Tag Archives: GBP/EUR forecast

Will the Euro continue to strengthen and will Carillion drag the Pound down? (Joseph Wright)

The headlines surrounding the Euro at the moment are that the currency is currently trading at an all time high against the US Dollar. The gains are generally being put down to the strong economic outlook for the Euro and also expectations that the European Central Bank will begin to cut back on the current stimulus package as the economy justifies it.

Many economists expect to see the Euro hold its ground at the current levels, and when compared with the Pound I think we may even see the Euro to Pound rate improve further especially if Brexit related issues continue to negatively impact sentiment surrounding the UK economy both during and after the Brexit process.

The case for a stronger Pound hasn’t been helped in the past week as it’s emerged that the UK’s second largest construction company, Carillion is likely to go into liquidation shortly. There is up to 20,000 jobs that could be lost as a result and a number of industries and sub-contractors could also run into issues as a result of this. The company has close links with the UK government and it’s emerged that up to 8 contracts were taken out with the company by the government since profit warnings were announced.  This is likely to be looked into further and I certainly don’t think we’ve heard the end of it.

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.

What can we expect in 2018 on GBPEUR exchange rates?

2018 is looking like another volatile year with plenty of fresh news and developments in a number of areas which could see changes and shifts in the GBPEUR exchange rate. Notably, Brexit will continue to be a key driver for the pound which will see the rates inextricably linked to shifts in sentiment over the Brexit. The Euro has a number of key hurdles to overcome, mainly political like the UK.

If you are considering buying Euros you would be forgiven for checking the headlines over Angela Merkel and the Spanish situation and expecting the Euro to be much weaker. The outlook for the Euro is however still very positive despite the fear and uncertainty surrounding the political situation. Yes, the outlook for the Euro has deteriorated slightly but the prospects for the Euro still remain rather positive.

All in all, the uncertainty surrounding Brexit will I feel be more of a drag on GBPEUR than the political uncertainty in the Eurozone. We should see the market shift according to the run of events which could see the Euro weaker in March when we have the Italian election. Further negative developments on the Spanish or German situation could weigh on the Euro but as mentioned I do feel the weakness of the pound will remain more in focus once again in 2018.

If you are buying or selling Euros for pounds the exchange rate is at an important junction as we have more reasons to be positive over Brexit which has helped the pound, but a number of challenges remain ahead. If you wish to get an overview of the position or discuss further a forecast relating specifically to your position, please feel free to contact me Jonny to discuss further your currency situation.

To learn more about the year ahead on GBPEUR exchange rates and discuss options and strategy please contact me on jmw@currencies.co.uk.

Problematic German Colation could cause volatility on GBP/EUR (Daniel Johnson)

Merkel faces troubles forming coalition

There are rumours circulating that Angela Merkel could be replaced by Germany’s defence minister, Ursula Von Der Leyen. Germany is losing faith in Merkel’s ability to form a coalition. Merkel failed to build a coalition following her narrow victory in the election in September. She was attempting to unite her Christian Democratic Union (CDU) party, the Free Democratic Party (FDP) and the Greens, which was dubbed the “Jamaica alliance”.

Merkel is currently trying desperately to form a government with the Social Democratic Party (SDP). The electorate is losing faith, some of the latest polls have shown that 46% wish her to step down immediately. Political uncertainty historically weakens the currency in question, but with Ursula Von Der Leyen potentially gaining power this does not bode well for Sterling. Von Der Leyen is a firm believer in a in a federalised United States of Europe, she grew up in Brussels and is the daughter of Ernst Albrecht, former director general of the European Commission.
There is also the possibility she will attempt to strengthen the alliance with French President Emmanuel Macron as Von Der Leyen shares his views on reforms to integrate the Eurozone. This is definitely not good news for the Brexit process and could make matters even more problematic and has the potential to impact Sterling.Brexit negotiations will be a key factor in GBP/EUR exchange rates. Phase two negotiations are set to be problematic with David Davis and Michael Barnier already at loggerheads. The next phase will be in regards to trade deals and is probably the most important factor in the Brexit process. How talks progress will have major influence on Sterling value.
I think the pound is set to struggle for the foreseeable future. The pound has been range bound against the majority of major currencies and it is often difficult to take advantage of a spike when there may only be a small window of opportunity. If we look at GBP/EUR, the highest rate of exchange we have seen in the last six months was 1.15, following the announcement of an Irish border deal. There was only a very small time frame to take advantage of the situation, thankfully many of my clients managed to get their trade booked during this time frame. I had rate alerts in place to notify my clients of the spike and also called each one letting them know of the opportunity.

If you have a large currency transfer to perform in the coming days, weeks or months then I will be happy to speak to you directly as I will be willing to help you both with trying to time a transaction and getting you the best possible rate when you do come to trade. A small improvement in a rate of exchange can make a significant difference so for the sake of taking a few minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on dcj@currencies.co.uk and I will endeavor to get back to you as quickly as possible. Thank you for reading.

GBP/EUR – Where Next? (Daniel Johnson)

Brexit phase two could cause prolonged Sterling weakness

The main driver on GBP/EUR at present is Brexit. There is still a great deal of uncertainty surrounding how Brexit talks will progress. GBP/EUR hit 1.15 recently following the announcement a deal had been agreed in regards to Irish borders. The small window of opportunity for euro buyers soon closed however following stupid comments from David Davis. Davis, the secretary of state for exiting the European Union, he thought it would be a bright idea to state the border deal was not legally binding.  The pound fell in value as a result.

There was then the eleven tory MPs who managed to win a vote that any deal agreed by Theresa May at the recent European summit would have to be given the ok by parliament, substantially weakening May’s position and again sterling fell.

Phase two of negotiations is set to be far more difficult than phase one. The important issues such as immigration and trade are set to be addressed. Negotiations are expected to be problematic and lengthy. At present GBP/EUR seems range bound between 1.10-1.15

Potential Opportunity for Euro Buyers

Tomorrow Spanish regional elections will commence. There are several parties that are in favour of Catalonian independence. If it looks like Catalonia will leave Spain and indeed the EU the euro could suffer. Although Catalonia makes up a significant amount of Spanish GDP it is the threat that other regions could follow suit and leave the EU that is the threat to the Euro.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Catalonian election could create Euro weakness (Daniel Johnson)

Close election in Spain could weaken the Euro

Regional elections in Spain commence on Thursday and they are a cause for worry for Brussels. The election is expected to be close between pro and anti independence parties. I would be surprised if any of the seven parties involved mange to secure a majority victory. Political uncertainty is a main factor in currency weakness so this  could create an opportunity for euro buyers.

Catalans have a tough decision. They must stick with a unstable separatist coalition whose leaders have been placed in prison or left the country, or take a chance on alternative parties that fall in line with a united Spain which would no doubt suit Spanish Prime Minister, Mariano Rajoy’s wishes.

Recent polls suggest a lead for Catalonian secessionists who have used a the slim victory in the last regional parliament to declare independence  and cause a clash over sovereignty and popular that have caused worry far beyond Spain. There was less than half of the electorate involved in that vote.

Catalonia makes up a significant amount of Spanish GDP, but it is the threat that other regions follow suit if independence becomes a reality. If other regions, not just in Spain decide to campaign for independence this could create a serious threat to the Euro.

If you are buying euros with Sterling however be wary of hanging on for significant gains. I would suggest moving if the market hits above 1.14, the uncertainty surrounding Brexit negotiations is seemingly anchoring GBP/EUR below 1.15,it is something of a resistance point at present.

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.

 

 

 

Will rates on GBPEUR can we expect in December?

The pound has risen higher against the Euro nudging back over 1.12 this morning as the Euro softens slightly, partly on the back of concerns over the Irish political situation. Sterling is bouncing back against most currencies too on the back of the news that all banks had passed the stress tests as well. What events are upcoming in December and how will they influence the GBPEUR?

The main event for sterling I believe is the EU summit on the 14th – 15th December where the EU will decide whether or not the UK can now progress to the next stages for the trade talks to begin. Whilst the expectation is that this will all pass off relatively easily as the UK is now pledging more money to the situation, the potential for this to upset sterling remains high. Historically ‘deadlines’ with the UK and the EU see eleventh hour talks and excessive volatility.

The 21st December sees a big development on GBPEUR with the Catalonian election taking place which is effectively a referendum on independence or self rule. The possibility of this setting off fresh Euro fears is now increased, particularly when you consider there is also increased worry over Ireland, Germany and also Italy for next year.

GBPEUR has occupied a range of 1.08-1.14 in the last 3 months, with the worst fears over Brexit removed for now (eg a ‘no deal’ scenario), the potential for GBPEUR to now occupy a range between 1.10-1.15 seems more likely.

If you have a transfer to make buying or selling Euros and pounds and wish for the best rates and some of the latest news and market insight, please don’t hesitate to speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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

Budget does little to move Sterling Value (Daniel Johnson)

Budget benefits first time buyers

Hammonds’s budget did little to alter the value of Sterling today, historically this is usually the case when the budget is delivered as the expected changes are usually filtered out through the media before hand. The market moves on rumor as well as fact.

Key Changes

  • To benefit London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining £200,000 incurring 5%.
  • 95% of all first-time buyers will benefit. 80% not paying stamp duty
  • £44bn in overall government support for housing to meet target of building 300,000 new homes a year in the next five years.
  • Councils given power to charge 100% council tax premium on empty properties
  • Compulsory purchase of land banked by developers for financial purposes
  • £400m to regenerate estates with £1.1bn to unlock new sites for development
  • Stamp duty is to be abolished immediately for first time buyers purchasing properties worth up to £300k

Factors that will effect GBP/EUR – Keep an eye on these situations as they develop

Sterling sellers would be wise to keep an eye on the current political situation with Theresa May. It is rumored there are as many as forty MPs willing to put forward a vote of no confidence. If there are forty-eight members and the vote is put forward, May will lose her position. Political uncertainty historically weakens the currency in question and I would expect GBP/EUR to drop below 1.10.

If an exit bill is agreed there is the potential for Sterling strength as this will pave way for trade negotiations to begin. €20bn is currently on the table , but it is rumored May will up this to €38bn.

Potential Euro weakness could be caused by Merkel’s failure to form a government in Germany, there is the possibility of a new election which will no doubt cause the euro to lose value. Catalonian independence should also be kept a close eye on.

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.

 

Will GBPEUR keep on rising?

The pound has finally bounced back against the Euro as weakness and uncertainty in the German political situation opens the door to a more unsettled Euro. The prospect of a second election or Angela Merkel stepping down as Chancellor has seen the Euro undo many of its gains over the last few weeks. What lies ahead for the German Chancellor and how could this influence the Euro?

I expect that there will either be fresh German elections or that Merkel will be forced to step down in order to allow a fresh coalition. It appears that the outlook for the GBPEUR is now much better for clients looking to buy Euros with pounds, we have seen the rate rise above 1.13 this morning.

News that the UK is agreeing a Brexit bill of up to £40bn is also helping the pound which is now benefiting from some of the uncertainty in Germany. With the Spanish Catalonian election next month and then the Italian election next year the outlook for buying Euros has suddenly improved. If you have a transfer buying Euros then making some plans around this potential rise is a smart move since Euro buyers have not had a huge amount to cheer in recent weeks!

We are close to the best time in 3 months to buy Euros with pounds and the rate could rise even further depending on the way the market is going. Overall impressions of the rates are that of course sterling could come under renewed pressure owing to Brexit but for now the tide has turned. Euro buyers should not be too greedy but should be carefully making plans around this improvement.

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.

 

Major volatility expected for GBPEUR exchange rates

With the spotlight beaming down on UK Prime Minister Theresa May, the pound remains under severe pressure against the euro providing euros sellers with a fantastic opportunity.

Reports were leaked at the weekend that 40 Conservative MPs plan to persuade another 8 Conservative MPs to sign a vote of no confidence in the Prime Minister. This is a key reason to why the pound started the week so poorly against all of the major currencies.

Head Eu negotiators Michel Barnier is also mounting the pressure as he gave the UK a 2 week deadline for progression, this announcement was released last Friday therefore we have 8 days until crunch time. Mr Barnier wants to be able to report clear progression at the EU commission meeting in December.

With Brexit negotiations now in full swing and clearing heating up, I expect major volatility for GBPEUR exchange rates for the remainder of the year. If no progression is made I believe Theresa May’s time at number 10 will be limited and therefore GBPEUR exchange rates could fall to the lows that we saw 8 months ago (1.07).

However if progression is made pressure will be released, and GBPEUR could hit a 6 month high (1.15). If you are converting GBPEUR in the upcoming weeks devising a strategy now is wise!

For further information in regards to GBPEUR currency transfers 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 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! **

Will GBPEUR slide below 1.10?

The pound to Euro exchange rate has been bouncing between 1.11 and 1.14 in the last month but lately seems to be on a gentle slide owing to uncertainty over Brexit and the UK government, plus the strengthening Euro. The Eurozone economy was shown to be growing at a very fast pace at 0.6% which has outpaced the US for the year on year at 2.5% versus the US’ 2.3%. Once again it is a case of the Euro rising and the pound weakening, will this continue?

On balance I would expect it probably will, trying to predict the longer term outcome’s are always tricky but we do need to bear in mind the great legal and political challenges ahead for the UK. In my mind these far outweigh what the Eurozone has to go through so ultimately I feel that this see the Euro outperforming the pound.

If you have a transfer buying or selling the pound at present, next week or even in the New Year now is a good time to be making plans. With the all-important UK and Eurozone interest rate decisions out of the way we are now focused on path ahead which will encounter the next developments with Brexit plus the Spanish independence election for Catalonia. Plus 2018 sees the Italian election which will be very closely monitored for signs of anti-EU feelings…

I suspect rates will be trading at fairly similar levels between 1.10 and 1.15 between now and early next year, however any shocks could easily see sterling much lower back below 1.10 again. I would not be ruling this move out and for any clients looking to buy Euros I would be cautiously monitoring the situation for any spikes. If you need to make a transfer and wish to be alerted to any spikes please speak to me Jonathan Watson by emailing jmw@currencies.co.uk with an outline of your position.

Thank you for reading this post and I hope to discuss your situation and the best strategy very soon.

Be wary of waiting for further gains for the pound (Daniel Johnson)

Interest Rate hike by the BOE a knee jerk reaction

The recent gains for the pound last week were based on the predicted rate hike by the Bank of England (BOE) and tapering form the European Central Bank (ECB) along with the uncertainty surrounding the situation in Catalonia. The UK economy is shocking state considering where we could be had we not voted to leave the EU. Inflation is now at 3% and average wage growth is at 2.1%, In order to have a stable economy these figures need to be moving at a similar pace, they are not. Unemployment is being lauded as the best levels since the 70’s, but the data has only recently incorporated zero hour contracts. The rate hike from the BOE was a knee jerk reaction to the inflation problem and it is a coin flip as to whether it will have any impact.

There was very little justification for the hike and I am of the opinion we could be in for further losses for the pound against the Euro. Buoyancy levels have been between 1.08-1.15 since June,the last time we hit 1.15 was June. The highest we have seen the market in several months is 1.1450 and if you have a Euro requirement short to medium term it could be wise to move if the market moves close to 1.14 again.

In order for a significant rise Sterling value we need a stable government and clarity over Brexit, both of which I can’t see happening for the foreseeable future.

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.

 

Sterling rebounds after last week’s sell-off, will GBP/EUR reach 1.14 again soon? (Joseph Wright)

The Pound to Euro exchange rate has been trading in quite a volatile fashion over the past week, after the pair breached 1.14 before trading in the 1.11’s in the immediate aftermath of the Bank of England’s rate hike yesterday.

The rate hike from the Bank of England (BoE) was the first in the last decade and widely expected to happen within financial markets even if not everyone agreed with the decision.

Personally I think the sell-off was simply profit taking from the likes of day traders, although I am surprised to see the Pound recover so quickly back to the levels seen just before the BoE decision.

Moving forward I think we may see a more resilient Pound and despite some negative economic data out of this UK recently, we’re still seeing the Pound slowly recover from the lows seen just a couple of months ago when I think the Pound was oversold.

Later today there will be the release of UK GDP data for the past 3 months, and this data will be released by a leading UK-based think tank. Data releases such as this one have the potential to move the markets, so if you would like to be kept updated regarding price movements as soon as possible, do feel free to register your interest with me.

For now at least it appears that the Catalonian independence issues have subsided somewhat, but should this matter surface once again I wouldn’t rule out a downward move for the Euro which would benefit the GBP/EUR rate.

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.

Rate hike expectations pushing up the Pound, will this trend continue? (Joseph Wright)

The Pound has continued to climb against the Euro in the lead up to this Thursday’s interest rate decision by the Bank of England.

It will be at 12pm tomorrow when the decision will be announced and markets are expecting to see the base rate hiked by 25 basis points to 0.5%. This will be the first hike in 10 years if it goes ahead and likely to make financial headlines, although should it go ahead like many expect I think there will be quite a muted response by markets as the hike is already being priced in to the Pound’s value.

I think the risk lies in the not being a rate hike, as the Pound would be likely to fall quite dramatically due to there being many disappointed investors as well as speculators quick to try and take advantage of the fall.

For those of our readers planning an upcoming currency exchange involving the Pound, and hoping the expected rate hike will make the Pound gain more value I would be weary as due to the expectations of it happening I personally think it’s unlikely there will be much market reaction.

If you wish to be updated should there be any major movement do feel free to register your interest with me, as working on a trading floor allows us to react instantly to market movements.

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.

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.

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.

Be wary of recent gains for the pound over the Euro, they may not continue. (Daniel Johnson)

Potential Rate hike based on misinterpretation of data

Despite Sterling moving above 1.14 this morning against the Euro be wary of thinking a resurgence on the cards. The main catalyst for Sterling strength is the market factoring in a potential interest rate  rate hike. Mark Carney, the head of the Bank of England recently stated there may be the need for a rate hike in the coming months which drove investor confidence and caused the pound to strengthen. This is a technique call jawboning, a technique Carney has used in the past during his role at the Bank of Canada. Essentially rather than making any changes to monetary policy you talk up the value of the currency. This is one of the rare occasions the technique worked. Keep in mind those who actually vote on a change in rates, the monetary policy committee (MPC) voted 7-2 in favour of keeping rates on hold.

The justification behind the potential rate hike is high inflation and low unemployment. High inflation is only healthy for an economy if average wage growth keeps in pace with inflation, at present it isn’t, it actually fell to 2.1%. Unemployment figures are at the best levels since the 70s, but a large contribution to this is down to zero hour contracts. My opinion is the reasoning behind a hike is false, but investors are biting with a 50% chance of a hike in November and a hike factored in by February next year.

The uncertainty surrounding Brexit is still a major concern and if negotiations are not going well, the pound could fall considerable. May’s opportunity to provide clarity on Friday was not taken and at one point she stated “no deal is better than a bad deal.”

If you have a currency requirement I would be happy to assist. You need to have an experienced broker on board in order to take advantage of rates when a brief spike occurs, especially in the current climate. If you have a currency provider already in place I am prepared to perform a comparison against them. It will take minutes and could potentially save you hundreds or even thousands of pounds. I can be contacted at  dcj@currencies.co.uk.

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.

GBPEUR 3 month forecast

Yesterday President of the European Central Bank Mario Draghi hinted that future key monetary policy decisions will be made in October. The President was eluding to the quantitative easing program that has run for the last few years in a bid to stimulate and kick start the economy. With many economists stating growth has improved throughout Europe their is hype that the quantitative easing program will be cut in the upcoming months.

It is important to note if the quantitative easing program is cut (tapered) I expect major euro strength. 

Brexit negotiations are continuing to weigh down on the pound as UK and EU negotiations cannot come to an agreement about EU citizens rights. UK Prime Minister Theresa May has made it clear that the UK and European Court of Justice will part ways after Brexit which in my opinion means EU citizens wont be protected and this is another stumbling block negotiations needs to overcome.

Over the next 3 months I expect exchange rates to fluctuate between 1.05-1.10, as I wouldn’t be surprised to see further sterling weakness. However with European exports becoming to expensive, spikes in the market could occur throughout the month when Draghi tries to talk down the currency.

For further information in regards to currency 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 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! **

 

UK Services data released this morning likely to drive GBP/EUR today, what other data should be watched closely? (Joseph Wright)

This morning the most important sector for the UK economy will be under the spotlight as Services PMI data is scheduled for release.

The figure will be released at 9.30am and it will cover business sentiment in the sector, which is particularly important for the UK economy as the services sector covers around 80% of the UK economy. Whether this figure impresses or not is likely to move the Pound to Euro exchange rate due to its importance, and those following the GBP to EUR exchange rate should kind in mind that the manufacturing and construction figures released over the past couple of days have been mixed which has resulted in a mixed performance for the Pound.

The services sector figure has higher potential to result in price movement and the figure expected for releases is 53.5 so this is the figure to look out for.

We’re able to provide our clients with guidance regarding the news releases and expected figures that could potentially impact their currency transaction requirement. If you would like to be kep updated regarding the markets do feel free to register your interest with me and I’ll be happy to discuss it with you.

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 GBPEUR rise hit parity?

I do not believe the pound can fall below parity but we might learn the coming weeks and months about just how likely it is. With the trends that seem in motion at present the outlook for the pound remains very bleak and the outlook for the Euro appears very positive. The Euro is beating the pound on many fronts most notably in the political stakes but also the economic ones too. In fact if you are looking to see the pound rise against the Euro I think you are really struggling to gauge just where any good news will come from!

Most likely for the pound could of course be the prospect of some good news for Brexit, but the Euro might weaken too. The thing with Brexit is that the likelihood of any good news seems quite far off in the distance. In fact there might not be any good news for many years to give investors reasons to start backing the pound. The problem is too that with the Brexit, all the whilst we await further news on what is will actually mean, the UK economy suffers, so does the pound and so does life for Euro buyers with pounds.

Consumers in the UK initially reacting on a wave of optimism to Brexit are now gently beginning to come to terms with the complexities. The seemingly free money racked up on loans for cars, shopping and entertaining themselves won’t just be available forever. Consumer spending has slowed as has business confidence. This is all weighing on the pound and with the German election in September seeming to point towards a Merkel victory, further Euro strength could be up ahead. Parity might not be precisely on the cards but lower rates than today seem likely!

If you have a transfer buying or selling the pound and Euro then making plans around the latest sentiments is key to avoiding unforeseen extra costs. If you wish to get the latest news and information on the market and your situation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk. Thank you for getting in touch and I look forward to hearing from you.