I would be cautious about expecting GBPEUR to hit 1.25 + in the coming weeks.

Getting the best rate is unsuprisingly a key aim for most clients. At the moment one of the most popular contract options we offer, which can really help you squeeze every bit out of the market is a Stop / Loss and Limit Order.

Limit – Say that I could offer you a trading level of 1.20 now. You may be satisfied, but what you really want is 1.22. As much as I would like to offer you 1.22 I currently can’t because the market is not there. What I can do is offer a ‘Limit’ order where we put into the market an automatic order at 1.22. Utilising our advanced computer systems, this order type means that as soon as the market reaches 1.22 (if it does) we will buy your rate out automatically. Markets move every couple of seconds so the use of such a contract type means that we can guarantee your exchange rate even if the rate only moves there for a few seconds. It saves the hassle of watching the market and gives peace of mind. And if your rate doesn’t hit, you can move it or cancel it completely.

Stop / Loss – Much like a limit but you choose a lower level at which we would buy out the deal if reached. So in the above example if you want 1.22 but wouldn’t want less than 1.19 (maybe you are a business and less than 1.19 eats too far into profits? Or maybe that dream holiday villa becomes unaffordable below 1.19) we put the order in at 1.19 and if the market drops to 1.19 we fill the order and you are guaranteed no further losses.

In such times as these where we are seeing impressive gains what you can actually do is move the above orders around. So as the market improves you can bring your Stop / Loss up so that you are captialising on the gains made, and in turn raise your Limit so that you can further enhance your rate if it looks like things will move further in your favour.

This is how savvy traders really ‘get the best rate’. It also works for people selling euros. The Stop / Loss in particular is popular for people selling euros as the general trend has been euro weakness. Some clients have lost thousands of pounds since September when the market started to move against them and had put Stop’s in at say 1.20 to protect their rate. Whilst the level they got when these trades filled was not as good as if they had the done the deal last year, they protected against further losses.

As painful as it may be to see the 350,000 euros you have in your Spanish bank following your Villa sale worth nearly 15,000 GBP less than when you looked at rates in September, you will unfortunately more than likely keep coming up short by making that same comparison. The use of a Stop / Loss and Limit here again can help to minimise any further losses and capitalise on any favourable movements.

As well as the above contracts I can also help secure your rates forward for up to two years. This option has been popular too of late as no one knows what could happen. The real gamble at the moment on exchange rates is doing nothing…

If you would like to find out more about all of your options on the GBPEUR rate please feel free to make personal contact on jmw@currencies.co.uk – Just let me know what you are looking to do and I can make sure you have all the information to make an informed decision. There is still much that could happen this week that could move the markets so by keeping me informed I can ensure you don’t miss important events.

1.20 on the markets! Buying Euros – Looking to trade at 1.20+ ?? Speak to us now!!

1.20 on the markets! It feels good to be saying that on the trading floor today.. Well against many expetcations the euro has weakened again. GBPEUR has broken the 1.20 barrier and this is presenting a great opportunity for savvy clients. With trading levels above 1.20 on a large majority of recent trades we have some very happy clients today!

Are you looking to trade at 1.20 buying Euros? Have you a project in Europe long put off due to the terrible rates on offer in recent years. Well you are looking at this kind of rate today. Exchange rates move every 2 seconds and there are no guarantees, but rest assured we are currency specialists working for one of the UK’s largest currency brokers. We have won awards for our rates and neither Dan, Mike, Colm or myself have been beaten on a deal in as long as I can remember!

If you would like to speak to one of us please fill in the contact form or contact me direct on jmw@currencies.co.uk – Please quote JMW and GBPEURO.

If you are serious about moving money at a 1.20 rate I would suggest leaving a phone number so I can quickly explain how it works and you can then make up your mind if you are interested…

And if you have euros you are considering selling I would be very cautious about holding out for movements dramatically back in your favour. Speak to me direct on jmw@currencies.co.uk and I will happily explain the economic reasons that mean you may have missed the boat.

1.20 on the markets!!

GBPEUR Forecast – What will happen on GBPEUR in 2012?

The end of 2011 saw the return of some of the most favourable GBPEUR rates seen in years. Trading levels approaching and above 1.20 represent a goal for many clients and these levels were hit in December, the highest the rate had been in nearly a year. So will this continue in 2012?

Well on a balance of probabilities I feel not. This is because the reason for the recent improvements are more to do with euro weakness as opposed to sterling strength. When looking at the performance of the pound against most other currencies, it has actually got weaker. This is because the economic situation of the UK is not improving, in some areas it is actually worsening. Nowhere is this more true than with Unemployment data which has contiunued to rise, and is predicted to continue to rise in 2012. Growth is very low and inflation whilst falling ever so slightly remains stubbornly high.

I would expect therefore once focus returns to the pound we will see the rate come back to the mid teens. I wouldn’t expect a fall too much further due to the recent interest rate cuts in the eurozone. Interest rates are a key driver on exchange rates and generally speaking the lower a central bank’s interest rate, the weaker a currency. The two rate cuts by the ECB in the final quarter of 2011 have therefore provided a platform of weakness which allowed the rate to break 1.20, and will in all probability prevent a drop back below 1.15.

The prospect of QE in the UK (which may be seen as early as next week) could also weaken the pound, and on 25th January we have UK GDP figures for Q4 2011, which could well show the UK economy contracted.

Aside from the sterling side we of course have the euro. Despite the continued negative euro coverage in the media, I think the euro will muddle through and resolutions along the way will give strength. Greece leaving (if it happens and I think it may have to) will likely give the euro strength. The ECB will surely play a larger role in 2012 as pressure grows on the central bank to act as the dreaded ‘lender of last resort’. All of these factors will surely keep the euro strong. Yes, there is the prospect the euro could weaken but as discussed I feel that as they muddle through much of the strength will remain.

2011 saw nearly 10 cents movement between the high and the low on GBPEUR rates. As a specialist broker we can help not only get you the best rate but help keep you updated on all of the events that will affect your rate. Rates move every couple of seconds so it is really worth your while making sure you explore all your options. The specialist company I work for has won awards for our rates and I have never had trouble beating not only the banks but every other source of currency I have come up against. A new year is the perfect time to start changing things and if you are unsure if you are really getting the best deal on your foreign exchange, why not contact me to find out. Please fill in the contact form or e-mail me directly on jmw@currencies.co.uk quoting JMW and GBPEUR.

Happy New Year