Global Stocks fall leading to movement on Sterling exchange rates (Tom Holian)

Global stock indices have all crashed overnight since owing to the better than expected jobs report last Friday.

As the data was so strong this is likely to lead to the US Federal Reserve increasing interest rates sooner than may expected and this could put an end to the cheap money that has been available for the last few years. Indeed, monetary policy such as Quantitative Easing which has taken place in the UK and the Eurozone has led to stock markets going in an upwards direction.

Typically when interest rates are low then global investors look elsewhere for a strong yield on their money and this is a big reason why stock markets globally have done well hitting recent record highs during January.

Whether or not this fall will be short term only time will tell and as yet the currency market has not been affected too much.

However, I think we could see some big movements coming on exchange rates if the fall in stock markets continue.

Sterling fell against the Euro during yesterday’s trading session following the release of the latest Services Purchasing Manager’s Index data which was released at 930am yesterday morning. With Services making up three quarters of the UK’s economy the fall from 54.9 to 53.9 in December showed a fall in confidence which led to GBPEUR rates moving in a negative direction.

The Bank of England are due to meet tomorrow afternoon and if the central bank announce that they are still concerned about inflation and that policy may have to change in the future we could see a lot of movement on GBPEUR rates during tomorrow’s trading session.

If you have a need to make a currency transfer in the near future then feel free to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on and I will respond to you as soon as I can.

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