Monthly Archives: March 2013

GBPEUR rates continue to climb but for how long, when to buy euros? (Steve Eakins)

GBPEUR rates have continued to climb this week, slowly but continually meaning buying Euros is the cheapest for 2 months.  It seems to be driven not by an improving UK economy so don’t get any hopes up, but the drive for a safe haven from the Eurozone.  Today Cyprus banks open and depending on whether there is a run on the banks there, it could very well spread to other banks across mainland euro putting more strain on an already struggling financial system.  We have also seen risks gain pace in Italy as there are rumours of a credit downgrade, and lastly Spain amended their forecasts for 2013 to a econ economic contraction of 1.4% and unemployment rising to 28%. So you can see why investors are protecting their assets and moving funds out of the euro.  The USD has also been a big benificary of this movement to safty.

So when will it stop, when do I buy?

Well following the EASTER WEEKEND when the UK is closed for both Friday and Monday, the UK pushes its economic releases into 4 days making it a busy time.  So if you are happy rolling your requirements over the weekend and are not concerned about european contaigen we can look into the data releases next week and when the best to time your trade.  Next week we see from the UK: Morgate Approvals, Consumer Credit, House pirce index, PMI construction, Interest rate decision, QE update, along with a few others…

Each of these can easily move the markets, the concern of more QE is high and one which could easily see rates fall by a few cents. My predictions for the next week is to expect rates to either climb by another 0.5 cent’s or fall by 2 cents.

Here we help in a multiply of ways:

  • We have a number of tools to enable you to limit your exposure if you want safty over the weekend
  • Here we can pro-activily help tim your transfer at spikes with SPIKE NOTIFICATIONS
  • Or if you just want to secure funds, our award winning exchange rates should happily save you over 2% compared to the banks.

If any or a combination of the above are of interest get in contact! A quick conversation with me here could easily save you thousands. (Yesterday I saved a new client £750 on a transfer compared to another broker he had been using for years in the space of 15 minutes, a well spent quarter of an hour I would hope you agree?) Contact me, Steve Eakins on either 01494-787-478 or emial me directly on hse@currencies.co.uk

 

Pound Sterling exchange rates – Another volatile week so far! (Daniel Wright)

Good afternoon,

Sterling has once again had a strange week on the currency markets, gaining a little further ground against the Euro, however losing a little value against the majority of major currencies.

Much of the losses seen for Sterling can be put down to the possibility of the U.K having another credit rating downgrade, this time by Fitch (another of the three large credit rating agencies) which was announced late last Friday. We also had worse than expected mortgage approvals data early on Monday which again highlights all is not rosy in the U.K.

The reason we have gained ground against the Euro is quite clearly mainly down to  the issue we have had over in Cyprus, for those of you that are looking to buy Euros in the near future it may be prudent to be a little concerned as rates have not continued their charge in the right direction over the past few days and if matters in Cyprus cease to be front page news then Euro may join the rest of the other major currencies and could start to fight back making it more expensive to buy again.

For the rest of the week we have GDP (Gross Domestic Product) figures for the U.K tomorrow morning – Don’t worry not the big one surrounding the triple dip recession but a revision of  a previous figure.

On Thursday we have GDP figures for the U.S which can actually change global attitude to risk and may affect all major currencies.

Beware that the on-going Cypriot funfair will more than likely stay in town leading up to the long weekend so if you do have a pending transaction to carry out it may be sensible to eliminate any risk of another weekend rate shift and ensure that you can relax whilst eating your Easter eggs.

If you would like to contact me directly to assist with a pending currency transfer email me on  djw@currencies.co.uk

 

 

GBPEUR falls once again – when should I buy euros this week?

GBPEUR has dripped below 1.18 due to poor UK retail sales and a general lack of steam from yesterday’s rally. Ultimately the reasons for the improvement were solely due to comments from the European Central bank that Cyprus was a test case.

These comments have since been taken back and hence the rate has fallen a little. I think on balance GBPEUR is destined to drop a little lower this week as we have UK GDP data tomorrow and so far everything seems to have settled in Cyprus.

Saying that it is impossible to say exactly what will happen, we aim to keep our clients informed of what is happening in the market to ensure that they don’t suffer unnecessarily at the hands of adverse movements.

If you have a transfer to consider you may be well off speaking to one of our team to find out more about what we can offer. We can offer our clients much better exchange rates than the banks and all the information to make an informed decision on when to trade.

Please contact me Jonathan on jmw@currencies.co.uk for information on the how it works and to learn what will affect your rate and how much it may move.

Could the UK and Eurozone both be as bad as each other? GBP/EUR volatility (Alistair Ryan)

We have seen GBP/EUR rates drifting up today, in fact we have seen over a one cent movement over the last 24 hours with a high of 1.1778 and a low of 1.1663. There is no doubt that the market is very volatile at the moment with so much uncertainty in both the UK and the eurozone and I can’t see this changing any time soon.

The UK is waiting to see whether we can avoid a very undesirable Triple Dip recession, which we will find out at the end of April. Estimates at present are showing that it is going to be very tight. The last Gross Domestic Product (GDP) estimate that was released was at -0.1%, when the official GDP figures are released in April we need this to be at 0% or higher to avoid going back in to a recession. With it being so tight it is creating a lot of uncertainty with Sterling and I can see this continuing until we have an outcome to this matter. If we do go in to a recession I would expect Sterling to weaken significantly off of the back of this but alternatively if we manage to avoid it then rates could go the opposite direction.

In my opinion the other main topic driving GBP/EUR rates is the crisis in Cyprus. Cyprus must come up with a plan to raise €5.8 billion in order to qualify for a €10 billion international bail out. The EU and IMF have demanded that an adequate plan is put together before Monday otherwise they will halt any special funding for Cypriot banks. Cyprus may only be a small member in the eurozone but this crisis could be the sign of things to come and that, I believe, is the reason it has created such a stir on the markets.

If you have an upcoming currency requirement and would like to talk with one of our specialised currency brokers then please feel free to contact me direct at atr@currencies.co.uk

GBPEUR rates improve!

Well after all the doom and gloom it is good to post with good news!  Many clients have stuck their transfers in today taking advantage of the one month high buying euros with sterling. For me this looks like a spike to take advanatge of. Yes the Cypriot situation could cause further improvements but there is a fair chance it will blow over too.

Cyprus is a very small economy and the situaiton is fairly unique. Surely the powers that be in the eurozone are not stupid enough to apply the medicine prescribed for Cyprus to other countries? Only time will tell but for the time being I expect not.

If you are looking to buy or sell euros (or indeed any other currency) we can help with forecasts plus ensure you trade at the best rates. Even if you use another currency broker or your bank a quick email and call to us could save you money. Daily I speak to clients using other companies and save them money. If you don’t ask you don’t get so why not ask me what we can do and go from there!

For more information at no cost or obligation please contact me Jonathan on jmw@currencies.co.uk

GBPEUR rates very volatile – Cyprus – Bank of England minutes – UK Budget day – GBPEUR rates touch 30 day high (Steve Eakins)

Exchange rates globally are currently being driven by a small island in the med, the 3rd smallest economy in the Euro zone, Cyprus.  At the weekend it was confirmed that to take a EU bailout to prop up their failing banks due to exposure to the Greek market, they would need to raise funds from bank deposits.  This has been a touchy topic as it is unprecedented and some would say simply theft, a real change between the people and the government that they elect.  Cyprus is in a tuff place, they need to raise money to keep their economy going and they currently have two options.  Either a bailout from the EU which includes this bank levy or a Russian offer to pay off their debts in return of sole rights to their natural gas reserves of the north of the island.  This story has been well covered in the media over the last few days but will remain a hot topic in the markets and drive prices for the immediate future.

Other stories that are driving prices currently come from the UK that have a very busy day today too.  This morning we had confirmation that the Bank of England voted 6-3 against more QE, it increases the odds of QE in the future so weakens the pound. Unemployment figures came out for the UK at the same time and confirmed a weaker picture with more people recently losing their jobs, again weakening the strength of the Pound.   Now eyes in the UK are on the anticipated UK Budget. This I imagine will be a none event for the currency markets, most policies have been leaked to the press over the last 36 hours so the markets have already priced these in. There is also no scope in the kitty to announce any real change to policy and growth.

So what now for the currency market?

Well keep your eyes on Cyprus, in my option this will be the largest driver for exchange rates over the next 48 hours at least.

  • If they delay in a decision uncertainty will increase and GBPEUR rates will probably climb.
  • If they take a deal from Europe the euro may strengthen, but by how much will depend on the deal and the bank levy. If we see the full bank levy be implemented it could easily wipe off 3 cents on GBPEUR rates which in monetary terms adds £2,000 on every €100,000 purchase.
  • Or lastly, if they take an offer from the Russians the market could go any direction – it would theoretically be the first example of a government buying another, Cyprus would in effect be leaving the Euro zone and leave the door open for others to follow…. It could really be a dicey time…

So what to do, when shall I buy euros?

Well I think that the favourite is for a correction and for rates to fall back down making it more expensive for euro buys. The decision comes down on when to buy as if Cyprus continues to delay rates could continue to improve.  Generally I see rates either getting a little better or a lot worse in the near future.  GBPEUR is up at a 30 day high currently, saving euro buyers nearly 3% compared to last week.  I would buy now, but if you wanted to take the risk I would suggest limiting your exposure and maybe deploying tools like limit orders or stop loss orders.  It is however simply gambling, no one has a crystal ball for the markets.  (Unless you are a Russian Mafia boss in Cyprus. It was reported that €8 billion euros left Cyprus on Friday, so someone knew this was coming…)

Either way we can help, we can save you time and money on your currency exchange.  Simply get in contact on the normal number or email me directly for more information.  You can contact me, Steve Eakins at hse@currencies.co.uk

 

Pound Rallies as Fears Over Cyprus Grow (Matthew Vassallo)

What a difference a weekend can make!

The Pound has rallied against the euro during Tuesdays trading, with events in Cyprus once again taking centre stage. We came back on Monday morning to find the markets in disarray, following an announcement by the Cypriot government that they planned to apply a ‘bank levy’ charge on all foreign and domestic imports. This means that anyone who holds a bank account in Cyprus is liable to pay a hefty fee, which will be relative to the amount of savings they have. Needless to say this has not gone down well with those involved and there has already been a number of public protests against the scheme.

The markets immediately panicked and GBP rose sharply against the EUR yesterday morning off the back of this news. Since then we have heard various reports and potential delays in a decision, with news surfacing this afternoon that the Cypriot Finance Minister has offered his resignation. If this report is confirmed it will only reinforce fears that a potential uncomfortable decision has already been made and the current delay is nothing more than a smokescreen, whilst the relative parties get their PR protocols in order. This is a very cynical viewpoint I admit but the recent history in Europe suggests it may well be accurate and if true will reinforce my belief that regardless of the reports we read, the eurozone has a long way to go before it can truly say that it is finally on the road to economic recovery.

Personally I expect this news to hit the eurozone and the EUR hard in the short-term, unless their is a major turnaround by Cypriot officials. However, with the UK budget out tomorrow followed by UK retail sales figures on Thursday, it may not be long until the UK economy is causing investors headaches and the Pound could come under pressure once again.

Here at Foreign Currency Direct plc we have won multiple awards for our exchange rates and service. If you have an upcoming currency transfer and would like to be kept up to date with all the latest market movements, or would like to speak to us regarding the currency options available to you then please feel free to contact me directly at mtv@currencies.co.uk or call us on 0044 1494 787 478.

One Month High for Buying Euros – Should I buy or hold on?

The current spike on GBPEUR is in my opinion bound to falter soon. The Cyprus situation albeit not resolved should be closely watched as it is likley the rate will react to the headlines here. I have heard reports the Cypriot Finance Minister has resigned amid  the tough choices faced by the parliament. Like an elastic band being stretched to the p[oint of snapping the euro crisis continues to test everyone’s resolve. One particularly shocking piece of news I heard was that last week about €6 billion left Cyprus as there were rumours of this happening. I know the people of Cyprus were promised they would not lose their money, today that loose bond between the people and the rulers looks more fragile.

If we were talking purely about the euro I would say rates for buying euros will improve due to euro weakness. However tomorrow we have the UK budget, Bank of England Minutes and Thursday UK borrowing data. With the way the UK and the pound has fared in recent weeks these events are bound to attract international attention after the UK lost the triple A rating a few weeks ago. What hope does Osborne have to restore confidence. It appears the medicine for the UK will be based on more of the same.

I expect tomorrow to be a very interesting day therefore on GBPEUR. If you are looking to buy or sell currency tomorrow may be the day to move or reconsider your position if you are holding on for better levels. when the UK lost the triple A a couple of weeks ago GBPEUR dropped to the mid 1.13’s in the morning before climbing to over 1.16 by the end of the day due to the Italian election. This was more movement in a day than you seem sometimes in a whole month!

If you are considering any exchanges we are specailist currency brokers working with the rates all day long. We can be your eyes and ears in the market and make sure you get not only the best rates but also trade at the right time too.

For further information please email me personally on jmw@currencies.co.uk

A relatively quiet day on the markets. Where next for GBP/EUR rates? (Alistair Ryan)

Today has been a fairly quiet day on the markets, with no major data releases today for either Sterling or Euro. Towards the end of trading today we have seen Sterling strengthen slightly, with no clear cut reason for this Sterling strength it seems as though some investors may be expecting some positive data from the UK over the next few days and wanted to get in there quick or it could be a case of profit taking.

Tomorrow seems as though it could be a busier day for GBP/EUR rates with some key data releases being released for the eurozone. Starting as I write this and carrying on through tomorrow we have an EU Summit followed by a eurozone summit. The main focus of these summits seems as though it is going to be austerity measures throughout the eurozone. If you have a currency requirement on the horizon it could definitely be worth keeping a close eye on this to see if anything is announced after these summits as we could see GBP/EUR rates swing either way. Another key data release tomorrow will be the eurozone Consumer Price Index at 10:00am. This shows the total changes in price of goods and services across the eurozone and if it comes out less than the expected 1.8% we could see a short term spike with GBP/EUR rates.

My personal opinion is still that the Italian election and the possibility of the UK heading in to a Triple Dip recession will be the main market movers over the coming days and weeks. If we see any hint towards the outcome of either of these matters it could change the markets drastically. If you have any upcoming currency requirements and would like to talk to one of our specialised currency brokers then contact me directly at atr@currencies.co.uk . We have a number of different contract options that can help safeguard you against any negative market movements.

GBPEUR is very sensitive – what is moving GBPEUR today?

Economic data can be a fairly big mover on exchange rates and the rate has reacted today to worse UK economic news and a Spanish bond auction. The UK Manufacturing data today pointed to a contraction in output in the Manufacturing and Industrial sectors of the economy in February. This is bad news for the UK and raises the prospect of a triple dip recession.

Anyone buying euros may take some comfort from the fact the Spanish debt auction showed the cost of borrowing for Spain rising slightly and true this did knock the euro slightly. The main driver from last week on the euro was Mario Draghi’s comments that he expects things to improve in the future. If this is the case then the effects on the exchange rate will be two fold:

1 – The pound will weaken as investors holding GBP from last year due to fears over the euro zone outlook sell the GBP on news the euro zone is making progress

2 – The euro will strengthen as investors buy euros to benefit from the perceived longer term improvements in the economy

If you are making a currency exchange in the future I would be more than happy to explain what is driving current exchange rates and provide some assistance with a much better rate of exchange than you can currently achieve. For more information please contact me directly jmw@currencies.co.uk

GBPEUR Forecast – Will the pound get weaker?

There is no significant sterling data tomorrow but I still expect we will see fairly a busy day as markets adjust from today. The lack of QE by the Bank of England helped the pound briefly but European Central Bank indications that the Euro zone situation is not quite as bad as many think helped the Euro make further inroads against the pound. As I have said many times GBPEUR has not really found its feet so far this year and I see no reason this uncertainty won’t continue. Don’t get caught out gambling rates will go your way, speak to one of our experienced currency specialists or email me directly jmw@currencies.co.uk

The losses on GBPEUR look set to continue to be exacerbated by problems in this green and pleasant land. It is not just the flat economy; the UK is looking increasingly isolated politically too. Talk of the UK leaving the EU and the prospect of new banking regulations driving business away from London all serve to undermine international confidence in the UK and the pound. Lately there has been plenty of media coverage predicting further sterling losses. I think perhaps talk of parity with the Euro is unlikely but do feel rates could easily test 1.10 in the coming months and weeks. If you are considering any transfers involving the pound you can make an enquiry with us. We are confident that we will save you money and will provide useful information.

To learn more please email me Jonathan directly on jmw@currencies.co.uk, I look forward to hearing from you.

Busy day for GBP/EUR with the ECB Interest Rate decision (Mike Vaughan)

Sterling has lost nearly 0.4% against the Euro today following comments from ECB head Mario Draghi that he would  consider all measures to maintain eurozone stability. This came after the bank held its base rate on hold at 0.5% as most expected and Draghi suggested this would be the case for an extended period. The Euro was also bolstered by news that Italian Prime Minister Enrico Letta had won a Senate confidence vote after a last-minute U-turn in his favour by former PM Silvio Berlusconi

This has brought a slight halt to the recent strong run for the pound, with levels very briefly touching 1.20 yesterday for the first time since January. These levels for me should represent a strong buy opportunity as I feel the pound will meet strong resistance at the 1.20 level and I would not be surprised to see a small correction.

With levels so volatile it is important to be in a position to take advantage should you see an unexpected spike. By speaking with an experienced regulated currency brokerage this enables you to take more control over your exchange, certainly when compared to the high street banks. To discuss the current market trends in more detail and to find out how the service works and how we can benefit you please call the office on 01494 787478 or email Mike at mgv@currencies.co.uk

GBPEUR rates hold in anticipation for an important interest rate decision tomorrow (Steve Eakins)

Today we have had a speech by Sir Mervyn King, the Governor of the Bank of England. It was a bit of a none event and for the first time in a long while he did not talk the pound down which many experts have  now come to expect.

Eyes are now all fixed on Interest Rate decisions tomorrow from both the UK and Europe. Both are expected to keep their respective rates steady however there is speculation building that there may be more  QE announced by the Bank of England or a similar policy by the European Central Bank.  Tomorrow is in my opinion the biggest day of the week and could potentially be the biggest driving force for the whole month of March.  So what are the potential outcomes?

  • Quantitative Easing announced for the UK of an additional £25 billion – Expect Sterling to weaken as a result of more pounds being created. This has the potential to lower sterling as much as 3/4 cent making a €200,000 purchase £1,000 more expensive.
  • Quantitative Easing announced for the UK of an additional £50 billion – This is an unlikely outcome and is not expected by the market but it was to become a reality it could push rates by several cents adding maybe as much as £2,500 on a €200,000 purchase.
  • No Quantitative Easing announced for the UK but an extension to the Bank Lending Scheme – This is probably the most probable outcome from tomorrow and would still result in a small drop, probably not a huge drop compared to before the release as it will be priced in.  However compared to current levels today (Wednesday) maybe 1/2 cent drop, adding £650 to a €200,000 purchase
  • European comments adding confidence to their Debt problems – This would be along the lines of Inflation to stay steady along with growth, plus their hope that things will improve and austerity plans across Europe to be kept.  I expect GBPEUR rates to fall as the euro gets stronger in this event.
  • Nothing significant or surprising – Rates will stay within this range of 1.1550-1.1620

The data releases come out over a 90 minute period starting at 12:00 noon GMT. If you have a currency need and want to move on a SPIKE or time your transfer well over these events, feel free to contact us here for a personal strategy in the FX markets or register your interest for SPIKE notifications by emailing your situation to myself Steve Eakins at hse@curerncies.co.uk

Thank you

GBP/EUR Rates Likely to Stay Volatile (Matthew Vassallo)

GBP/EUR exchange rates have continued to cause investors headaches, with the pair showing little signs of reversing the recent trend. Prior to Christmas we were used to seeing small daily movements, yet since the start of 2013 we have seen the currency pair spike by well over a cent in less than 12 hours, on multiple occasions.

This means forecasting becomes increasingly difficult, with positions being lost and gained extremely quickly. It also means that any developing market trends are harder to pinpoint as one week it seems as if the EUR is rallying, only for negative reports to surface inside the eurozone which reverse the trend. Similarly the Pound has come under pressure against all the major currencies during the last 10 weeks but has still managed to claw back a couple of cents against the euro, despite a run of negative economic data and a stagnant UK economy.

What we can say for certain is that both the UK and eurozone economies are struggling amid poor growth forecasts, record trade deficits and high unemployment. Whilst both economies continue to stagnate it is difficult for the markets to decide which is recovering at a better pace, or whether either is at all. It seems that each new week brings a new viewpoint or story and depending on who you speak to at any given time, you will hear mixed reports on whether it is actually the UK or eurozone that are starting showing signs of economic recovery.

Personally I expect the recent volatility to continue on GBP/EUR as we move through Q1 of this year. I do not expect rates to reach 1.20 for the forseeable future any trade opprtunities around 1.17 should be seriously considered, considering the recent pressure the Pound has found itself under and the fact that the majority of the forecasts on the pair are indicating a fall below 1.10 over the coming months.

Here at Foreign Currency Direct plc we have won multiple awards for our exchange rates and service. If you have an upcoming currency transfer and would like to be kept up to date with all the latest market movements, or would like to speak to us regarding the currency options available to you then please feel free to contact me directly at mtv@currencies.co.uk or call us on 0044 1494 787 478.

GBPEUR Spike – but will it last long – when to buy/sell the euro (Steve Eakins)

Today the GBPEUR pair moved out of its range over the last 7 days helping people buy the Euro at a cheaper price.  Earlier today UK PMI figures for the services sector, one of the largest sectors in the UK economy, showed a surprising improvement. This pushed the strength of the Pound up and has created this opportunity, the best price to buy in 3 weeks. The next question everyone asks is whether this is going to continue? My thoughts are is that there is a lot more risk of rates falling rather than climbing.

Over the next few trading sessions we have two key events from the UK which could follow the path of data so far this year for the pound.  Sir Mervyn King, the Governor of the Bank of England speaks tomorrow morning followed by the Interest Rate decisions of the EU and the UK on Thursday.  Sir King is more often than not negative for the Pound and in their last meeting to decide rates of Interest in the UK a 1/3 voted for more QE. (QE is the printing of money to help boost the economy, unfortunately as more money is printed its value traditionally falls.)  As a result if you are in the position needing to buy currency with Sterling in the next few weeks I think it’s wise to move before these releases, or at least, hedge your bets by using Stop-loss and Limit orders. These are contract options available from most currency brokers, but don’t think they are all the same. (Costs vary so make sure you compare these with ourselves to get the best price.)

Most currency experts are thinking GBPEUR rates will fall along with GBPUSD.  Some forecast GBPEUR to fall as far as parity by the end of the year and the dollar down towards 1.40.  I can understand their views but think it’s very difficult to put a forecast in for that far in advance, it’s like guessing the lottery numbers, however nice that would be.  I do however believe there is far more probability that rates will fall across the board for sterling over the next 30 days.  I would hope that most agree as we see Unemployment Climb, Inflation Climb, our AAA credit rating be downgraded, Growth Forecasts slow and the prospect of another
recession in the UK.

If you have a currency transfer to complete make sure you are getting the best price by shopping around, like you would for any financial product.  Contact me, (STEVE EAKINS) if you want to see how much we could save you. Call on the normal number or via email at hse@currencies.co.uk

Thank you.

Could this be another busy week for GBP/EUR rates? (Alistair Ryan)

This week looks like it could follow suit with the previous one when it comes to the volatility of GBP/EUR rates. The start of the week has been fairly quiet with the only data release affecting the rates seeming to be the worse than expected PMI Construction data coming from the UK. This came out at 46.8 against an expected 49.0 showing that business conditions in the UK construction sector are worse than originally thought. Anything above 50 is seen as positive towards the economy.

The key data releases to look out for this week will be a speech by the Bank of England (BoE) governor Mervyn King, held tomorrow at 9:45am followed by the BoE interest rate decision on Thursday. Historically every time Mervyn King speaks Sterling drops and I don’t think tomorrow will be any different. There is a lot of speculation in the UK at present that more Quantitative Easing (QE) could be round the corner and if this is announced it is more than likely we will see Sterling suffer not only against the Euro but all other major currencies. Adding to this is the distinct possibility that the BoE could cut interest rates on Thursday which again could have a derogatory affect on the pound.

My personal opinion is that these data releases will have a huge affect on GBP/EUR rates and I believe from early tomorrow morning we could see these rates begin their fall towards the 1.13 region. The one major saving grace could be the uncertainty surrounding Italy, the eurozone’s third largest economy, as a resolution to their election still seems a long way away.

If you have any currency requirements now or in the future it may be worth talking with one of our specialised currency brokers about the different contract options we have available to you that can help to safeguard your funds against any market movements. To gain access to our award winning rates then please contact me direct at atr@currencies.co.uk

 

GBPEUR look likely to drop this week, will it bounce back?

The current GBPEUR outlook is rather negative and the poor economic data releases being released for the UK are not helping. All of the news quite frankly has been poor and this increases the likelihood of more QE or Quantitative Easing this week. We expect this would weaken the pound and make Euros more expensive to buy…

Thursday is a very important day for anyone interested in the GBPEUR rate. Should the Bank of England decide to embark on more QE we could well see the pound fall by a cent or two. What this also does is reduce the chance of any improvements in the short term on the exchange rate. It underlines the poor performance of the UK economy and signals further challanges ahead.

If you are considering a currency transfer involving the GBPEUR rate this is the time to take stock.

If the Bank of England do step up their monetary easing programme I would expect to see the pound weaken once more. Recent comments from members of the Bank of England have made it clear that they are happy for a weak pound as it is supposed to be helping our exports which may just help the economy in the long run.

Tomorrow we have Services data which can also affect sentiment and may highlight whether or not the Bank of England will announce more stimulus on Thursday. This is not a good sign for our economy and could be the start of further losses. At present sterling exchange rates have lost 7.3% this year against the USD and 6.5% versus the Euro. While we are reaching all-time lows against the Australian & New Zealand Dollar.

If you do have a requirement to make over the coming days or weeks then I would potentially look at things before the decision this Thursday. If you are planning on buying a property or importing for your business and your completion is fast approaching then I would consider your option of a forward contract (buying your currency without paying up front for it). Please do contact me if you would like more information on this contract option as it gives you the peace of mind to know exactly how far your funds will go and takes away exchange rate fluctuations.

If you would like more news on the markets or our services, please contact me Jonathan on jmw@currencies.co.uk