Monthly Archives: May 2013

Eurozone Unemployment Reaches Record High (Matthew Vassallo)

There was more bad news for the Eurozone today as their latest set of unemployment figures were released. Unemployment has now reached a new record high, which is another striking blow for an already destabilised region. Unemployment now stands at 12.2%, with an extra 95,000 people out of work, making a total of 19.38 million. Out of the 17 countries who use the EUR both Spain and Greece have unemployment rates of over 25%, a truly shocking statistic.

GBP/EUR rates have been fairly flat during Thursday’s trading, with a small spike for Sterling following the negative news emanating from the Eurozone. Despite this positive movement GBP is still finding resistance around 1.17 and I still feel a move through 1.20 is unlikely based on the current market conditions. We also need to factor in the likelihood that we will see further Quantitative Easing over the coming months, which is also likely to devalue the Pound.

Here at www.eurorateforecast.com we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements, then please call us on 0044 1494 787 478 or email me directly at mtv@currencies.co.uk.

Further Quantitative Easing to Weaken Sterling?

One week on from Sterlings weakening against the Euro, the name Mark Carney may have further influence on GBP-EUR rates.

Mark Carney takes over on July 1st as the new governor of The Bank of England, replacing Sir Mervyn King. Carney has successfully guided Canada through the global recession as he has been a popular appointment.

It is clear that the UK needs stimulus to grow back to the level we were before the global recession. Further Quantitative Easing (QE) could be an option, as it has been very successful in supporting and re-generating the US Dollar. Should Carney vote for further QE and influence other members of the Monetary Policy Comittee (Bank of Englands decision making committee), then although an important economic stimulus, Pound Sterling could take a big hit against the Euro.

I believe that is the UK does introduce QE, or even openly discuss it as viable option, then Sterling could potentially be trading back in the 1.13 / 1.14 region.

This is a strong warning for those with a potential GBP to Euro requirement. For example a purchase of €200,000 would cost an extra £7,000!

Should you have an upcoming transfer requirement, please feel free to get in contact either by email AJB@currencies.co.uk or call on 01494 725 478 and ask for Andrew.

Thank you for reading

Andrew Bromley

Strategies to maximise currency exchanges on GBPEUR

I expect GBPEUR will remain range bound between 1.16 and 1.1750 this week. If you are considering any currency exchanges involving buying Euros I would suggest buying sooner, if you are selling euros to buy sterling, then holding on may not be too bad an idea to see if it gets better.

This analysis is all based on the fact that the pound is once again in the firing line and whilst the positive GDP data for Q1 should provide decent support, the chance of further losses if the UK data is disappointing look to me fairly high. Let us look at the facts, there are a few key reasons that sterling will remain weaker in the coming weeks and months including:

– The prospect of the UK leaving the EU. The uncertainty as to just how this will affect the UK and sterling is a reason sterling in unlikely to make significant gains. This uncertainty appears to me to holding back the pound.

– The UK government is losing credibility over plans to tackle UK debt. The fear is that lasting damage has been done to the UK’s recovery that will hurt not only growth in the future, but also efforts to tackle the UK’s debt problems .

These factors are well publicised and as explained will not alone necessarily cause the GBP to suffer major losses. Combined with poor UK data however they mean the chance of the pound making any significant comeback look severely limited.

For more information on everything driving your GBPEUR rate, please feel free to contact me Jonathan on jmw@currencies.co.uk

Sterling starts to fall but will 1.16 be on the cards for sellers (Steve Eakins)

Following yesterday UK Inflation Figures the price of sterling fell yesterday across 17 of the 18 major currencies.  The only currency pair that did not fall on Tuesday’s trading was GBPZAR which climbed by over 0.5%.  GBPEUR fell by over 0.5% GBPUSD fell by nearly a 1% all within a 60 minute time frame.  This again goes to show that the markets can move very quickly and easily add costs very quickly to any house purchase, euro based invoice or international mortgage payment.

UK Inflation fell further than previously expected matching my personal thoughts mentioned in my blog yesterday. (Click here to re visit it.) This is probably not the bottom of the market this week as I expect a further fall today following UK Bank of England minutes and UK Net borrowing figures. All pointing towards this afternoon being the time to buy pounds probably over the next 10 days.  Sellers of the pound are of course concerned as GBPEUR will probably fall under 1.17 and GBPUSD under 1.51, however there is the potential for a rebound tomorrow.


On Thursday we have the UK GDP figures and UK Retail figures which I expect to show an improving picture for the UK.  Retail is connected to upwards of 60% of the UK Economy so I believe could quite easily help retake the losses seen over the last 24 hours.  Clients selling the pound then may wish to wait until tomorrow to buy their currency. The risk however is that the day gains we could see tomorrow may not take back the losses we may see later today.

If you’re considering making a foreign currency transfer Buying Euros, Buying Dollars, Buying Pounds or any other currency then feel free to contact me directly for a free quote. Working for one of the UK’s leading currency brokers I am confident we can save you money compared to using your bank. Feel free to send me an email Steve Eakins hse@currencies.co.uk

 

When to sell or buy euros this week?

The timing of your exchange is critical to getting the best exchange rate on an international money transfer. Holding on or moving sooner by only a few days can literally save you thousands of pounds. But how do you know when to hold on and when to move quickly?

There is of course no way of exactly knowing what will happen on the rate but a bit of planning and research with one of our team can help to get a better deal. Looking ahead to this week the pound looks like it could have a better day on Wednesday whilst Thursday and Friday may be better days for the Euro. That being said this week I would look to buy Euros on Wednesday, sell on Friday.

Wednesday sees the release of the Public Sector Net Borrowing figures, Retail Sales and the Bank of England Minutes. There is a high chance this will create some sterling volatility! There is an expectation borrowing could come in lower than expected and lower than the previous month which would be good news for sterling. Also it is likely there will be nothing new for the pound in the Minutes from the Bank of England which would lead to a slight relief rally for the pound. If we are still floating around 1.18 Wednesday morning a push higher to 1.19 would not seem out of the question.

Thursday we have the latest revision of GDP (Gross Domestic Product). If you have been keeping an eye on the rates, this was the event which last month pushed the pound close to 1.19 against the Euro. The recent confidence for sterling has been underpinned by the last release. Any deviation from that hallowed ‘0.3%’ growth could easily cause the pound to suffer (or gain).

Friday sees attention back in Europe with German business confidence surveys and German GDP. I expect the Euro to make some gains on this release although of course it could go the other way.

If you find the above interesting and would like to learn more or even get a slightly longer term forecast please contact me. The best way to ensure you do not miss out on the best rates of exchange is to register an interest with myself. I can then keep an eye on the market for you and let you know of any trends that develop so you can act quickly. For more information or for a free, no obligation discussion of your exchange please feel free to contact me Jonathan directly on jmw@currencies.co.uk or call 01494 787 478 and ask to speak to me Jonathan.

Thank you

GBPEUR rates remain steady after a busy 24 hours. (Steve Eakins)

Over the last 36 hours there has been a lot of data to take in for GBPEUR traders.  Generally the picture has improved for the UK and weakened for Europe resulting in GBPEUR levels climbing.  In summary we have seen a majority of Europe confirming that they have seen negative growth in the last quarter, even the engine room of Europe, Germany, only scraped some growth of 0.1%.  Over all Europe is now in its longest recession since records started back in the 90’s.  The UK side also had bad news with unemployment climbing even though the number of people claiming benefits actually fell.  The Quarterly Inflation Report yesterday also confirmed a more positive growth prospect for the UK which is now expected to grow just over 1% this year.

Today we have seen consumer confidence coming out for Europe which reported figures as expected resulting in little movement in the markets.  Traditionally in the build up to a data release the market will price in the expected release meaning that when the real figures come out markets will not move much. However if the data is different from expectation we see the rates price this in quickly creating a SPIKE in the market; whether it is better or worse will determine the direction of the move.

My view is that the Pound and the Euro will probably remain rather range bound over the next few days, trading between 1.1750-1.1850.  It does seem that the single currency is going to continue to be in trouble for some time to come.  Growth is still negative for a majority as a massive 17 million people are unemployed across Europe.  (No wonder some MP’s want out of the Eurozone.)  People will have to return to work for the euro to gain any real strength and there is a similar picture for the UK economy long term.

Events to watch out for over the next 7 days are:

  • UK Production Price Index,
  • UK Retail figures,
  • Bank of England minutes,
  • UK GDP figures, and
  • UK Mortgage approvals.

Along with a few key reports from Europe.  This data could move the market by upwards of 2 cents next week adding a potential cost of £2,200 on a €150,000 purchase.

If you want to be kept up to date on these releases and would like some assistance with a currency transfer feel free to contact me here, Steve Eakins via email at hse@currencies.co.uk or on the normal telephone number.  Our award winning service has been helping people save money on their exchange for over 13 years so I am sure we can help you to. Simply put if we could not save you money we would not be in business.  It could be an email that saves you thousands….

Look forward to hearing from you.

GBPEUR rates of exchange – when to trade this week (Steve Eakins)

Currency markets have already been surprised this week when news from Westminster in London lost the pound over 0.5% within a few hours.  This was following a political event with members of all parties calling for a vote on whether the UK should stay within the EU or not.  Even though the news is surprising the reason why such a big loss was seen is due to the fact that members of the prime minister’s own party went against him.  This creates some political uncertainty as it makes the government look weaker and this in turn results in sterling weakness.

The news was a surprise to the market and may very well have been missed by people not watching the market.  If you are in that situation the use of a specialist currency broker can help, being your eyes and ears in the market 10 hours a day means you can been kept up to date with breaking news so you can make an educated decision on when to trade.  It is this kind of information which can make thousands of pounds difference on a currency trade within a matter of hours.  If you are interested in learning more contact me directly for some more information via my email (Steve Eakins) hse@currencies.co.uk

What is next for exchange rates?

This week the busiest day by far is tomorrow, Wednesday.  We have a number of reports from both sides of the channel which could result in a movement of over a 1%.  This kind of movement would add €1,800 on a £150,000 euro purchase.  The data releases are:

  • German GDP figures
  • Italy GDP Figures
  • French GDP Figures
  • UK Quarterly Inflation report
  • UK Unemployment Figures

The expectation is that GBPEUR will probably climb slightly tomorrow but with so much data that could surprise the markets it makes the allusive Crystal ball particularly murky…

If you are in the market for currency, speak to an expert to see how you can get the most from the market. Call us for a personal view and assistance on the normal number or via email at hse@currencies.co.uk

Will GBPEUR hit 1.20 soon?

Wobbles yesterday for the pound have proved short lived but remain. Fears over the damage to the UK economy from pulling out of the EU hurt sterling but it has ebbed back up. I think very soon in the coming weeks and months a 1.20 trading level is realistic but a few things need to happen.

Sterling needs to avoid further problems including:

Europe – Worries and uncertainty over the UK’s role in the EU evidenced by Tory rebellions undermines confidence in sterling. If Cameron can lead where many others have failed and unite the party over Europe the pound will find strength.

Economy – The pound has found support as growth returns to the UK. Various revisions by the ONS (Office of National Statistics) of last year’s data questions whether we were even in a double dip recession last year. The latest data by the NIESR (National Institute of Economic & Social Research) showed 0.8% growth in the UK for the last 3 month period. This is better news and has helped the pound to find favour. The economic data needs to keep improving and showing growth to see further gains for the pound.

Eurozone Worries – We need some negative news to cause a Euro sell off. Quite frankly this could come at anytime! I have already mentioned how I felt the Euro has taken a turn for the worse in recent weeks as investors previous confidence rubs off. Worse than expected economic data plus looser economic policy is all serving to turn the screw on the euro and means we could easily see rates tick up a bit higher for euro buyers.

Are you selling euros? Do not be too disgruntled if you missed selling euros at 1.15, the close to two year low earlier this year. The changes in market sentiment means a return to such levels is unlikely. Any deal below 1.20 is in my opinion very good value selling Euros based on prices form last year and historical rates.

For more information and a free analysis of your current currency situation please contact me Jonathan for more information

thank you for reading,

jmw@currencies.co.uk

A host of positive data for GBP. Where next for Sterling? (Alistair Ryan)

The UK and Sterling seem to be going from strength to strength recently with more and more positive data coming out of the UK but will this Sterling strength continue? In my opinion I think there is a major possibility. Sterling has come a long way since hitting a low point after the UK lost its coveted AAA credit rating when GBP/EUR hit a year low of 1.1370 and GBP/USD went as low 1.48. As it is now GBP/EUR is sitting much prettier with the Interbank rate currently around 1.1850 and GBP/USD up just over 1.54. When UK Gross Domestic Product (GDP) figures were released two weeks ago we saw that the UK economy had grown by 0.3% in the first quarter of 2013, much better than expected and giving the pound a hefty boost as confidence oozed back in to the UK. Whilst the UK still has a poor growth outlook for the remainder of the year and we may not reach the highs of last year I still believe we could break through the 1.20 barrier with regards to GBP/EUR in the near future and possibly up above 1.56 with GBP/USD, even against a strengthening US economy. With better than expected Manufacturing, Construction and Services data coming out recently for the UK I just think that as long as these sectors of our economy keep on growing, Sterling will rise with them.

This is however my opinion and markets are prone to surprises, as the saying goes….’expect the unexpected’. There is a lot of uncertainty surrounding the Eurozone at present so if any of this can be resolved and a more positive outlook can be found then the Euro could find itself fighting back once more. As mentioned previously the US is a strengthening economy. Whilst this may be slow growth, it is growing none the less and this could create a tug of war between Sterling and the greenback.

If you have an upcoming currency requirement then it may prove prudent to speak with one of our highly experienced, professional currency brokers. We have a number of different contract options available that can help safeguard your funds against market movements. You can contact me direct at atr@currencies.co.uk

Bank of England Decision Keeps the Markets Guessing (Matthew Vassallo)

Today’s key news was the decision by The Bank of England (BoE) to keep interest rates on hold at 0.5%. This decision was widely anticipated and it therefore comes as little surprise to see GBP/EUR rates remain fairly flat all day. There was a small spike for Sterling following the announcement but nothing more than general market fluctuation, with rates floating between 1.18 – 1.1850 during Thursdays trading.

The decision was also made that would be no further Quantitative Easing (QE) at this time, which was always likely following the recent first quarter Gross Domestic Product (GDP) figures, which showed growth of 0.3%. Whilst this was certainly nothing to get excited about it has kept the wolves from the door for the time being. Personally I do not think we will not see any more major decisions by the BoE until current chairman Sir Mervyn King has departed his post, which will be taken over by former Canadian Central Bank governor Mark Carney on July 1st of this year.

The EUR may find life tough going over the coming days following last weeks decision by the European Central Bank (ECB) to cut interest their rates by 0.25%. This news will have been softened slightly by yesterdays news that German Industrial Production figures came out better than expected, which will give hope that the Eurozone’s largest economy may be starting to turn a corner, on its own road to economic recovery.

Here at www.gbpeuroforecast.co.uk we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements, then please call us on 0044 1494 787 478 or email me directly at mtv@currencies.co.uk.

GBPEUR rates before Bank of England interest news, buying euros, selling euros (Steve Eakins)

The pound is up at a near 3 month high against the dollar and fell from a 4 month high against the Euro before the key BOE meeting later today. The bank is expected to keep their asset buying program on hold for another month while they wait for the new Governor to start on the 1st of July, and keep interest rates at the record low of 0.5% where it has been for over 5 years now.

In Spain they have a key bond sale later today which follows Portugal’s first 10 year auction since their bailout in 2011. A bond auction is where countries raise capital by offering a return, they have a target volume to sell / amount of money to raise which needs to be reached and they move the interest they offer on the debt until demand allows them to reach this level. The bond markets where a key factor in bailouts being given to the PIIGS (Portugal, Ireland, Italy, Greece, Spain) over the last few years as anything over 7% is seen as unsustainable. I very much doubt that Portugal bonds which reach that high but it will be very interesting to see what kind of demand there is for a country debts where all the signs from their economy recently have given a negative impression. If there is a surprise I would expect the price of the euro to reflect it quite quickly today.

Later today we German Exports Figures are released, this is expected to show an improvement of 0.5% and if confirmed I would expect euro strength. We also have the European Monthly Meeting at 9 am which could throw in some surprises.

So buyers of the euro may want to buy early today and sellers may want to aim to ride its value up if these expectations come out as truth.

If you want to discuss how the next week could affect your currency exposure then speak to the experts by contacting us to go through it more personally. Either call and ask for myself Steve Eakins or email me directly at hse@currencies.co.uk

ECB Cuts Interest Rates – Draghi Speech Weakens The Euro

Yesterdays anticipated rate cut from 0.75% to 0.5% interestingly stregthened the Euro agains Sterling. This could be down to a number of factors, however the thought that the Eurozone could now move forward with it’s economic recovery is what potentially assisted the single currency strength. Euro sellers saw a brief window of opportunity as the Euro made ground on Sterling.

The relief was short lived however, as during Draghi’s speech  the Euro slipped back to offer Euro buyers a good opportunity to take advantage again at the 1.18s level.

Today sees European Producer Price Index data released shortly. This has the potential to weaken the Euro further, as the predictions are for smaller growth than the previous Month. This morning also sees US Non Farm Payroll data, which is often linked to Euro Strength / Weakness. All in all a busy day, and with the bank holiday arriving shortly, is it worth securing your transaction now to give you piece of mi

European Central Bank Cuts Interest Rates to All-Time Low (Matthew Vassallo)

Today’s headlines have been dominated by news that the European Central Bank have cut their interest rates by 0.25%, to 0.5%. Today’s cut now leaves the interest rate at an all-time low and GBP has certainly benefited, continuing its recent rise during Thursday afternoon trading. GBP/EUR levels are now putting pressure back on the 1.19 resistance level and this news, coupled with last week’s announcement that the UK economy has indeed avoided a further recession, has dampened EUR sellers hopes of a move back towards 1.15.

Whilst Sterling does seem to be benefiting from the on-going problems in the Eurozone, I think it is dangerous to assume that GBP/EUR rates will continue on an upwards curve. The ECB’s decision to cut interest rates was widely anticipated and to an extent, will have been priced into today’s market. Therefore I don’t think we will see GBP move much further based purely on this announcement alone. It is also important to remember that the UK economy only grew by 0.3%, according to last week’s official figures and this is certainly nothing to get excited about. The initial market reaction was one of relief, which is why GBP spiked but I feel we need to see a lot more from our economy before we see GBP/EUR move through 1.20.

Here at Foreign Currency Direct plc we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements then please call us on 0044 1494 787 478 or email me directly at mtv@currencies.co.uk.

Euro Sellers Cashing In To Avoid Interest Rate Decision

Are you selling Euros?

Have you looked at how much Sterling your Euros would buy you, if the exchange rate went back in to the mid 1.20s?

This is a conversation worth having today, as there is a strong change that Sterling could spike against the Euro tomorrow, if the  ECB cut Euro-Zone debt interest rates.

Government debt interest is a highly influential factor on rates of exchange, as it is an indicator of economic strength / weakness. Should the ECB cut the interest rates tomorrow, it would be an indicator to investors that the Euro Zone is struggling. This would make other currencies, including Sterling more attractive.

If you do have an exposure / requirement to sell Euros, please do get in contact on the details below.

I work for a market leading Foreign Exchange company, with various awards from ‘The Times’ and ‘The Telegraph’, including best exchange rates.

You can reach me on 0800 328 5884 or email me AJB@currencies.co.uk .

Andrew Bromley