Monthly Archives: April 2012

The Slide of the Single Currency

As the week draws to a close the markets are left to reflect
on what has been described by many as the beginning of the end for the Eurozone
and its single currency. As financial Armageddon bears down on the Spanish
economy and investors run for cover, I have to ask myself which twist this
Greek tragedy will take next. In fact, it is now probably better described as
the sinking of the Spanish armada and any default by Spain would not only cripple
the country’s economy but ensure contagion spread through the whole EU region.

One by one country’s economy’s would contract and they would
no longer be able to help bail out their counterparts, or worse, decide that
any default of their own was better than paying years of high interest debt.
For this reason I believe that the key European leaders will continue to make
the ‘right’ noises about the necessary austerity measures and bailout funds
that will help stop the markets going into complete panic.

Personally I feel that whilst Europe is suffering, the UK is
not far behind. Yes our economic data is improving but we are so interlinked
with Europe (they are our largest trading partners by some distance) that any
long-term recession there would hinder our ability for economic growth.

I now feel any move back down below 1.20 is highly unlikely
in the short-term, although those waiting for 1.25 should heed my warning
above, as the UK will ultimately be affected by any long-term economic
contraction in Europe.

If you have an upcoming currency transfer, or
would like an up to date analysis of current market trends, then please feel
free to contact me directly at mtv@currencies.co.uk
or on 01494 787 478

Good GBP Euro Exchange Rate Despite Recession In UK

Despite the UK being officially back in recession this week, sterling euro rates are still the highest we have seen since 2010 (and close to levels last seen in 2008).  Whilst the pound did drop very sharply on Wednesday following the ONS announcement that the UK is back in recession and the worst was feared for the short term future of the pound, it has since rallied back due to a combination of factors.

Firstly the original expectation was that the UK would avoid recession and the figures of contraction came as a slight surprise.  However it was not as if the UK economy was expected to be booming with forecasted growth being a measely 0.1%.  Many economists believe this initial GDP announcement will subsequently be revised up as more data becomes available making this the recession that never was!

Secondly, problems in Europe still persist with Spain having its credit rating downgraded by one of the ratings agencies, The Netherlands in political paralysis, and the slight favourite for the French Presidency (Hollande) threatening to bash the markets.  The level of UK recession is incomparible to that being experienced in countries like Greece with the UK’s last quarter at -0.2% as opposed to worse than -7%.  As such sterling currently represents the lesser of two evils.  Watch out for US GDP data this afternoon to see how this affects global confidence- a strong showing may boost the pound.

With exchange rates knocking on the door of 1.23 it represents a great buying opportunity so if you need to buy Euros then why not get in touch and ask about our currency exchange services?  Simply e-mail Colm at cmg@currencies.co.uk and quote GBPEUR in the subject m

UK in recession…..a reaction?

After the initial shock following yesterday’s announcement from the Office of National Statistics that the UK is officially back in recession, where we saw the Pound quickly lose around 0.5% against most major currencies, Sterling seems to have recovered quite pretty well starting the day only half a cent away from the recent 20 month high against the Euro and just touching 1.62 ( a 6 month high) against the US Dollar.

In my mind the reason for the Pounds continued strength could be one of two things. Firstly, the recession may not be all that it seems, the GDP announcement made yesterday is only based on 40% of the data required to get an accurate figure and as a result may be wildly inaccurate, we will know much more when we see the revised figure on 24th May which takes into account over 80% of all appropriate data – I’m fairly confident that we may see a positive GDP figure within a month’s time.

Secondly, the move into recession is only a small one, the expectation was only for 0.1% growth so in reality the difference was only 0.3%, not exactly a crippling shift! When compared to the extensive and continued problems in Europe (read: Spain recently moving into recession and most likely needing a multi-million Dollar bailout) and the US not forecasting any increase in interest rates for another 2 ½ years then the picture for Sterling looks a lot more rosy. Don’t get me wrong I’m not saying for 1 minute that the UK economy is thriving and will continue to grow in the months to come – I just think we need to sit back, take a bit more perspective in and look at  what the numbers really mean!!

The Pound may well stumble along between 1.20 and 1.25 for the next few weeks, but is that a bad thing? If you ask anyone who had to buy Euros in the last 2 years I think you would have a unanimous vote of no, in recent times buying above 1.20 is certainly a luxury and not the norm and shouldn’t be taken for granted.

If you would like to talk to me about the markets or your specific currency requirements feel free to call me on 01494 787478 (don’t forget to ask for Steve) or email me at sah@currencies.co.uk. I look forward to hearing from you.

GBPEUR at 20 month high

The Pound hit a 20 month high against the Euro yesterday following the Bank of England’s minutes which suggested that the likelihood of further Quantitative Easing being used to stimulate economic growth in the UK is diminishing.

This, combined with an unexpected drop in unemployment numbers led to the Pound spiking to within a cent of the highest levels seen since the Summer of 2010 (now doesn’t that seem like a lifetime ago!!).

At times like this human nature often gets the better of us and we instinctively hold off in the hope of rates going up even further but let me give you a little word of warning. Firstly, as much as we have seen a string of pretty good economic data releases for the UK, which has led to this recent spike, the key release this month isn’t due until the 25th April in the form of the latest UK GDP figure. This is a measure of the growth (or lack of) the UK economy saw during the 1st quarter of 2012 – more importantly a negative figure will confirm that the UK is back in recession. As you can imagine, a poor figure could be pretty catastrophic for the Pound!.

Secondly, have a look at the facts below when the Pound has hit highs against the Euro recently:

  • November 2008, rate 1.21 – 1month later GBP fell 15.7%
  • August 2010, rate 1.22 – 3 months later GBP fell 8.7%
  • Jan 2011, rate 1.20 – 4 months later GBP fell 8.3%

I really think they speak for themselves!

As a currency brokerage we have a range of tools and mechanisms available to help you take advantage of times like this should you need to but Euros now or in the future. For more information of just to ask me about any aspect of the currency market feel free to call me on 01494 787478 or email me directly at sah@currencies.co.uk.

 

 

1.22 on the markets!!!

GBP/EUR levels have today pushed through the 1.22 barrier, which up until now had provided huge market resistance. We are currently trading near the dizzy heights of a 20 month high, with the Interbank rate touching 1.2233 at its highest point today. This seemed be triggered after this morning’s UK unemployment figures were released and came in better than expected (unemployment fell by 35,000 to 8.3%). This represents the lowest figure since the summer of 2011 and provide further evidence that the UK is slowly starting to move away from economic contraction and showing signs of future growth.

Today’s market movement represents an excellent buying opportunity to those looking to purchase Euro, as you will achieve some of the best trading levels of the past two years.  A warning to those waiting for 1.25 or better though, historically, every time we have reached these levels the markets have fallen away almost as quickly. It is fair to say that the problems in Spain are certainly hindering the single currency and its chances of short-term recovery against Sterling but in my opinion the current strength we are seeing behind the pound is based more on the problems in Europe and euro weakness, rather than any real confidence in our own currency.

If you have an upcoming currency transfer to make or would like an update on the current market movements, then please contact me directly at mtv@currencies.co.uk or call me on 01494 787 478 for our award winning exchange rates and market analysis.

Buying Euros At 1.21?

If you are looking to buy Euros at 1.21 then the last 2 days have provided the perfect buying opportunity with many trades going through at 1.21 (dependant on volume).  Higher then expected UK inflation figures and the continued problems in Spain have meant the pound has remained relatively robust whereas the Euro has been under increasing pressure.  Current levels represent the best buying levels in nearly 20 months and have only been about 1.5 cents higher since 2008!

Whilst I cannot see the situation surrounding the European debt crisis going away anytime soon, there are a few cautionary points that Euro buyers may want to be aware of if they are thinking about holding off.  Firstly we have UK unemployment figures tomorrow and retail figures later this week.  This is followed up on the 25th with the official UK GDP figures, showing how the economy has performed since the beginning of the year.  If unemployment figures continue to rise, or if economic growth figures are particularly weak then the pound would likely weaken and drop back from its recent gains.  If worst case the GDP figures are actually negative then the UK would be back in a technical recession which would no doubt hammer confidence around the pound.  Whilst I do not expect this type of catastrophe, I would be inclined to say if you are looking to buy Euros or transfer currency at a rate north of 1.20 then it may be prudent to do so now.

Secondly, it is impossible to look at the Eurozone debt crisis as purely a Euro problem.  With Europe being one of the UK’s largest trading partners, a prolonged slow down in Europe has been seens by many as having the potential to plunge the UK back into a double dip recession so bad news for the Euro may also be bad news for the pound!  THink of UK bank exposure and the fact the UK would no doubt have to contribute directly or indirectly to potential bailout funds.

The company I work for, Foreign Currency Direct, specialise in helping private clients and businesses to exchange funds at the best exchange rates available saving clients on money transfers.  We are regulated by the FSA and based in the UK so if you would like more information about our services, or have a requirement and would like to see what we can do to save you money then simply e-mail Colm at cmg@currencies.co.uk quoting GBPEUR in the subject matter with a brief overview of what you require and one of the traders will come back to you.  There is no cost or obligation in doing this and will ensure you get the best deal on your currency

GBPEURO.. Which way will it go?!

The GBPEUR exchange rate is knocking on the door of the best levels we have seen all year for anyone buying Euros and in my opinion well worth taking advantage of.

You see the problem with the pound over the last few years is confidence. With much of the UK’s industry and manufacturing having been moved offshore, the last decades growth was fuelled by global demand for UK services. Banking and Insurance were the real big hitters and with these areas still licking their wounds, quite possibly for years to come, it is unlikely the UK will make any major leaps and bounds forwards. The strength of the pound depends largely on investors confidence in the economic outlook for the UK, hence the pound will remain fragile for many more months and even years. Therfore if looking at GBPEUR thinking things can only better, you may want to take step back a nd reassess your position. If you are unsure about what is driving the rate I can personally assist you with information, just drop me a mail on jmw@currencies.co.uk

When moving money internationally the better your exchange rate, the more you get for your money

This may sound obvious but everyday millions of pounds is lost because people do not shop around for a decent rate. They just go through their bank and accept whatever the bank teller offers them. How do I know this? Because I work as a Senior Currency Dealer for one of the UK’s largest currency brokerages. We specialise in commercial exchange rates and can offer this to private clients who need to transfer money electronically from bank to bank. Our business offers a highly personal service which will seem like a breath of fresh air compared to your bank.

So if you are looking to buy a property or pay an Invoice to a foreign bank account, why not check with me or the site to see if a better deal is not available? We could save you thousands…

This website is a labour of love by my good friend Daniel Wright, an Associate Director at the company we both work for. Everyday we save new and old clients thousands of pounds by beating the banks and other sources. How can you do this I hear you ask? We trade about half a billion pounds a year and can source an extremely sharp commercial rate of exchange, the savings of which we pass on to you. We make our money on the difference between where we buy and where we sell. Simple.

If you would like to learn more about how it all works, GBPEUR or any other currency pairing trends, please email me, Jonathan Watson on jmw@currencies.co.uk and I will be in touch immediately

Thank you 🙂