Tag Archives: Bank of England

Pound makes gains vs the Euro at the end of the week (Tom Holian)

After experiencing a very difficult last few days the Pound vs the Euro has started to make a fightback vs the Euro during this afternoon’s trading session.

With the Europeans discussing what is happening with the Brexit talks things appear to be going better than previously expected. Indeed, European Council President Donald Tusk has suggested that the deadlock has been exaggerated and that ‘doesn’t mean there is no progress at all.’

Various leaders of the European Union have been involved in a two day summit and Tusk has also stated that he will try to be a ‘positive motivator for the next five or six weeks.’

Clearly the Pound has been suffering for most of the year with the uncertainty caused by the Brexit and the likelihood is that things will continue this way for some time to come. The ‘divorce bill’ which is the cost for the UK to leave the European Union has still yet to be decided and as yet we are still none the wiser.

As we go into the final quarter of the year we could get some progress with the discussions but until we agree a figure I think the talks will stall.

The other topic which is likely to have a big effect on the rate to buy or sell Euros with Pounds is the topic of whether or not the Bank of England will look at raising interest rates on 2nd November. The general expectation is that we will see a rate rise owing to inflation recently hitting 3%.

However, with average earnings lagging behind I think a rate hike could cause problems for the British economy and therefore I would not be surprised to see rates kept on hold and as the market expects a hike this could be to the detriment of Sterling.

Therefore, if you’re looking to buy Euros with Pounds it may be worth taking advantage of today’s short term spike.

If you would like further information or a free quote when buying or selling Euros then contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Will GBPEUR continue to slide?

The pound to Euro rate has been slipping since Monday when we challenged the 1.13 but were ultimately unsuccessful as investors looked to the uncertainty surrounding a UK interest rate hike. The next direction on rates is all going to come down to, in the main, the prospect of a UK interest rate hike and then a Eurozone QE taper. I personally see GBPEUR losing more ground and retesting the 1.10 level in the coming weeks and months.

QE is Quantitative Easing and it is effectively pumping money into an economy through the purchase of assets and bonds by a central bank. The European Central Bank is currently engaging in €60 bn worth per month and investors believe they will scale this back. What this means is that the Euro will on such news, ore than likely strengthen.

Overall expectations are for the Euro to rise in value longer term but just lately the worries over Spanish independence and also the Austrian and German elections have seen the Euro weaker. Longer term I feel the strength in the Eurozone economy will see it through, I see more chance of the ECB acting to reduce their QE than the UK and the Bank of England raising interest rates.

If you are looking to buy or sell pounds against Euros the next two weeks are critical and will likely lead to swings and opportunities that might not be around for long. The best strategy I believe is to look at the market with our expert assistance to try and determine the most opportune moments to capitalise.

Sometimes exchange rates spike for just a few seconds and it is only through being prepared that we can help you. We are here to help you maximise any transfer, for more information on getting the best rates of exchange plus expert service and assistance, please email me Jonathan Watson on jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you and helping you maximise your exchange.

 

All eyes on Inflation figures this morning (Joseph Wright)

This morning could be important for Sterling exchange rates, not just this morning but moving forward as analysts are expecting to see UK inflation levels hit a 5-year high.

The weakening of the Pound since the Brexit vote has pushed up the rate of inflation in the UK, and for a while now the inflation level has been well above the Bank of England’s 2% target. Many analysts in the city are expecting to see the rate hit 3% for September, and if this happens there is a high chance that the Bank of England may look to hike interest rates for the first time in over 10 years.

A 3% inflation level would be a 5-year high and the governor of the Bank of England has hinted at hiking rates as soon as next month.

A high reading this morning would likely result in Sterling strength as the markets would expect to see a rate hike from the BoE, and at the same time if the inflation level is lower than expectations, I think there’s a chance the Pound would fall.

Mark Carney will also be speaking later this morning as he testifies to MP’s on the Treasury this morning. It will be interesting to see whether he discusses inflation and potential rate hikes and if he does it will be interesting to see how the Pound reacts.

Aside from today’s busy morning this Thursday could also be busy as Retail Sales data will be released which could impact Sterling depending on how the figures perform.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Events that could impact GBPEUR exchange rates (Dayle Littlejohn)

The main economic talking points at present which have the potential to have a major impact on GBPEUR exchange rates are if the European Central Bank  makes adjustments to the quantitative easing program on October 26th and whether the Bank of England will raise interest rates on November 2nd.

Members of the European Central Bank including the President Mario Draghi, have hinted that decisions could be made in October. However inflation numbers fell last month therefore I don’t expect the ECB to make cuts this month. Nevertheless the chances that they will hint towards making cuts in the near future are high, therefore this event could lead to euro strength.

Even though GBPEUR exchange rates have been on the decline in recent weeks, the market has priced in that there is a strong chance the Bank of England will raise interest rates on the 2nd November.  Due to the pounds surge throughout September I expect some of the inflationary pressures to have been curbed. Couple this with a poor run of economic data throughout October the likelihood of an interest rate hike I believe have diminished.

If my predictions above materialise I expect GBPEUR will fall below 1.10 throughout November. Good news for any clients selling euros to buy pounds. 

Short term many of the ECB members are speaking today. Know doubt one of the members will be quizzed about quantitative easing and interest rates. Speculators will be watching closely to see whether any hints are made to tapering. If you are converting GBPEUR short term, today’s event could have a major impact on the exchange price you receive.

If you are converting GBPEUR in the upcoming months and are looking to achieve competitive rates of exchange whilst receiving regular economic information feel free to email me the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with the options available to you along with the process of converting currency. My direct email address is drl@currencies.co.uk and I look forward to receiving your email.

Quiet end to the week for UK data releases, what could cause the GBP/EUR rate to move this week? (Joseph Wright)

Those hoping for better Pound to Euro exchange rates have taken a knock this morning after the much publicised Catalonian independence situation has cooled for the meantime.

Yesterday evening the Catalan President, Carles Puigdemont and other regional leaders signed a declaration of independence, but interestingly chose to suspend the move allowing some time to negotiate with Spain.

The situation had been under the microscope in recent weeks and was seen as a potential downside to the Euros value as political instability is often a reason for currency weakness, and I expect the cooling of this situation for now at least to take some pressure off of the Euro.

The Euro is up this morning against all major currency pairs, and at the time of writing the Euro to Pound rate is trading at its day highs.

There is little economic data out for the rest of this week that involves the UK economy directly, so I expect to see the GBP/EUR driven by sentiment or Eurozone specific data releases. The ECB president, Mario Draghi will be speaking tomorrow at 3.30pm so I expect markets to be glued to his comments as is normally the case when he speaks.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

GBPEUR plummets due to Theresa May

UK Prime Minister Theresa May delivered a Brexit speech yesterday which was interrupted by a prankster who gave Theresa May a fake p45 and claimed it was from Boris Johnson. The prime minister tried to stay composed however she failed to keep it together and the speech has left investors questioning will the Prime Minister last much longer.

Some Conservative MPs have rallied behind Mrs May however it’s being reported that dozens of Conservative MPs are asking the Prime Minister to step aside.  Bookmakers Betway have now cut odds to 5/6 that Mrs May will resign before the next election.

In other news Germany’s BDI industry associate has warned UK companies to make provisions of a very hard Brexit as the UK government is lacking a clear concept on Brexit. This has caused the pound to plummet in value against the Euro and GBPEUR exchange rates have now lost over 2 cents in the matter of a few trading days.

This afternoon Bank of England member Andy Haldane is set to address the public if he continues with the Bank of England stance of raising interest rates  short term sterling could potentially recover some of the losses.

For further information in regards to GBPEUR exchange rates feel free to email me with the reason for the transfer (company goods, property purchase) and timescales you are working to and I will respond with the options available to you and the process of using the company I work for drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

Pound to Euro rate drops as UK Construction sector contracts, will today’s data push the Pound lower? (Joseph Wright)

Despite issues within the Eurozone at the moment such as the Catalonian independence referendum, the Pound fell against the Euro yesterday after Sterling weakness outweighed Euro weakness.

The past week has yielded some negative data for the Pound which has seen it dip from its highs last month of 1.14. Revised yearly GDP figures were revised downward to 1.5% from the previous figure of 1.7%, mortgage approvals were down by 3000, manufacturing in the UK dropped slightly and UK construction figures dropped quite heavily yesterday.

Today’s data release covers the services sector within the UK which is arguably the more important release as the services sector covers around three-quarters of the UK economy and therefore the figure tends to be watched very closely.

Aside from today’s data release a member of the Bank of England, Andy Haldane will be giving a speech later this week which could cause further movements between the GBP/EUR rate if any hints at future monetary policy are given, especially after talk of an interest rate hike from the BoE has begun to heat up in recent weeks.

The situation in Catalonia looks set to continue which I think could push the Euro lower, so it will be interesting to see if the Pound will recover back to its August highs if the data out of the UK turns more positive.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

How will the pound perform against the Euro ion the next month?

The pound has been dramatically rising against the Euro on the back of expectations that the UK will raise interest rates before February of next year. Investors have piled into the pound taking up speculative positions on a belief that the British pound will be worth more in the future. The pessimist in me would point out that we have not seen any interest rate hikes in the UK in ten years and whilst there is more evidence at present for a hike, ultimately I don’t think this is very likely and sterling will fall back.

Looking at the Euro, the weakness we are seeing is the result of the German elections which has seen Angela Merkel losing support and the far-right gaining support. This is putting real pressure on the Euro which has weakened and I believe it will weaken further in the future. I expect to see GBPEUR lose value up to 1.12 before rising back to potentially 1.16 in the coming weeks.

Overall there is a feeling the pound will rise further and whilst I am of the opinion it will fall back quickly, there is more than likely a chance that the ultimate move will be lower. If you have a transfer buying Euros with the pound it is looking like it will continue to be a very expensive transfer as the pound struggle to shake off the Brexit worries.

If you are looking to make a transfer in the future then making sure you have all the relevant information on the rate is crucial to getting the best deals. For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you.

Will GBPEUR rise on the German election?

Many clients are looking to the German election as a possible event to which could create some fresh opportunities on the GBPEUR exchange rate. Many clients are predicting the pound will lose value against the Euro expecting the Euro will strengthen on the back of renewed political certainty in the region. Angela Merkel is widely predicted to win the Chancellorship, the market moving element will be the extent to which any anti-EU or immigration party performs in the share of the votes.

Overall the Euro is significantly stronger against the pound compared to the last few months and years but in the last few weeks the pound has fought back, mainly on the back expectations the UK will raise interest rates. Markets are predicting the UK will raise interest rates in the future but personally I would be skeptical about this happening. Nevertheless the market has to price this potential outcome into the rates and this is the reason for the strength of the pound lately.

If you have a transfer buying Euros with pound you are almost 5% higher than the lower points only two weeks ago. It is unlikely this will just keep rising particularly with the Euro performing so well on the back of improved political certainty in the region. Therefore clients buying Euros with pound should be very conscious of the potential for further setbacks or surprises working against them in the same fashion as events have helped them.

If you have a transfer to make in the future buying or selling Euros then why not speak to me by emailing jmw@currencies.co.uk, we can then help guide you through the processes and expectations on the rates plus ensure you get the best rates in the market.

Pound hits 2 month high against the Euro following Bank of England meeting (Tom Holian)

Sterling Euro exchange rates are now trading at their highest level since July after the Bank of England claimed that they may be considering raising interest rates earlier than markets currently expect.

Bank of England governor Mark Carney said that he was pleased with UK economic growth which has been positive in recent months and combined with record low levels of UK unemployment this could be a justification for raising interest rates.

Inflation continues to run high after hitting 2.9% during August which is the highest in 5 years and this also helped the Pound to make gains vs the Euro.

Indeed, rumours are that the Bank of England may be considering raising interest rates early next year compared to the previous expectation of 2019.

However, I don’t think we see a rate hike coming anytime soon so I think this was just posturing in order to help the Pound make gains.

On Friday next week Prime Minister Theresa May will be in Florence to set out her vision of post-Brexit Britain in which she will talk about the UK ‘leaving the EU but not leaving Europe.

This could potentially cause a lot of movement for GBPEUR exchange rates so keep a close eye out for what may happen to rates at the end of next week.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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.

A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Will GBPEUR keep rising?

The pound has risen to fresh 3 month highs against the Euro as we get closer to understanding when the Bank of England might raise interest rates. Overall there is a much stronger belief that the Euro will rise after the German election but of course there are no guarantees as to what will ultimately happen down the line. It would not be surprising to see this rally for the pound carry on but of course the German election will be a thorn in the side of Euro buyers next week.

The actual election is on the 24th September but that is a Sunday so Friday next week and Monday will be the main days we will see movement on the currency markets. Therefore if you have a transfer to buy or sell Euros for pounds making some plans around the upcoming events is sensible, I am sure if you need to buy Euros and you see the rate go back down to 1.10 you would be most disappointed!

The pending German election could be a good opportunity for any Euro sellers who failed to capitalise on the improvements we saw two weeks ago to recoup some losses. However overall I would not be surprised to see the pound much stronger overall owing to the outcome from yesterday’s Bank of England meeting.

If you have a transfer to make soon or even in the coming weeks then making some plans around this latest twist on the market is I believe very sensible. For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you in the future.

Sterling rallys against the Euro following Interest rate decision (Daniel Johnson)

Is Sterling’s advance warranted?

Today saw the UK interest rate decision. The Monetary Policy Committee (MPC) consist of nine members who vote on whether there should be a change in rates. Today’s vote came in at 7-2 in favor of keeping rates on hold. It was the speech after the event that caused sterling to gain strength.

Mark Carney, the governor of the Bank of England (BOE)  spoke following the discussion and stated the BOE may need to adjust interest rates in the coming months. In my opinion this is jawboning, talking up the value of the currency  as apposed to making an actual change to monetary policy, let us not forget the vote was 7-2 to keep rates on hold.

They are justifying a potential hike on the rise in inflation to 2.9%. Inflation is only a positive to an economy if average wage growth is increasing at a similar pace. Wage growth fell to 2.1%, something the BOE have seemingly swept under the carpet. I believe a rate hike is not the solution to the inflation problem. Brexit is the reason for the weak value of the pound and in turn the rise in inflation due to the increase in cost of exports, a solution to the problem would be clarity on Brexit and the pound will rally with out monetary policy action.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

 

 

 

GBPEUR holds steady above 1.10

Yesterday the Office for National Statistics released the latest Consumer Price Index numbers for the UK and inflation had risen 0.3% compared to last months figure of 2.6%. With inflation now sitting at 2.9% it appears that speculators have purchased the pound in anticipation that the Bank of England could give some indication about a future interest rate hike on Thursday.

However I actually believe the complete opposite and wouldn’t be surprised to see the Governor of the Bank of England Mark Carney to talk down sterling. In recent weeks the Governor has made it clear that the weaker pound is the reason for the shift in inflation and the Bank of England will act off the back of Brexit developments.

With this in mind I believe the spike above 1.10 is a spike and in the upcoming weeks GBPEUR exchange rates will fall back towards the 8 year lows we were experiencing only 2-3 weeks ago. Therefore anyone looking to purchase euros short term should consider buying there euros upfront. For euro sellers rates are still fantastic however if you can hold your nerve rates could improve towards the end of the month.

If you reading this website for the first time as you need to convert GBPEUR, feel free to email me with the reason for the transfer (company goods, property purchase) and timescales you are working to and I will respond with my forecast and the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

If you are already using a brokerage and would like to a free quote email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands.

Common clients I help on a daily basis are Sole traders, MD or FD of a company, property buyers and sellers. If you are one of the three and are currently using the bank to transfer your currency you need to be made aware that you could be saving money!

 

 

Sterling flat despite positive words from a key Bank of England figure (Joseph Wright)

Sterling has failed to see a boost to it’s value this morning despite a member of the Bank of England suggesting that its time for an interest rate hike in the UK.

The member is Michael Saunders and his comments won’t of come as a surprise to many after his votes to raise the rate in the last two voting meetings. The current Pound to Euro exchange rate is sitting at 1.0850 after hitting a new 8-year low earlier this week due to Brexit uncertainties.

There have been a number of predictions for the Pound to Euro rate to hit parity within the next year and at the moment we’re not far from this level as Brexit fears continue to weigh on sentiment surrounding the UK economy. The fears mostly surround how the UK is yet to agree on the final Brexit bill and also the European Commission becoming frustrated with a lack of clarity from the UK regarding it’s plans.

A little later this morning there will be the release of Eurozone Inflation levels for August which could potential move the markets, those following the GBP/EUR rate should keep an eye on releases like this and we can help keep our clients updated if they wish.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Pound to Euro rate in focus as it’s trading at an 8-year low, will the sell-off continue? (Joseph Wright)

Sterling is continuing to come under pressure this morning after breaching the 1.09 mark during yesterday’s trading session.

The breach of 1.09 has continued this morning as the pair are now trading at their lowest levels since 2009, with 1.0868 the lowest level the pair have hit so far.

This comes at a time where risk appetite worldwide is on the decline after US President Donald Trump’s threat to end the NAFTA agreement and shut down the US government if he doesn’t receive funding for the wall he plans on building along the boarder of Mexico.

There have also been a number of forecasts from major financial institutions recently suggesting the Pound could fall as low as 1 for 1 with the Euro, with HSBC, Morgan Stanley and Citi all making this same prediction for the pair in 2018.

Should these predictions comes true then it may be worth looking into the current exchange rates if you’re planning a large GBP to EUR transfer as there is still some distance to go should they be correct.

Tomorrow at 9.30am there will be the release of UK GDP data for the month of July, and there could be movement between GBP/EUR if this figure is released some distance from its expectation.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

The number of GBP to EUR parity forecasts increases, will GBP/EUR hit 1.1 by the end of the year? (Joseph Wright)

The talk of Brexit negotiations beginning badly is having an impact on the Pounds value against all major currency pairs, but it appears that the GBP/EUR rate has been the biggest loser in all of this so far.

Recent comments from David Davis, the Brexit secretary have added fuel to the fire after he revealed that Michel Barnier ‘is getting quite cross with us’. Michel Barnier is the EU’s chief negotiator which just goes to show that the UK going to need to get a move on regarding its Brexit negotiation plans.

With there being less likelihood of an interest rate hike this year from the Bank of England now that inflation pressures have subsided there have been a number of major financial institutions forecasting parity between the Pound and the Euro in 2018.

In just the last week, Morgan Stanley, HSBC and now City Index have all made this prediction which gives those planning on making a large GBP to EUR transfer a decision to make as the rate is currently just below 1.10.

If you would like to be kept updated regarding the Pound to Euros price movements do feel free to register your interest with me.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Will the Pound continue to fall against the Euro? (Tom Holian)

The Pound has crashed against the Euro during yesterday’s trading session after the Bank of England confirmed that interest rates will remain on hold for the 11th month running. The split this time round was 6-2 which was lower than June’s vote which was 5-3.

One of the members of the Monetary Policy Committee Kristin Forbes has left since the previous meeting and the incoming Silvana Tenreyo was unlikely to have caused a surprise.

The Bank of England have also downgraded the UK’s growth forecast for this year from 1.9% to 1.7% as well as cutting next year’s growth forecast from 1.7% to 1.6%.

This has led the Pound to fall against the Euro to its lowest rate since October 2016 and this is largely part to the Brexit discount currently on offer.

Bank of England governor Mark Carney has spoken out about the uncertainty caused by the Brexit and this is causing a lack of investment in the UK until a resolution is reached which is likely to take a long time.

One good thing for the British economy is that UK inflation appears to be falling at the moment from 2.9% to 2.6% but for the Pound this is not good news as it provides further support to keep interest rates low for a long period of time.

If you’re in the process of selling a property in Europe and would like to take advantage of these current low exchange rates to buy Pounds then feel free to get in touch.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome 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.

A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

GBP/EUR Short Term Forecast – Will Sterling Strengthen? (Ben Fletcher)

Sterling has been under continuous pressure these past few months presenting the opportunity for people to sell Euros back at some of the best levels in 9 months. Each week the range in which the GBP/EUR rate resides at has fallen nearly a cent suggesting there is more potential for the rate to continue to fall. If you have been waiting to sell Euros back to Pounds and are still holding on, the next month might be the best time.

German Election

At the end of September Germany will head to the polls in what is thought to be a non-event to re-elect current Chancellor Angela Merkel. Whilst Merkel is the major favourite there has been some surprising events that have taken place around the globe in the past year and anything unexpected could create Euro weakness. At the moment there doesn’t really appear to be any major rivals and the concern that Nationalist parties were coming back seems to have died down. Merkel was heavily criticised by many in her own country for welcoming 1 million refugees, however in the light of no other viable leaders her tenure looks set to continue.

From the perspective of the GBP/EUR rate, over the next month we may see some Euro weakness start to creep in due to election uncertainty. But by that point the GBP/EUR may be close to moving below the 1.10 level, which in my opinion would be a best case scenario for Euro sellers.

If you have a upcoming requirement you would like to discuss or ask any questions about the comments please send me an email briefly explaining your requirement at brf@currencies.co.uk. I would be more than happy to share my thoughts and try to help you develop a plan that will enable you to maximise your transfer. I will aim to respond within a few hours.

What next for GBPEUR rates?

Overall the belief on the GBPEUR rate is that it will now continue to ebb lower and lower as the uncertainty over the UK’s political and economic outlook is overshadowed by much improved economic data and also political certainty in the Eurozone. Those who predicted the demise of the Euro and the Eurozone a few years ago are now facing some serious questions as the outlook for the Eurozone continues to improve. If you are selling Euros the likelihood of further improvements cannot be ruled out. The extra 2 cents gained for Euro sellers this week is an extra £1500 in your pocket per €100,000 transferred. If you wish to learn more about rate movements and how much you could save please contact me jmw@currencies.co.uk.

If you have a transfer to make buying or selling the pound and Euro the current trend is looking likely to favour the Euro but there could be surprises on the way. For example Mario Draghi was actually quite ‘dovish’ or soft in his comments yesterday during the European Central Bank (ECB) Press Conference. Nevertheless the Euro rallied essentially as Mario revealed there are plans to taper their bond buying purchases in the future.

This strengthened the Euro but Mario didn’t actually reveal too much on timings, that means that the market might actually have overreacted to his comments. This can often be the case on markets so Euro strength is neither guaranteed or assured. However looking at the overall picture and particularly against a weaker pound a further decline in the GBPEUR rate looks to me likely.

If you have a transfer buying or selling Euros we are here to help with the planning and execution of any transactions for the future. We can help with the forecasting and devising of strategies to help you maximise the transaction. Thank you for reading and please contact me if you would like to discuss anything further by emailing jmw@currencies.co.uk.

UK Data and Carney to Dictate GBP/EUR (Ben Fletcher)

This we will see a whole flurry of UK data including the Producer Price Index along with the latest Consumer Price Index. The CPI data which currently sits at 2.9% compared to this time last year, is a key indicator of inflation levels. If this level moves above 3%, which it isn’t expected to however the recent climb would suggest other wise, he market could move. If inflation continues to rise faster than average earnings consumers will start to feel the pinch, however the Bank of England could have a solution.

Governor of the Bank of England is expected to deliver a speech just after lunchtime today discussing his latest thoughts on the UK economy. The big question for investors at the moment is the potential of a UK interest rate hike in the short term. The Bank of England can encourage people to stop spending by raising interest rates, alternatively if people start to save more that has consequences on retail as a whole.

There is a very fine balance with so much uncertainty surrounding namely Brexit. Whilst the data and speeches are happening in the UK, David Davis along with his Brexit negotiations team are sat around a table with the EU team. We’re not likely to see any outcomes to the talks in round two of discussions, but we may receive news that the talks are going well and any concessions for Sterling will be seen as positive.

When the markets are this volatile there will always be spikes and drops, making timing a transfer vital to maximise your funds. If you have any questions with my forecast above or would like to simply discuss an upcoming requirement you have please send me an email to brf@currencies.co.uk. I would be happy to share my thoughts with you and I may be able to offer a viable solution to help you complete a trade, as I have several years experience working for a brokerage