Sterling vs Euro at 2 month high into December

30th November 2010
Good morning. Sterling vs Euro rates hit a fresh 2 month high yesterday, as fears grow that other EU nations may also require help, as Ireland did. This speculation has weakened the Euro, creating some great opportunities for those that need Euros. Rates at 08:30am are as follows:

• GBP/EUR 1.1870
• GBP/USD 1.5561
• GBP/AUD 1.6169
• GBP/NZD 2.0886
• GBP/CAD 1.5859
• GBP/CHF 1.5495
• GBP/ZAR 11.055
• GBP/JPY 130.51
• GBP/NOK 9.601
• GBP/HUF 335.95
• EUR/USD 1.3089

EU fears weaken Euro, but the pound is still weak

Whilst negative sentiment towards the Euro has weakened the single currency pushing GBP/EUR rates to a 2 month high, against the US Dollar the pound fell to a 2 month low. This illustrates the fact that the pound is still weak, and it's only Euro weakness that's causing the rise in rates.

Ongoing speculation about whether more euro zone nations including Portugal and Spain will require bailouts will continue to sting the euro which may boost the pound versus the single currency.

Signs the UK economic recovery will be subdued are also expected to limit any big upside in sterling for the moment however. Many of you who need to buy Euros may be hoping that rates will continue to rise. While the problems in the Eurozone remain, this could be the case. It's important to note however that there is poor UK data, and given the EU is our largest trading partner, problems could migrate to the UK.

If you need to buy Euros...

At some point rates will fall back away, probably when markets are calmer about the EU countries. If you need to buy Euros then consider fixing the rate at a 2 month high using a Forward contract.

Just over a month ago rates were at €1.11, and we've seen a remarkable 7 point increase purely to do with the debt problems in Ireland. €150k is now £8000 cheaper than when rates were lower, and many clients who don't want to risk rates falling are taking advantage now. It wouldn't take much for rates to retract to the €1.11 low of a month ago.

If however you wish to take the gamble that rates will continue to rise, then you should consider placing a Stop Loss order. This is where you place an order to buy should rates fall below a pre-agreed level. In this way you can continue to aim for a higher rate, but have a worst case scenario should exchange rates fall.

To discuss our commercial rates and the types of contract we offer, contact us today for a free consultation. Our rates are up to 5% better than the banks can offer, and so the savings can be considerable. No commission, expert market knowledge, and commercial exchange rates. Get in touch now.

What next for GBP/EUR rates in November ?

What next for GBP/EUR rates in November ?

The market last week has been characterised by range-bound trading, thin liquidity and a loss of risk appetite from investors nervous of a stuttering UK recovery. The exchange rate last week opened 1.167 to a close of 1.18……

Early in the week there was selling pressure on the Euro as investors wanted to see if Ireland accepted the rescue package and what affect this would have on the wider Euro economy and particularly any anticipated contagion to the “sick men of Europe”.

This resulted in a strong Sterling outlook resulting in 2 month high on Weds. However, gains were relatively soft as general consensus was that a Euro safety net lending capacity had been established for the weakest Euro economies and that lending would be accompanied by Euro currency buying by their central banks.

At home confidence in the pound was generally weak as eyes turned to Monetary Policy Committee’s (MPC) stance on Quantitative Easing (QE), Thursday’s inflation report hearing by the Treasury Support Committee (TSC) and the Q3 GDP report on Wednesday.

There were also tensions in Korea, which generally subdued global markets and the US holiday Thursday saw a quiet week with uncertainty the overriding feature. Below we list the main data that could affect rates this week, in the wake of the weekends developments regards Irelands bailout.

“Mutability is our tragedy but also our hope”

Weekly Data:
Below we list the main data releases for the week that may impact on Sterling exchange rates. Over the last week it was developments in the Eurozone that dominated the markets and moved currency rates, so to make sure you are kept up to date with what’s happening in the market contact us today for a free consultation.

Knowing which currency you need to buy or sell, including the volumes and timescales, we can then let you know the options available to ensure your currency doesn’t cost more than necessary.

Over the course of the last month, buying €150,000.00 at the high compared to the low would have saved you nearly £8000.00 – clearly illustrating the importance of arming yourself with the necessary knowledge to help you make the decision on which type of contract to use, and when to fix your rate.

Take advantage of the wealth of experience we have here at FCG; register a free trading facility now and take the first step to making the most of your currency.

Monday
From the UK today we will see House price data and Mortgage approvals, giving an idea how this sector is performing. At midnight Consumer Confidence figures are released for the UK. From the EU there are also various confidence measures released. These are forecast to be low anyway, but if they are different than forecast expect volatility in GBP/EUR rates.

Tuesday
Nationwide Housing Prices are released which is the only UK data of note today. From the EU we have Unemployment figures from the EU and Germany. Confidence data from the US in addition to Canadian GDP is the main data from the Americas.

Wednesday
We start the day with Gross Domestic Product (GDP) data from Australia. We expect a 0.5% quarterly gain, but if it’s more than this GBP/AUD rates may fall. From the UK, inflation data will be closely watched as an indicator of what the Bank of England may do at their next interest rate meeting. WE also have inflation data for the EU so expect GBP/EUR volatility today. From the US, the main release is Construction and manufacturing data.

Thursday
A very important day today with some key releases that will affect rates. From the EU, we have GDP figures and an interest rate decision. Given the turmoil in the Eurozone at the moment these will be closely watched by the markets. From the US there are various jobless measures.

Friday
We end the week with some Housing data for the UK. From Europe today we have German Retail Sales and some more inflation figures from the EU. From the US we have Non-farm payrolls that measures how many people are employed outside the agricultural sector (as this is seasonal). These are notoriously difficult to forecast, and so the numbers are often very different than expected and so can cause GBP/USD rates to change dramatically.


If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Pound remains at 2 month high vs Euro

26th November 2010
Good morning. Sterling fell slightly against the euro yesterday, but then recovered again as the single currency remained under pressure due to concerns Ireland's debt crisis will spread. The pound was fairly steady, but fell to a 1 month low against the US Dollar while US markets were closed for Thanksgiving. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1841
• GBP/USD 1.5735
• GBP/AUD 1.6190
• GBP/NZD 2.0760
• GBP/CAD 1.5913
• GBP/CHF 1.5752
• GBP/ZAR 11.126
• GBP/JPY 131.84
• GBP/NOK 9.6225
• GBP/HUF 329.32
• EUR/USD 1.3284

Bank of England show disagreement

A member of the Bank of England's Monetary Policy Committee (MPC) has said he was concerned about support given by the MPC for the government's plans to cut the budget deficit.

Adam Posen said that he was worried about the committee's impartiality. "There was a difference of opinion at the MPC at the May meeting over a particular paragraph in the report that was talking about the need for a particular speed to deal with the fiscal policy," he said.

This shows there is a lack of agreement and this will not give the markets the sense of stability that's needed for a strong pound. If the uncertainty continues expect the pound to fall.

Germany in EU bail-out vow

Germany's Chancellor Angela Merkel has vowed to implement a permanent bail-out facility amid speculation over a break up of the 16-nation eurozone. A joint statement with French President Nicolas Sarkozy said the two would propose replacing the existing fund that expires in 2013.

Meanwhile the head of Germany's central bank said the existing fund could be increased if needed. This news may calm the markets as they have vowed to implement a permanent bail-out facility amid speculation over a break up of the 16-nation eurozone.

The markets haven't really changed their stance on the weak Euro however, and rates for GBP/EUR have increased by 1.3% this week alone, and the current rates is still around a 2 month high, presenting good buying opportunities for those needing Euros.

On Monday, we'll have a detailed look at the recent movements of the pound vs the Euro and US Dollar, in addition to a breakdown of next weeks data releases that may affect rates.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Weak Euro keep Pound / Euro rates high

25th November 2010
Good morning. Yesterday there was a sigh of relief as Ireland announced austerity measures that appeased the markets. GBP/EUR rates fell through most of the day. In fact the bail-out has done nothing to calm the markets. If anything, it has made the situation in Europe worse.

It has highlighted the problems of having to shore up bad debts and the risk of other countries needing a huge helping hand. As a result, later in the afternoon the Euro weakened again and rates pushed back through the €1.18 barrier. At 08:30am this morning rates stand as follows:

• GBP/EUR 1.1824
• GBP/USD 1.5788
• GBP/AUD 1.6054
• GBP/NZD 2.0688
• GBP/CAD 1.5914
• GBP/CHF 1.5752
• GBP/ZAR 11.095
• GBP/NOK 9.6141
• GBP/JPY 131.69
• EUR/USD 1.3348

Irish austerity measures

Dublin on Wednesday unveiled a strict, four-year austerity plan after securing a debt bailout from the EU and the IMF this week but this did little to allay concerns that other periphery euro zone countries may also be in trouble. With concerns growing about the fiscal health of Portugal and Spain, analysts said the euro would remain under broad selling pressure and that sterling would rise as a result.

Problems for other EU countries?

The PIIGS - Portugal, Ireland, Italy, Greece and Spain - have been causing concern for months. Nobody has ever experienced a financial crisis where multiple countries are in danger of defaulting on their debt. Fears that Spain and Italy could also need help have increased. Spain is a particular problem because it is a much larger economy that either Ireland or Greece.

If there is indeed a domino effect, then this would cause further problems in the EU and the Euro could weaken further.

So will GBP/EUR rates continue to rise?

This is a difficult one. Of course further problems in the EU could indeed make the Euro cheaper to purchase. The issue is with the pound; Sterling won’t necessarily be seen as a safer currency because we’re not out of the woods yet with our own economic difficulties.

But at least we are a separate currency able to manoeuvre to our own benefit without having to kowtow to the ECB. Due to this we should be viewed as a healthier choice than the euro amongst investors.

Pound to Euro forecast for coming weeks

So just looking at the Euro side, and you could say that until there is more certainty with the EU countries facing problems with debt, the Euro will remain weak. Once focus shifts from the EU back to the wider global economy, Britain's own problems that haven't gone away will likely re-surface. We think therefore that this rise, while it may push slightly higher, is probably going to be short lived.

If you need to buy Euros, a good tool in this climate is a Stop Loss order. This is where you can place a limit with us to buy should rates fall below a pre-agreed level. You can then hope there are more EU problems that push rates higher, but if rates drop - and they will sooner or later - you have a safety net and aren't going to pay more than necessary for your currency.

Contact us today to discuss how we can help with our commercial rates of exchange.

Pound hits 2 month high vs Euro

24th November 2010
Good morning. Yesterday was full of surprises. Firstly the military action in Korea worried the markets and strengthened the US Dollar, pushing GBP/USD rates to a 1 month low. Versus the Euro however, Sterling hit a 2 month high due to the weak Euro on Irish uncertainty. Rates at 08:30am are as follows:

• GBP/EUR 1.1814
• GBP/USD 1.5779
• GBP/AUD 1.6127
• GBP/NZD 2.0760
• GBP/CAD 1.6101
• GBP/CHF 1.5689
• GBP/ZAR 11.190
• GBP/JPY 130.90
• GBP/CHF 1.5689
• GBP/NOK 9.6382
• EUR/USD 1.3355

Korea shocks the markets

North Korea shelling a South Korean island further dented sentiment in a market already worried about debt troubles in the euro zone, with participants seeking the perceived safety of the likes of the dollar. When there is global uncertainty, investors return to the 'safe haven' status of the US Dollar. As a result the USD strengthened and rates are now at a 1 month low for US Dollar buyers.

Sterling is still weak

The pound rose almost 1% against the Euro yesterday. Many think the pound is gaining but in fact Sterling is weak just as the Euro is. Contagion fears are keeping the Euro lower though, and that's why rates have risen. The bailout of Ireland could be delayed due to political uncertainty, and that's why the Euro is weak.

Further weakening Sterling were more negative signs on the state of the UK housing market, as the British Bankers' Association said UK mortgage approvals fell to their lowest in more than 1-1/2 years in October.

Summary

For those looking to buy Euros, rates are at their best for 2 months. This is due to the Irish crisis, and it's important to remember that Sterling is still fundamentally weak. Once the bailout is secured and markets feel better about the Euro, then rates will probably drop back away.

If you want to take advantage of the current levels, even if you may not need your Euros for some time, then contact us to discuss our Forward contracts. This is where you can lock in commercial rates with us today, for currency needed up to 2 years in the future. Only a 10 deposit is payable, and you then know exactly what your currency will cost.

For a client purchasing €150,000 with a Forward contract today, if rates were to fall back to where they were a few months ago, then you would have saved nearly £7000 - clearly illustrating the importance of timing your purchase right.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Euro weakens over political uncertainty in Ireland

23rd November 2010
Good morning. The euro slipped against sterling yesterday, relinquishing early gains after the single currency's initial rally after Ireland secured a debt bailout was overtaken by political uncertainty as Dublin looked headed for an early election. We'll look at these developments in a moment after a snapshot of rates as at 08:30am:

• GBP/EUR 1.1733
• GBP/USD 1.5936
• GBP/AUD 1.6247
• GBP/NZD 2.0756
• GBP/CAD 1.6248
• GBP/CHF 1.5768
• GBP/ZAR 11.217
• GBP/NOK 9.606
• GBP/JPY 133.23
• GBP/HUF 322.22
• EUR/USD 1.3576

Irish debt and political uncertainty

Initially the bailout news strengthened the Euro, pushing GBP/EUR rates into the €1.16's. Later in the day however, it became clear there is severe political uncertainty, and this weakened the Euro again pushing rates back above €1.17. Investors fear that far from stemming the eurozone debt crisis, Ireland's bailout has given it fresh legs with Portugal and Spain the next in the firing line.

"The debt crisis will put pressure on the euro and keep the US dollar stronger, and that will put pressure on equity markets," said Ben Kwong Man Bun at KGI Securities in Hong Kong. This could mean a rise in GBP/EUR rates but a decline in GBP/USD rates.

Ireland is the second European country to need emergency loans from the EU and the IMF after Greece was granted a 110bn euros package over the summer. Officials from the IMF will report later on whether they will release the next tranche of loans to Greece.

The Irish government will publish a four-year budget plan on Wednesday, which will provide some detail of spending cuts and tax rises amounting to 15bn euros, including 6bn euros next year.

There are growing calls for an immediate Irish general election, in particular from opposition parties Fine Gael and Labour, in protest at the government's handling of the economy, and particularly its continued denial of the need to ask for financial assistance before calling for aid at the weekend.

Sterling will also play it's hand

So the Euro may weaken further which would usually push rates up. Economic data in the UK will also play it's part however. A run of good data recently has caused the pound to rise. There are concerns however that the Bank of England will have to continue their Quantitative Easing programme sooner or later, and when they do it could easily push GBP/EUR rates well back to the €1.11's we saw 6 weeks ago.

Any bad economic data releases could also weaken Sterling further, and so rates are precariously balanced at the moment with nobody sure which way the scales will tip.

Today's data that could affect rates

We have already had German GDP figures which came in as expected and so had no real effect. We have inflation data from the EU today in addition to some mortgage approval figures for the UK.

From the US this afternoon we have GDP, Home sales, and the FOMC minutes. To find out how these releases could affect rates for the currency you need to purchase, contact us today and see how much you could save with our commercial exchange rates for any amount from £5000+.

Click below to send us an enquiry now.

Weekly Pound vs Euro forecast

Pound vs Euro

Last week Sterling held ground against the Euro following the news that the Bank of England voted as expected in their policy meeting earlier this month. The positive for the pound being that only one member voted for further Quantitative Easing (QE).

Regular readers will be well aware of the dangers QE poses to the value of GBP, with the original QE session in the UK playing a key role in the devaluing of the Pound against the Euro to its lowest ever levels almost two years ago.

The failure of the Pound to make notable gains last week against the Euro, where the economies in some member states are still grabbing the headlines for all the wrong reasons, suggests that fear of further QE (QE2) is still weighing on the market. Considering this, it is difficult to forecast the Pound making substantial gains in the short-term and we will have to wait until the beginning of next month at the earliest for the next Bank of England meeting for any further clarity on this lingering issue.

As always further details of the data releases that could provide market movement this week can be found below, however, this week market movement may be more dramatically impacted upon by the looming financial crisis in Ireland.

Ireland Debt Crisis

The problem in Ireland has been well documented but in recent months the cost of borrowing for the Irish Government has spiralled out of control and this has fuelled speculation of an EU bailout, with the estimated cost numbering in the billions. This is obviously a huge problem for Ireland itself and has caused many investors to doubt the stability of the Euro. In fact reports have been circulating that a number of key European economies will be evaluating their position within the Single Currency over the next few years.

Taking the key factors into consideration the GBP/EUR cross is very finely balanced at the moment with fundamental economic factors weighing on each currency. In the short-term it would appear that the European Central Bank (ECB) will look to act quickly to remedy the Irish debt problems and depending on whether investors view their ultimate decision to be a forced action to prevent further European crisis or a sign of EU solidarity will likely impact on the direction of the cross.

While the direction of volatility remains difficult to predict, market movement is a given in any week and this week will be no exception.

This weeks data

Monday
There is no data of note

Tuesday
We have no data from the UK today. GDP is out for Germany which is the key release of the day. GDP s a measure of the total value of all goods and services produced by Germany. The GDP is considered as a broad measure of the German economic activity and health. A high reading or a better than expected number has a positive effect on the EUR, while a falling trend is seen as negative

Wednesday
A key day for Sterling and the Dollar; We have UK GDP Figures out in the morning which will determine if there has been further growth in the UK potentially boosting the pound. In the US we have jobless claims and in the evening we will have the FOMC minutes FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth

Thursday
US MARKET HOLIDAY- NO DATA OF NOTE

Friday
A very quiet day for releases the main one is German CPI - CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive for the EUR, while a low reading is negative.

German Retail sales for October are also released later on in the day this measures the performance of the retail sector and again a negative reading will weaken the Euro and a positive will strengthen the single currency.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Bank of England could weaken Sterling today

17th November 2010
Good morning. Sterling fell sharply yesterday as Bank of England Governor Mervyn King signalled more quantitative easing could be possible, erasing gains made after higher than expected UK inflation data. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1778
• GBP/USD 1.5898
• GBP/AUD 1.6308
• GBP/NZD 2.0742
• GBP/CAD 1.6271
• GBP/CHF 1.5828
• GBP/ZAR 11.214
• GBP/JPY 132.54
• GBP/HUF 326.10
• EUR/USD 1.3493

Bank of England data could hurt Sterling

The UK Consumer Prices Index (CPI) inflation rate rose unexpectedly to 3.2% in October, official figures show, on the back of higher fuel prices. Analysts had expected the CPI figure to remain unchanged at 3.1%. The higher figure prompted the BoE governor to say that it is still possible the UK will follow the US in another round of Quantitative Easing. This would weaken the pound against other currencies.

Today we will see the minutes to the recent BoE meeting, and see the differences of view. This is released at 09:30am. If the minutes show a split on the decision not to embark on more stimulus then this will increase the chances of QE in the coming months. More QE will weaken the pound, and so today is a key day in terms of where the pound will go in the coming weeks and months.

Eurozone to help with Ireland's debt situation

Plans are being made for a potential rescue programme to bail out the Irish government, if it asks for help, the EU's finance commissioner says. Olli Rehn told reporters the plan would have an "accent on restructuring its banking sector". His statement came at the end of an emergency meeting of eurozone ministers and financial institutions in Brussels.

Irish debt has weakened the Euro of late, and is part of the reason GBP/EUR rates are still close to €1.18.

Pound vs Euro forecast

Rates are high due to better UK data including the decision not to embark on further QE at the Bank of England. Irish debt has also weakened the Euro helping rates gain over recent weeks. With Ireland due to be bailed out, and today's key data possibly showing that the BoE will indeed continue with QE measures, we think the current levels may be short lived.

If you need to purchase Euros in the coming months, consider a Forward contract to fix rates while levels are close to 2 month highs. Just over a month ago rates were as low as €1.11. Should rates retreat to these levels then a €150k would cost £7000 more than today. Contact us today to discuss the options available and see how much you could save with our commercial rates.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Pound vs EUR, Pounds vs US Dollar, Fundamental Data,

Sterling gains as debt concerns weigh on the Euro; Pound vs Euro Forecast

We have seen a pretty volatile week for the Sterling - Euro exchange rate with the cross starting Monday morning at 1.1551 and reaching a high on Thursday afternoon of 1.1825; which for those buying euros makes a difference of over £2,000 on a €100,000 purchase. Make sure you keep in touch with your account manager at Foremost to ensure you are getting the best exchange rates.

Weaker than expected manufacturing & industrial data from both the UK and Eurozone earlier in the week meant that the rate remained pretty stable but on Wednesday the Bank of Englands monthly inflation report helped the Pound to recover some of the ground it has lost over the last couple of months. When delivering the report, Govenor Mervyn King, said that the outlook for the UK economy remains uncertain and inflation will be higher than expected until at least the end of 2011, giving Sterling bulls some optimism about a possible interest rate hike next year. He also stated that “the government's "substantial" austerity measures and deep cuts should not send the UK into a double-dip recession”.

Thursday & Friday saw further Sterling gains against the Euro as sovereign debt concerns in the Eurozone increased, and figures showed growth rates have slowed in some of Europe’s largest economies.

This week could give some real insight into how the GBP/EUR pair may fair over the coming months with some key data releases from both the UK & EU including inflation figures, unemployment numbers and house price data.

The big one however will be the Bank of England minutes from their November meeting. If the voting shows that only one of the MPC members is still voting for more Quantitative Easing then it could allay fears over the central bank announcing more austerity measures (which would weaken Sterling) and help to force the rate up, but more than one vote for QE could send it spiraling down.

There will almost certainly be more news about the state of affairs in Ireland, Greece and other poorer fairing Eurozone economies too, so without sitting on the fence it really could still go either way.

Sterling Forecast Gains pace after disappointing G20 summit; GBP/USD Outlook

Sterling rallied against the Dollar toward the end of last week after losses earlier in the week. After last week’s announcement that the Federal Reserve are engaging in a stimulus $600M quantitative easing the Pound benefited after the UK announced that it wasn’t going to follow suit. GBP/USD Exchange Rates reached almost a 12 month high at an Interbank level of almost 1.625.

In what was a relatively quiet week for the Greenback with a US market holiday, the main focus of the week for the US was the G20 summit in Seoul. The Financial leaders of the world met with the purpose of discussing and agreeing on how to put the world economy on a sounder footing after the recent financial crisis.

With the world’s media watching, US President Barack Obama lead the meetings as the group hoped to use the two-day summit to recapture unity forged in the depths of the crisis two years ago in order to sooth exchange rate tensions generated by imbalances between cash-rich exporting nations and debt-burdened importers.

However, rather than being a resounding success, the meeting proved to be rather a non-event with more squabbling over closing statements than genuine forged agreements. Even worse for the US, they were effectively accused of double standards by the Chinese regarding their recent announcement for Quantitative easing. The Chinese have been under pressure by many nations including the US for keeping the value of their currency low and therefore giving their export market a huge advantage over the rest of the world. Former Fed Chairman Alan Greenspan aggravated the situation, saying the U.S. central bank's policy was deliberately weakening the dollar.

U.S. Treasury Secretary Timothy Geithner immediately replied back "The U.S. will never do that," .... "We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy." Yu Jianhua, an official with China's Ministry of Commerce, said Beijing had no intention to confront the United States over currencies or trade issues. But, Yu added, Washington "should not politicise the Yuan issue, should not blame others for its domestic problems and should not force others to take medicine for its own disease."

With the Dollar on the back foot and in its most vulnerable position for some time, those with a Dollar requirement could see a window of opportunity over the forthcoming days and should remain in close contact with their FCG Account Manager. It is uncertain whether the potential Sterling gains (if any) are sustainable as despite the recent vulnerability of the USD it is still widely acknowledged as a safe haven currency. The use of Stops and Limits could prove invaluable during this period as it could protect you should the Pound slide whilst at the same time maximising your currency position by targeting specific rates of exchange.


Better Economic Data helped Sterling last week, what’s on the agenda this week?

Monday
There is no data of note for the UK Europe releases its Trade Balance figures at 10:00am. This is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. Markets expect a large deficit of €-1.4bn. If figures are better however, expect GBP/EUR rate to fall. From the US we have Retail Sales showing how confident consumers are about the economic recovery.

Tuesday
RBA Minutes as discussed in our Aussie Dollar report. From the UK we have inflation data, which will be watched with interest following the bullish forecast from the BoE last week. There are also inflation measures for the US and EU today, so it could be a volatile day for exchange rates.

Wednesday
A key day for Sterling; in addition to various measures of unemployment, we have the minutes to the recent Bank of England meeting. It will show who wanted more Quantitative easing, and will show if there was a consensus on the decision to hold off more stimulus. If the report shows indecision it could weaken the pound and push rates lower.

Thursday
Retail Sales is the only data of note from the UK today. From the US there are some unemployment figures at 13:30pm.

Friday
A very quiet day for data releases. Some inflation data from Germany is the only release of note.
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Ireland debt weakens Euro; GBP/EUR €1.18.

12th November 2010
Good morning. Sterling rose yet again vs the Euro yesterday, after problems regarding Ireland's debt weakened the Euro. Today we have some further key data from Europe, so we could see further changes. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1770
• GBP/USD 1.6059
• GBP/AUD 1.6250
• GBP/NZD 2.0724
• GBP/CAD 1.6260
• GBP/CHF 1.5644
• GBP/ZAR 11.214
• GBP/JPY 131.36
• GBP/NOK 9.580
• GBP/HUF 325.25
• EUR/USD 1.3643

Ireland debt weakens Euro

Sterling benefited from growing negative sentiment towards the euro, with investors particularly worried that Ireland and Portugal might need a Greek-style bailout.

The government's deficit surged during the recession after it was forced to bail out the country's banking system. The recent rise in the interest rate Irish government bonds pay out, which hit record highs this week, suggest investors doubt whether these cuts will be enough to put the Irish economy, which suffered one the deepest recessions in the eurozone, back on track.

This makes it increasingly likely that the Irish Republic will have to be bailed out by the EU and the International Monetary Fund. As a result, the Euro weakened and GBP/EUR rates rose again, briefly breaking through €1.18 before retreating. It's fallen back as this morning consumer confidence for the UK came in lower than expected.

G20 agrees to address currencies

Leaders of the G20 group of major economies have agreed to avoid "competitive devaluation" of currencies after a second day of difficult talks in the G20. You can read a detailed report about this on the BBC site here. The news may avert a currency war where economies try to devalue their currencies to boost exports.

Today's Data

We have GDP data for the Eurozone today, in addition to Industrial Production figures. The GDP figures are important, as it will show if the economy is growing as forecast. We expect the figure to show a quarterly rise of 0.5%, and a year on year rise of 1.9%.

If the figures released at 10am are higher, then expect GBP/EUR rates to fall. If figures are lower however, then we may see further gains. We've already seen German GDP this morning that was roughly as expected.

Have a great weekend.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Pound rises after BoE Inflation report

11th November 2010
Good morning. Sterling rose again against the euro yesterday, extending gains from the previous day after the Bank of England's inflation report made a move towards quantitative easing in the near term unlikely. Rates have recovered well in recent weeks, and at 08:30am this morning things stand as follows:

• GBP/EUR 1.1726
• GBP/USD 1.6133
• GBP/AUD 1.6085
• GBP/NZD 2.0542
• GBP/CAD 1.6131
• GBP/CHF 1.5636
• GBP/ZAR 11.062
• GBP/JPY 132.76
• GBP/NOK 9.4729
• GBP/HUF 321.01
• EUR/USD 1.3754

Bank of England Inflation Report

Yesterday we had the Bank of England Inflation report. They said that inflation is likely to fall back to it's 2% target, and this means there is much less chance of Quantitative Easing. As a result Sterling rose throughout the day against most other currencies.

The report itself though wasn't all positive. Governor Mervyn King said the recovery was likely to continue, but its strength depended heavily on developments in the world economy. Adding to the uncertainty are government cuts which could trigger a slowdown in construction, Mr King said, which has been a key driver in recent faster-than-expected economic growth.

Commenting on the report, the Institute of Directors agreed the economic outlook was currently almost impossible to read. "Uncertainty is written all over this report, and rightly so," said chief economist Graeme Leach. "There are so many competing forces towards sustained recovery or recession, the economic models are overwhelmed."

Summary

For the moment, there looks like no further Quantitative Easing for the remainder of this year. This has strengthened Sterling and rates are the best for some time.

It's to do with the run of better data we have had of late;House prices rose, manufacturing output increased and the economy grew by 0.8%; double analyst’s forecasts. In addition, the Bank of England (BoE) decided to hold off another round of Quantitative Easing and have been quite bullish with their latest inflation report. The resulting strength means the best exchange rates to buy Euros in nearly 2 months, and the best US Dollar rate for 9 months.

Any bad news for the UK will tip the scales the other way and it wouldn't take much to reverse the recent upward trend.

Today's Data

US Markets are closed for Veterans Day and the only release of note is a report from the European Central bank. If this is positive, expect GBP/EUR to fall. If it's negative, we could see some further gains.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

BoE Inflation report may affect Sterling

10th November 2010
Good morning. Yesterday we hit 6 week highs vs the Euro, and 9 month highs vs the US Dollar. As we predicted in yesterdays report, the gains were short lived and Sterling fell back ahead of today's Bank of England report. Rates this morning at 08:30am are as follows:

• GBP/EUR 1.1578
• GBP/USD 1.5994
• GBP/AUD 1.5896
• GBP/NZD 2.0464
• GBP/CAD 1.6036
• GBP/CHF 1.5521
• GBP/HUF 316.10
• GBP/ZAR 10.942
• GBP/JPY 130.55
• EUR/USD 1.3723

Bank of England Inflation Report

Better UK data has been supporting sterling of late, which is the reason rates have risen over the last few weeks. Today though we have the Bank of England inflation report which could change things.

The quarterly report publishes a report of the detailed economic analysis and inflation projections on which the Bank's Monetary Policy Committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the following two years. It can give clues as to Interest rate movements and the chance of further Quantitative Easing.

There is a risk that the Bank of England Governor, Mervyn King, could adopt a dovish bias today which would take the wind out of sterling's sails. King's news conference just after the report should give some clue to how seriously policymakers considered following the Fed's lead and expanding the BoE's quantitative easing programme.

So, if the BoE are dovish and try to talk Sterling down, then expect the pound to fall from it's recent highs.

Today's other data

Other than the BoE Inflation report detailed above, today is US Focused. We have releases outlining Import Prices and Jobless Claims. The USD is very weak at the moment creating the best buying levels for 9 months. If the above data is good, then expect a reverse of this trend and rates to fall back below $1.60.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Best exchange rates for US Dollar & Euro

9th November 2010
Good morning. Sterling rose to a 5 week high against the Euro yesterday worries about euro zone debt dented the single currency. Sterling lost some ground against the dollar which was lifted on short covering. We have lots of UK data today that could change things, which we'll cover below in a moment. First, rates at 08:30am this morning are as follows:

• GBP/EUR 1.1630
• GBP/USD 1.6094
• GBP/AUD 1.5950
• GBP/NZD 2.0538
• GBP/CAD 1.6201
• GBP/CHF 1.5511
• GBP/ZAR 11.035
• GBP/JPY 130.04
• GBP/HUF 320.03
• GBP/NOK 9.4094
• EUR/USD 1.3838

Sterling vs Euro at 5 week high

Worries about Irish debt have weakened the Euro making it cheaper to purchase. Coupled with the better UK data of late, and the result is the best exchange rates to buy Euros in 5 weeks.

Markets now look ahead to Wednesday's inflation report from the Bank of England. It will include the BoE's latest growth and inflation forecasts. A news conference with Governor Mervyn King will be watched for clues as to how seriously the monetary policy committee considered more quantitative easing last week, following the U.S. Federal Reserve's decision to inject $600 billion in extra stimulus into the U.S. economy.

Given that the BoE want to weaken the pound to boost exports, as our Dealing director discussed with an MPC member recently on CNBC, then it could be this run of strength for the pound may be short lived.

Rates have risen 5 points in just a few weeks, and so if you need to buy Euros, consider either a Forward contract to lock in rates now, or alternatively consider a Stop Loss order. this is where you can place an order to buy should rates fall below a pre-agreed level. in this way, you can still aim for a higher rate while having a safety net should rates drop.

We have lots of data today that could bring an end to the run of strength in the pound. See below for more details.

Pound vs US Dollar

Last week we hit a 9 month high vs the US Dollar, with rates climbing above $1.60. Better non-farm payrolls data on Friday however strengthened the dollar and pegged rates back slightly. Again given the host of data we have today and tomorrow, Sterling movements may be the main driver in GBP/USD rates in the coming days.

Today's Data

We have a busy day today. For the UK, we have GDP estimate, House Price Data, Industrial & Manufacturing Production and Trade Balance data. With so much being released, we expect a volatile day for the pound. If the releases come in above forecast, expect the pound to gain. If figures are worse than expected however, expect big falls for the pound.

Below we list the UK data that is released at 09:30am, and the forecast figure. Numbers below these forecast will probably result in rates falling. If rates come in above however, we could see rates gain. The GDP estimate will also be released today.

• 09:30 UK Industrial Production (MoM) (Sep) 0.4%
• 09:30 UK Industrial Production (YoY) (Sep) 3.6%
• 09:30 UK Manufacturing Production (MoM) (Sep) 0.2%
• 09:30 UK Manufacturing Production (YoY) (Sep) 4.9%
• 09:30 UK Total Trade Balance (Sep) -£4.500

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Weekly Currency Report, and fundamental data

Good morning. As usual for a Monday, today we'll review where rates moved last week vs the Euro, US Dollar & Canadian Dollar, and the outlook for Economic Data that may affect rates for the coming week.

Pound vs Euro

This past week has seen an abundance of data releases that affected exchange rates including; the positive manufacturing PMI results, which was higher than expected, but more crucially, the BoE and ECB interest rate decisions.

The fear was Mervyn King may sheepishly follow in Ben Bernanke’s footsteps with regards to QE and introduce the dreaded austerity measure into the UK, leaving Jean-Claude Trichet and the ECB smiling with their strengthened euro. However, whilst the BoE, indeed, decided to hold interest rates at its current level, as did Monsieur Trichet, they have put on hold QE… for now at least.

These more promising results and decisions, acted as the icing on the cake for our better than expected GDP Q3 figures, pushing the pound 4 points higher than its level just weeks before, creating the best currency rates for a week. So if selling euro, it may be worth taking advantage of the current level, as we could see the pound continue to gain strength.

After ten days of promising support for the pound, the week ahead has fewer prospects, other than manufacturing production, which forecasts suggest should remain at 0.3%. It must be noted, however, movement either way can tip the scales, and rates could fluctuate like a bungee.

Important figures to pay attention to if buying the euro are the GDP Q3 figures for Germany and the Eurozone, which previous quarters showed better than expected percentages. If the trend is anything to follow, we could see the euro regain it’s recently lost potency over the pound and the rates could correct themselves.

Pound vs US Dollar

With last week’s announcement by Fed chief Ben Bernanke that the US central bank would indeed pursue a second programme of quantitative easing, Sterling made gains against the Dollar. This was aided by the fact that the BoE declined to embark upon fiscal stimulus of its own until at least the New Year.

The US currency is faring rather better now that the so called ‘currency war’ has abated allowing the Dollar to strengthen slightly on the back of a more competitive global trade market. With China’s currency strengthening, the US is once again becoming a popular place to trade with and analysts believe that this can only a positive thing for the Greenback.

With little in the way of market moving data coming in the next week, it will be last week’s QE and interest rate decisions that are still the major players in the markets.

The fact that both central banks remained cautious and left rates as they were caused little fluctuation in the pairing but the $600bn which the US plans to slowly leak into its economy will make waves. Many investors are worried about this negative news and there is a fear that if the amount is misjudged the US could experience hyperinflation.

With little information coming from across the pond and Veteran’s Day keeping the markets closed, there should be limited volatility.

The quietness of the markets is emphasised by the fact that the most important set of data released in the UK will be September’s trade balance figures. The pound could strengthen slightly if the figures are better than forecast but they care still predicted to be well into the negative.

Pound vs Canadian Dollar

The Canadian Unit is closely aligned with Canadian commodity trade and as such is affected by the buying and selling power of its major exports such as its oil stores. Recently, Canada’s dollar traded equal with its U.S. counterpart for the first time in three weeks after reports showing that each of the nations’ economies added jobs last month bolstered global growth optimism.

The loonie, as the currency is often called because of the aquatic bird on the one-dollar coin, rose for a seventh day and gained versus the euro and yen. The Canadian dollar is headed for a 1.8 percent gain this week for the fifth-best performance among the 16 most-traded currencies. Fellow commodity exporters Australia and New Zealand are the two top gainers, after crude oil rose to the highest in more than two years.

This week’s data

Below we list the main economic releases for the coming week that will likely impact on any foreign money exchange you may need to do. Tuesday is the most important day for Sterling as we have a raft of economic data released. Recent weeks have shown that any data good or bad can very quickly push exchange rates up or down. If you need to secure currency with Sterling, ensure you have contacted us before Tuesday to discuss how the releases may affect the cost of your currency purchase.

Last week we correctly predicted the currency movements on the back of the Bank of England decision to hold Quantitative Easing, and getting the timing right can save you thousands of pounds on a currency transfer. Take advantage of the expert knowledge we offer by contacting us today, and help us help you make the most of your currency by achieving the best currency rates.

Monday
A fairly quiet day for data releases, with the main release being the German Trade Balance Data. This is the total balance between imports and exports, and as Germany is the largest economy in the EU, it can affect GBP/EUR rates. Also from Germany we have Industrial Production figures showing how this sector is performing.

Tuesday
In contrast to Monday we have a busy day today. For the UK, we have GDP estimate, House Price Data, Industrial & Manufacturing Production and Trade Balance data. With so much being released, we expect a volatile day for the pound. If the above releases come in above forecast, expect the pound to gain. If figures are worse than expected however, expect big falls for the pound.

Wednesday
Today is US Focused, with releases outlining Import Prices and Jobless Claims. The USD is very weak at the moment creating the best buying levels for 9 months. If the above data is good, then expect a reverse of this trend and rates to fall back below $1.60.

Thursday
US Markets are closed for Veterans Day (Remembrance Day). The only release of note being a Monthly report from the EU.

Friday
German and EU Gross Domestic Product are the most important releases. This will show how the EU economy is growing, and may affect the value of the Euro. Also from the EU we have industrial production, so we expect some volatility for GBP/EUR rates today.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Pound gains on BoE decision to hold QE

5th November 2010
Good morning. Sterling jumped to a 9 month high against the US Dollar and gained versus the euro yesterday, buoyed by a Bank of England decision to keep rates unchanged and its asset-purchasing programme on hold as we predicted yesterday. Rates at 08:30am are as follows:

• GBP/EUR 1.1403
• GBP/USD 1.6203
• GBP/AUD 1.5941
• GBP/NZD 2.0423
• GBP/CAD 1.6243
• GBP/CHF 1.5520
• GBP/ZAR 10.992
• GBP/JPY 130.72
• GBP/HUF 310.74
• EUR/USD 1.4207

Bank of England decision

The Bank of England has held UK interest rates at a record low and decided not to pump more money into the economy via quantitative easing (QE). The decision to make no change to policy comes after recent figures on the economy showed good growth.

Gross domestic product (GDP) grew at 0.8% in the third quarter - better than expected - and recent manufacturing data was also upbeat. Until these reports some experts had expected there would be more QE. As there was none, the pound gained against other currencies throughout the day.

Pound vs US Dollar

In contrast the US earlier in the weak decided to pump $600bn into the economy, and the result was a very weak US Dollar. Combined with the UK decision yesterday, rates for Sterling to US Dollar are at their highest for 9 months. If you need to buy USD, contact us today to see how our rates compare with your bank.

Pound vs Euro

Rates remain around €1.14 which is much better than the €1.11 we saw a few weeks ago. The rate is at this level due to the BoE decision and also better EU data that has strengthened the Euro. We expect rates for GBP/EUR to remain volatile however, as any further poor UK data will likely push the pound lower.

A second round of quantitative easing in the new year remains a possibility if the UK economy falters as the government implements sharp cuts in public spending in an attempt to reduce high levels of debt. The BoE are very uncertain about where to go next, and this uncertainty is likely to weigh on the pound in the coming weeks and months.

Today's data

The UK and EU release more inflation data, so expect GBP/EUR to be choppy today. Retail Sales are also released from the EU along with German Factory orders. US unemployment and Non-Farm payrolls are the main release today however, and we expect volatility in GBP/USD.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Quantitative Easing, and the effect on Sterling

4th November 2010
Good morning. Quantitative Easing. The FED did it yesterday to the tune of $600bn. The news has weakened the dollar and pushed rates higher. Today the BoE will announce if they decide to follow suit, in what seems to be developing into a war between economies to weaken their currency. More on this in a moment after the usual snapshot of rates:

• GBP/EUR 1.1386
• GBP/USD 1.6174
• GBP/AUD 1.6032
• GBP/NZD 2.0508
• GBP/CAD 1.6248
• GBP/CHF 1.5652
• GBP/ZAR 11.018
• GBP/JPY 130.82
• GBP/HUF 309.05
• GBP/AED 5.9348
• EUR/USD 1.4199

FED announce $600bn Quantitative Easing (QE)

The Federal Reserve has announced that it will pump $600bn (£373bn) into the US economy by the end of June next year to try to boost the fragile recovery. Interest rates are already close to zero, which means the Fed cannot reduce rates any further in order to boost demand - the more traditional policy used by central banks to stimulate growth.

Instead, it has announced a fresh round of QE, in which it will create money to buy long-dated government bonds. The programme has been dubbed QE2, after the Fed pumped $1.75tn into the economy during the downturn in its first round of QE.

Many believe this is less about stimulating the economy and more about purposely weakening the US Dollar. In the last round of QE, the actual effect was hard to quantify. There's no reason to believe this second round will be any different.

We believe this is more to do with weakening the US Dollar to make it's exports more attractive, and links into to the possible Currency War we discussed recently.

Bank of England to follow suit?

A few weeks ago most analysts thought that the BoE would indeed embark on another round of QE. However in the last few weeks we've had better GDP figures, better manufacturing and housing data, and the recovery looks better than originally thought.

"I think QE is off the table until next year," said Michael Hewson, market analyst at CMC. "There was a sell-off after disappointing construction PMI but sterling is very susceptible to data news because of the bipolarity of the Bank of England monetary committee."

The MPC began a two-day meeting with the decision to be announced on Thursday. Sticky inflation in the UK means the BoE is likely to keep policy on hold although there is still an outside chance of more quantitative easing.

Given the fact that economies are purposely trying to weaken their currencies to boost export demand, despite the better figures of late there is still a chance more QE will be announced.

What may be the effect on exchange rates?

If they do announce QE it will likely weaken the pound and push exchange rates lower. If they don't announce it, Sterling may go higher but for the most part this is already priced into the market, given that most analysts now do not expect further stimulus. The vote split released in 2 weeks will also be closely watched, as in recent months there has been a lack of consensus among the Monetary Policy Committee (MPC), and if there is another 3 way split showing indecision on how to move forwards, this could also weaken the pound.

Today's Data

Interest Rate decisions for both the EU and UK today. Rates are likely to be left on hold, but if the BoE opt for further stimulus in the form of Quantitative Easing, expect the pound to fall sharply. If no QE is announced, the pound will probably strengthen. Either way we expect movement one way or the other today, so ensure you have discussed your options with us well in advance of today’s release.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.