Monthly Archives: February 2012

EUR Recovery / GBP/EUR Forecast / Greek Solution?

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

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

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

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.

 

Greek Debt Deal Unravelling / GBP/EUR Rates

Greek Debt Deal Thrown Into Doubt

After last week’s announcement that the Greek coalition government
had come to an agreement over the austerity measure needed to receive it’s next bailout package, hope seemed to be returning to the single currency. A move down towards the 1.17-1.18 region looked inevitable on the back of further poor data released in the UK, including rising unemployment figures.

As we should know by now though, the currency markets over
the past year have been anything but predictable and it now seems that the early hope this deal created is being slowly eroded away, as rumours circulate that European Finance Ministers are scrutinising the deal and whether these austerity measures can actually be instigated within a realistic timeframe. The markets have reacted to this and we have seen Sterling push above 1.20 again and settle around 1.2050, as investors wait for confirmation on whether Greece will be receiving its next bailout package.

For the first time there seems to be a real, growing belief
that the only option remaining is for Greece to leave the EU and default on its current debts. This is not ideal and a scenario Germany in particular have very hard to avoid. The fact is there could be irreversible damage done to the Eurozone if Greece remains a member, unless European Finance Ministers, the EU and the IMF are satisfied that the Greek government can fulfil their end of the bargain and also identify another 325 million euros worth of cuts on top of the current agreement.

To me this seems like too much for a country being torn apart
by civil unrest and a coalition government jostling for power with elections coming in April. Germany have made it clear that they would help to rescue Greece even if it leaves the EU and its single currency and the fact we are hearing talk like this, could well mean that behind the scenes the powers that be have already made their decision and are putting the necessary steps in place to ensure further contagion does not spread if Greece do ultimately exit the EU.

If you would like to be kept up to date with all the latest market movements or you have any currency requirements please feel free to contact me directly on mtv@currencies.co.uk

GBP EUR Rates and UK Unemployment

The markets are bracing themselves for some potentially damaging UK unemployment figures this morning (due out in the next 10 minutes).  As a result sterling is currently under pressure and I expect this to continue to be the case as more UK data comes out through the month.  The economy is clearly in a bad way given the recent efforts at Quantitative Easing by the Bank of England (a clear admission that the economy will get worse without assistance) and I would imagine retail figures will reinforce this view.  If you are buying Euros I would look to move sooner rather than later as although the Finance Meeting in Brussels has been cancelled, due to a perceived inability on Greece’s part to cut enough of its budget, I still believe a deal will be done on Greece and the Euro strengthen in the coming weeks.

If you are looking to buy or sell Euros or any other major currency please do not hesitate to contact Colm at cmg@currencies.co.uk a quote gbpeuro in the subject matter- I will do my best to source you the most competitive exchange rate for your transfer.

UK inflation figures / GBP/EUR update / Which way next for the single currency

UK inflation figures were released this morning and we saw a
sharp fall in January, down to 3.6% from 4.2% in December. This drop brings CPI (Consumer Price Index) inflation to a 14 month low and whilst the government do expect inflation to continue to fall throughout 2012, the rate remains well above the Bank of England’s 2% target. The release of these figures saw some early morning Sterling strength, as it reached a high of 1.1952 against the Euro. However, this spike was short lived as the single currency battled back this afternoon and at time of writing had moved perilously close to the 1.19 resistance barrier we have seen of late (1.1907).

This may be due to the fact that last night Moody’s credit agency reported that the UK may soon lose its AAA credit rating and with tomorrows unemployment figures expected to come out higher than previously, the markets may well be factoring this negative impact in.

Last week we saw the Euro gain strength against GBP as the
Greek government finally came to an agreement over the austerity measures needed to receive its latest bailout package of 130 billion EUR and ultimately save the country from Eurozone extinction. However, the initial relief has slowly been replaced by scepticism, as worries remain over Greece’s ability to implement these measures in the long-term.

Opinions remain divided amongst analysts but my belief is
that we will see Euro strength over the coming weeks providing these austerity measures in Greece are instigated. This is because the on-going data releases in the UK are in the majority still very poor and do not look like they will be improving until at least the second quarter of this year.

If you would like to be kept updated with all the latest market movements or have any currency requirements please feel free to
get in touch with me directly at mtv@currencies.co.uk

 

UK outlook changed by credit rating agency – Inflation due this morning!

The UK has had its outlook changed to negative watch rather than stable by Moodys but it
has had little impact for the pound against the single currency, partly due to
the fact France and Austria are suffering the same treatment, and partly due to
the fact we are waiting UK inflation data this morning as well as European
production and ZEW surveys.  As such I expect the sterling Euro currency
pair to remain volatile- my gut instinct is a better day for sterling today,
with the Euro fighting back tomorrow when UK unemployment is released.  If
you are looking to buy or sell Euros at the optimum time then please feel free
to e-mail Colm at cmg@currencies.co.uk
and I would be happy to explain how it works.  UK inflation is out in the
next 30 minutes so be quick!

Greece / GBP/EUR rates / BOE announcement

Greece – The Never Ending Story

The Euro has seen gains of over half a cent on Sterling
today and can be seen as a clear indicator that the markets are expecting a resolution between Greece and its private creditors sooner rather than later. This agreement should lead to a large proportion (potentially up to 50%) of the country’s debt being wiped off and may ultimately be the key factor in keeping Greece in the Eurozone and part of its single currency.

The markets belief somewhat goes against the reports we have
been reading, as each day the agreement seems to be delayed further, even though the deadline for Athens to find its next tranche of repayments is fast approaching. German chancellor Angela Merkel stated this week that she would do everything in her power to keep Greece in the Eurozone and the threat of contagion in the region if Greece does default, seems too higher risk for the power houses of Europe to contemplate.

Whether this agreement comes to fruition this week is another matter but with the Bank Of England’s announcement due at noon tomorrow, the risk of further Quantitative Easing in the UK is enough to keep the markets below 1.20 and pushing towards the 1.19 resistance barrier we have seen recently.

It would well be worth keeping your eyes and ears fixed to news reports over the next few days, especially if you have an upcoming currency requirement. One scenario may be that Greece agrees a deal and the BOE (Bank Of England) announce a further round of QE (Quantitative Easing). This will immediately see GBP/EUR rates move down, in my opinion, towards the 1.17 area and with no positive data expected in the UK until at least Q2 of this year, it may be quite some time before we see it move back up towards these levels again.

If you do have any upcoming currency requirements or have
any queries about the markets then please feel free to get in touch with me directly at mtv@currencies.co.uk.

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Greek debt issues still making headlines

Greece are in continued talks with it’s international lenders over the austerity measures they will have to put in place in order to be granted the next tranche of their international bailout.

The Greek finance minister, Evangelos Venizelos, said that the negotiations were “so tough that as soon as one chapter closes another opens” and with German Chancellor Angela Merkel saying that “time is running out on Greece” and 2 of the largest Greek trade unions gong on strike today things are looking pretty bleak.

This repeated uncertainty in the Eurozone has led to another period of extremely good buying opportunities for those needing to buy Euros with levels only a cent or so away from the 16 month highs we saw in the middle of January.

With the deadline now having been extended for a few days uncertainty and speculation is likely to continue, possibly leading to further Euro weakness and even better rates. Be aware however that the currency markets are extremely fickle and as soon as we see (or even hear rumour of) a solution in Greece we could see all the recent gains quickly wiped out.

If you want to be kept aware of any news coming out of Athens, or any other information that is likely to have an affect on GBPEUR exchange rates, then feel free to email me at sah@currencies.co.uk telling me a little about your currency needs and I can act as your eyes and ears into the world’s most volatile market.

 

Greek debt talks drag on / Which way next for GBP/EUR / Euro strength?

Talks between Greece and its private creditors will resume
today, after an agreement over the country’s debt restructuring failed to reach a conclusion over the weekend. Fear is growing that Athens has not given enough guarantees, that they can implement the more severe austerity measures needed to receive the next 14.5 billion bailout package and ultimately save the country from bankruptcy. Considering the deadline for Greece to pay its next instalment is mid-March, time is fast running out for the country and their involvement in the single currency, unless a deal can be struck imminently.

The hope had been that an agreement would be in place by
Sunday night and if this had been the case I feel we would of seen the Eurostrength many analysts have been predicting. As it stands investors are still waiting for developments in Europe to progress and we have seen Sterling spike this morning by 0.5%  against the Euro, possibly due to the protraction of the debt talks in Greece.

What we do know is that the longer this situation continues
without a positive resolution, the more the markets will lose confidence in the single currency. However, with the real possibility of another round of Quantitative Easing being announced by the BOE (Bank Of England) this week and the on-going negative data being released in the UK, any resolution to the Greek debt talks could see some major Euro strength and move the currency pair back toward the 1.19 level and beyond.

If you have any currency requirements or would like to be kept updated on the latest market movements then please contact me directly on mtv@currencies.co.uk

Sterling Euro rate above 1.20 again – what will happen next?

GBP/EUR rates continued to fluctuate yesterday and the
battle for supremacy between Sterling and the single currency showed no signs
of relenting. We saw some early Euro strength, bringing levels back down below
1.20, before Sterling battled back in the afternoon and looked to be continuing
that trend this morning with further gains.

Investors are keenly awaiting further economic data from the
UK ,which will indicate whether we are likely to be heading back into
recession. Further negative growth in Q1 of this year will mean the UK is
officially back in recession and with further Quantitative Easing likely, the
relatively attractive buying levels we are experiencing at present could
disintegrate quicker than some may imagine. In Europe the on-going Greek debt
talks continue to take centre stage, as any failure to reach an agreement with
their private investors will, in my opinion, result in Europe slipping into an
instant recession. This in turn will put a major strain on the region’s economy
and the risk of contagion will weigh heavily on investor’s minds.

What is becoming clear, is that based on the current
economic climate 1.20 is starting to look like a benchmark for the currency
pair. When we see levels push through this, the general feeling amongst
investors is that Sterling has become over-valued and we quickly see it
retreat. On the flipside, any gains for the single currency are halted as
quickly as they began, as Europe‘s problems see no sign of easing and European
leaders continue to disagree over the best way to implement and ensure the
long-term future of the Eurozone and its single currency.

If you would like to be kept updated with the latest market
movements or have any currency requirements we can assist you with then please
contact me directly on mtv@currencies.co.uk

GBPEUR Forecast – Important Data out today and next week

This morning  09.30 – UK PMI Construction – PMI is ‘Purchasing Managers Index’ – it is a snapshot of the previous month’s economic activity in that sector. It offers the most up to date information for market sentiment and hence is closely watched. Yesterday for Manufacturing it came out better than expected and helped the pound gain close to 1% on the Euro.

The current interbank rate is above 1.20 and we have been trading clients at these kind of levels. If you have a currency transfer to make please feel free to get in touch on jmw@currencies.co.uk I have never had trouble beating the banks and other brokers and will be happy to provide a free quotation.

Friday 09.30 am – UK PMI Services – The same as the above but for the Services Industry. On Friday at 13.30 we also have the US Non-Farm Payroll data which is notorious for moving the market on various currencies.

Next week we have Interest Rate decisions for both the UK and Eurozone where we may possibly see a Eurozone rate cut or QE in the UK. If you are unsure of how these events could change your rate, or want to know more about any of the processes involved in using our service please let me know and I can quickly explain how it works so everything runs smoothly and we can focus on getting you the best deal.