Pound/Euro rates climb September 2011 - Why?

Friday 9th September 2011

Good morning. Well, what a difference a day makes! This time yesterday the Pound/Euro rate was €1.1320, with forecasts for it to drop further. Instead, the Euro weakened significantly on the back of the press conference by ECB president Jean Claude Trichet, and this caused GBP/EUR rates to rise by over 1.5% to near €1.15. Today we'll take a look at his comments and what caused the gains. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1497
• GBP/USD 1.5973
• GBP/AUD 1.5036
• GBP/NZD 1.9125
• GBP/CHF 1.3923
• GBP/CAD 1.5795
• GBP/ZAR 11.475
• GBP/JPY 123.68
• GBP/DKK 8.5610
• GBP/NOK 8.6456
• EUR/USD 1.3891

Pound makes significant gains vs Euro
















These charts show the GBP/EUR and GBP/USD rates as they moved throughout the day yesterday. There was a general strengthening of Sterling in the morning as a UK clearer purchased the Pound, creating strength.

Then, we had the BoE decision to hold interest rates, and no mention was made of QE at all. This helped the pound further, although we'll have to wait 2 weeks to see if the minutes show any discussion of QE. Rates then levelled off waiting for the ECB press conference at 13:30pm.

In the press conference, ECB President Jean-Claude Trichet highlighted "downside risks to economic growth" in the euro zone after leaving interest rates on hold. Markets believe future rate hikes are off the table in the EU and the ECB may even need to cut rates by the end of this year. The comments significantly weakened the Euro, which through the day climbed from €1.1320 to nearly €1.15 - this represents a £2000 saving on a €150,000 property purchase in only one day!

So will the Pound continue to go up against the Euro?


Despite sterling's rally, analysts cautioned that signs that the economy is continuing to weaken while the euro zone's debt crisis festers could prompt the BoE to add to asset purchases in the coming months.

"Although the case for more stimulus (QE) has certainly strengthened, the deterioration in the demand outlook was evidently deemed insufficient to warrant an immediate move," analysts at Barclays Capital said in a note. Translated, this means although no QE for now, there probably will be some to come soon, and this will likely limit any further gains in the rate.


So what to do if you need to buy Euros?


You could either fix the rate now while it's very good with a Forward contract; you only lodge 10% of what you want to convert, and we can hold the rate for up to 2 years for you.


If you think the rate may gain further, then you can place a 'Stop Loss' order. This means you can still aim for a higher exchange rate, but should rates fall back away, you can set a lower limit where your currency will be purchased automatically, thus having a safety net should things not go your way.

Whatever you need to do, send us an enquiry now so we can discuss the different options with you. Our exhange rates are up to 5% better than offered by banks, so take the first step to making the most of your currency now and click the link below for a free consultation.

Sterling falls on rumour of more QE

Thursday 8th September 2011
Good morning. Sterling has fallen to an 8 week low this morning against a basket of currencies, on speculation the Bank of England (BoE) may have to pursue more Quantitative Easing (QE) to try to stimulate growth in the economy. We have interest rate decision from the BoE today, and if they do indeed announce QE then Sterling could drop further. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1326
• GBP/USD 1.5934
• GBP/AUD 1.5040
• GBP/NZD 1.9138
• GBP/CHF 1.3727
• GBP/CAD 1.5705
• GBP/ZAR 11.372
• GBP/JPY 123.22
• GBP/DKK 8.4343
• GBP/NOK 8.5712
• EUR/USD 1.4063

Sterling falls on rumour of further Quantitative Easing

Due to continuing poor data showing growth is slow in the UK, many analysts think that the BoE will have no choice other than to pump more money into the economy through Quantitative Easing. A Reuters poll on their website today shows economists expect there is a 35% chance the BoE will resort to another bout of asset purchases to support the flagging economy.

However, London traders said some in the market were positioning for the possibility the BoE may announce more stimulus on Thursday, given persistent signs of a slowing economy in the past month. More quantitative easing would be negative for the pound as it would flood the market with the currency, reducing demand. If they do announce it today at 12:00pm then expect exchange rates to drop.

Interest Rate decisions today

Both the UK and EU announce interest rates decisions today at 12:00pm and 12:45pm respectively. We expect both zones to leave rates on hold at 0.5% (BoE) and 1.5% (ECB). As mentioned above however, we will watch for any mention of QE that could hurt the pound.

In the EU, while we expect no change in rates, they give a press conference at 13:30pm and often the comments made can significantly influence the value of the Euro.

If you need to buy or sell foreign currency at the best exchange rates, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound falls against EUR after Swiss National Bank intervene

Wednesday 6th September 2011
Good morning. Sterling fell yesterday after George Osbourne gave a negative speech on UK growth. The Pound hit a 7 week low against the US Dollar, and also fell vs the Euro after the Swiss National Bank put set a floor on the EUR/CHF rate, causing the biggest one day swing in exchange rates I've ever seen. At 08:30am this morning, rates are as follows:

• GBP/EUR 1.1357
• GBP/USD 1.5984
• GBP/AUD 1.5076
• GBP/NZD 1.9304
• GBP/CHF 1.3702
• GBP/CAD 1.5785
• GBP/ZAR 11.346
• GBP/JPY 123.47
• GBP/DKK 8.4578
• GBP/NOK 8.5112
• EUR/USD 1.4067

Swiss National Bank intervene in exchange rate

The euro rose broadly after the SNB said yesterday it would set a minimum exchange rate target of 1.20 francs to the euro and would enforce it by buying foreign currency in unlimited quantities. Immediately after the announcement, Sterling shot up vs the Swiss Franc, as this chart illustrates:

The rate shot up from 1.28 to 1.38 in a matter of minutes, easily the biggest one day swing in exchange rates I have ever seen. Just a few weeks ago the rate was 1.17 so it has improved by a staggering 15%, of which yesterday accounted for nearly 8%.

The Euro gained on the announcement, pushing GBP/EUR rates lower, however the drop was limited by continued fears about EU debt. Against the US Dollar, the Pound also fell, as investors seek out a new safe haven now the CHF is no longer attractive.

UK Economic Outlook gloomy

Two things happened yesterday to cast doubt on the UK recovery. UK service sector data posted its biggest drop in a decade, in another sign the British economy is struggling, keeping the topic of more quantitative easing on the Bank of England's agenda.

Secondly the chancellor George Osbourne admitted the economic recovery hopes had been revised down, following a raft of recent poor UK data.

This compounded the poor retail sales, and has put Sterling on the back foot.

Summary

The Dollar is gaining strength now the Swiss Franc is not as attractive as a safe haven. This is to the detriment of perceived weaker currencies such as the Pound and the Euro. The Euro has also gained due to the intervention of the Swiss National Bank. The net result is lower GBP/EUR and lower GBP/USD rates, and unless we get further developments from the Eurozone regarding sovereign debt, we think these declines may well continue.

If you need to buy currency and want to discuss the options we have to protect you against any adverse exchange rates movements, send me an enquiry for free now, and have a consultation on how you can take control of your currency requirement.

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Weekly GBP/EUR and GBP/USD forecast

Tuesday 6th September 2011
Good morning. Today we'll take a detailed look at GBP/EUR and GBP/USD rates over the course of the last weeks trading. In this week’s Report:

• Pound slips away on poor data but rallies at end of week
• UK interest rates to remain on hold for some time
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

At the start of the week we saw the GBP/EUR rate reduce for two consecutive trading days to 1.1283. Clients were receiving less Euros for their pounds as the Euro gained ground against Sterling. This movement would have seen a difference of nearly 1000 euros on a £200,000 trade over a two day period.

Sterling was vulnerable almost across the board this week. UK net lending and money supply data was poor on Tuesday and consumer confidence data remains at very low levels. The euro was on the back foot.

Euro zone annual inflation was unchanged in August while the number of people without jobs continued to increase. This was confirmed by figures released on Wednesday, adding to expectations that the next ECB (European Central Bank) interest rate move could be a cut rather than a hike. As a result we saw GBP/ EUR trade around the €1.13 level and a dip in the market was looking increasingly likely towards the latter stages of the week as the euro continues to enjoy hefty investment from Asian sovereign buyers.

EU statistics office Eurostat said inflation in the 17 countries using the euro was 2.5 percent year-on-year in August, the same as in July, as expected by economists.
The European Central Bank has indicated they want to keep inflation below, but close to, 2 percent, and economists had been expecting the bank to raise interest rates a third time this year to 1.75 percent from 1.5 percent to stem price pressures.

There was no surprise month-end moves from the British Pound this time, Wednesdays session was a case of sideways trading among the major currencies, though the euro had weakened significantly by Thursday morning.

With regards to the euro exchange rate we note that PMI (Purchasing Managers Index) numbers are due across Europe with slight declines expected in general and risk appetite should respond accordingly.

Friday morning’s whole-of-Eurozone Producer Price Index data showed an acceleration in the increase in input prices for Eurozone producers. Invariably, manufacturers will pass these price rises on to consumers, so the figure suggests that the single economic area may face higher prices as 2011 draws to a close, meaning further interest rate rises by the ECB are increasingly likely.

If you need to buy or sell Euros, send us an enquiry today.

Sterling vs. US Dollar;

The Sterling/Dollar had a bullish day on Monday, as traders continued to sell the USD against many other currencies. As the stock markets rallied, the Pound gained strength against the Greenback.

On Tuesday Pound/Dollar decreased by nearly 170 pips, in converse with the positive Interbank sentiment at nearly +1%, depreciating from 1.6420 to 1.6253, closing the day at 1.6297.

The pound edged higher against the U.S. dollar on Wednesday, as the dollar was weighed by mounting speculation that the Federal Reserve may soon implement fresh stimulus measures to boost U.S. growth.
On Thursday Pound/Dollar decreased with nearly 125 pips, in line with the negative Interbank sentiment at almost -8%, depreciating from 1.6257 to 1.6130, closing the day at 1.6178.

The pound slipped to a three-week low versus the US dollar on Thursday afternoon to $1.6197 after data released showed that manufacturing activity in the UK shrank in August, further signalling that the economic recovery is stalling.

Friday afternoon’s Non-Farm Payroll figure caused massive price action for the Dollar at the time of its release. The figure immediately caused investors to move out of stocks and into defensive bond plays, which saw the US Dollar gain ground as the week’s session drew to a close.

The Pound edged higher against the Greenback on Friday, extending a bounce from a 3-week low struck on Thursday at 1.6130 ahead of the US jobs data. GBP/USD managed to regain the 1.6200 mark during the European session and touched a daily high of 1.6253 in recent trade.

If you need to buy or sell US Dollars, send us an enquiry today.

Weekly Economic Data that may affect exchange rates

Tuesday – Today in Australia we have the RBA interest rate decision and policy statement. In the Eurozone we have GDP figures month on month and year on year.

Wednesday – Wednesday sees industrial production and manufacturing production figures released in the UK, whilst in Canada we have the BoC interest rate decision.

Thursday – An important day for the UK and Eurozone with interest rate decisions for both economies. On the other side of the pond we have jobless claims data.

Friday – We end the week with a busy day in UK but quieter elsewhere with data Producer Price Index in the UK which measures the change in the price of goods manufactured. The UK also releases figures relating to the Trade Balance and Producer Price index.

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Blog off...

Good morning. As regular readers will know, I usually update this blog each weekday morning to keep existing and potential clients up to speed with what's happening with exchange rates and the currency markets.





I'm away for a week's holiday and therefore the blog will also shut down for a week, unless there are any earth shattering stories that need attention! I will be back in action on Tuesday the 6th of September, but you can keep up to date with exchange rates on our Twitter feed which is regularly updated with the latest live exchange rates.





















If you need information on our exchange rates in the meantime, click below to send us an enquiry, and one of my colleagues will be happy to answer any of your questions.





Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now and click the link below.

Weekly GBP/EUR & GBP/USD report, and weekly data

Tuesday 30th August 2011

Good morning. As is customary for Monday mornings, today we'll take a detailed look at the movements in Sterling/Euro Sterling/US Dollar and a round up of the weeks data that may affect exchange rates



In this week’s Report:



• Sterling starts to fall on poor UK data

• UK Interest Rates going to remain on hold for some time

• GBP/USD falls from 2 year high

• Round up of the week’s data that may affect rates



(For currencies other then GBP, EUR and USD, contact us for a consultation)



Sterling vs. Euro;



After the previous week saw more than a 2% gain in the Sterling/Euro exchange rate, we hoped that last week would at least provide some degree of calm for the volatile pairing, but unfortunately this wasn’t to be.



























Tuesday saw better than expected CBI industrial order data from the UK which was closely followed by a large fall in Eurozone economic sentiment from the ZEW. This is a key indicator for the health of the EU economy over the coming months and such a large fall does not look good.



These concerns were compounded when on Wednesday both German IFO business climate figures and Eurozone industrial new orders were worse than expected and the industrial order figures actually showed a negative reading.



Later in the week UK consumer confidence rose and GDP figures remained at 0.2% after fears they could be downwardly revised, so surely with all the poor EUR data and some reasonable figures for the UK the rate went up? Unfortunately not...



MPC member Martin Weale gave a speech in Dublin on Thursday in which he explained the reasons for him to abandon his call for a 25 basis point hike in the UK interest rate at the latest policy meeting. The main reason is the sharp deterioration in economic data since the start of the year and there are now suggestions that we could see a coalition in favour of renewed asset purchases (Quantitative Easing) between members of the Bank of England should the UK economic outlook deteriorate significantly.



It has forced the Pound to retreat by 1.5% against the Euro since Wednesday of last week and just goes to show that even if the data suggests one thing, the rate can do quite the opposite. We had already expected the interest rate in the UK to remain at the current all time low until at least May 2012 but now the MPC has a unanimous 9-0 vote in favour of keeping the rate at 0.5% it could stay there until late 2012 or even 2013.



There doesn’t seem to be much out on the data front this week so we expect the rate to mainly be driven by continuing debt problems in the EU and any more news about a stagnating UK economy. The mid-market rate should remain range-bound between 1.12 & 1.15 and even though this doesn’t seem like a huge movement, it can make a £4,600 difference on a €200,000 trade.



Do you need to buy or sell Euros? Send us a free enquiry now.



Sterling vs. US Dollar;



Sterling maintained its march against the dollar early last week bolstered by profit taking and support from a slight recovery in risk appetite after less gloomy than forecast China manufacturing data and German factory activity numbers marginally eased global growth worries. Further gains were expected to be limited due to concerns about the UK's faltering economic recovery.

By mid-week Sterling fell 0.5 per cent to $1.6411 on better-than-expected U.S. durable goods orders data which reduced some dollar bearishness temporarily. Analysts said sterling would struggle to find clear direction ahead of a speech by Federal Reserve President Ben Bernanke on Friday.

Some investors were speculating he may use the speech to signal further monetary stimulus to prop up the faltering U.S. economy whilst others had been betting on sterling in recent sessions on the perception the UK is a safer investment destination given U.S. fiscal problems and the euro zone debt crisis that shows few signs of resolution.



Market analysts said sterling may come under renewed pressure, given the UK economy is struggling and rate hike expectations have been pushed back into late 2012. Traders said the pound remains at risk of selling if data continues to show the economic recovery is stuttering, which would increase speculation that the Bank of England may opt for more "quantitative easing" stimulus.



Friday saw US Q2 GDP figures return slightly lower than expected at 1% growth for the quarter. Though growth remains weak, Fed officials do not appear particularly concerned about recession risks, and some have voiced doubts about the wisdom of more QE. The dollar pared losses against Sterling as Federal Reserve Chairman Ben Bernanke said the central bank was prepared to employ tools as needed to promote a stronger U.S. recovery but offered no definitive action and stopped short of signalling QE3.



To put last week’s market movements into perspective, a typical transfer of $200K would have cost £4500 more at the end of the week.



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Weekly Economic Data that may affect exchange rates



Monday – No UK Data yesterday as it was Bank Holiday. There were some GDP figures from Germany and Home Sales data from the USA



Tuesday – Today we have UK House Prices and Mortgage Approvals. Eurozone & USA confidence figures are also released today. Staying in the US, we have the FOMC minutes, which show what was discussed at their recent interest rate decision.



Wednesday – Unemployment data from Germany and the EU and USA are the main releases to watch out for today. We also see GDP figures from Canada and Factory Orders from the USA.



Thursday – The busiest day of the week. We start with Retail Sales from Australia and Switzerland, and then GDP figures are released for Germany & Switzerland. Later in the day we have inflation figures from Germany and the UK. From the USA we see Jobless Claims and Manufacturing figures.



Friday – We end the week with Retail Sales from Germany, and Construction figures from the UK. In the US, we have further unemployment measures in addition to the non-farm payrolls numbers. As these are notoriously difficult to forecast, the actual figures often differ significantly, causing GBP/USD volatility.



If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound falls vs Euro on weak UK data

Friday 26th August 2011

Good morning. Sterling has fallen again vs the Euro and US Dollar, and we are now well down from the highs seen earlier in the week. It's mainly due to poor UK Retail Sales, and also buying of the Euro causing it to gain strength. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1293

• GBP/USD 1.6295

• GBP/AUD 1.5548

• GBP/NZD 1.9580

• GBP/CHF 1.2879

• GBP/CAD 1.6076

• GBP/ZAR 11.754

• GBP/JPY 125.44

• GBP/DKK 8.4134

• GBP/NOK 8.8024

• EUR/USD 1.4425



Sterling falls again vs Euro and US Dollar



The Pound had gained in recent weeks as market turmoil across the world caused investors to shun risk, and this had driven investment towards the UK. We have been seen as a safe investment due to having stable government, a safe credit rating, and a fiscal plan in place to reduce our deficit. However, it seems the UK is no 'Port in the Storm', as highlighted by Stephanie Flanders, economics editor at the BBC. You can read her interesting take on this here on the BBC site.



What it means, is that the Pound has now started to drop back away now we have started to get economic figures that are quite poor, highlighting the weak growth we are seeing in the economy.

Market players said sterling may come under renewed pressure, given the UK economy is struggling and rate hike expectations have been pushed back into late 2012. Traders said the pound remains at risk of selling if data continues to show the economic recovery is stuttering, which would increase speculation that the Bank of England may opt for more "quantitative easing" stimulus. So, it's likely we may see further falls for Sterling.



EU Banks may pull rates back up



Despite the recent falls in the GBP/EUR rate, EU banks are facing problems also, and it looks like this might develop further, and if so the Euro could weaken and pull rates in the other direction. In these volatile times Stop Loss and Limit orders can help you take advantage of any gains, while protecting against a fall in rates. Contact us today to discuss how these work.



Today's Data



After yesterday’s German GDP figures, today is the turn of the UK. This will show at what pace the economy is growing, and is likely to have an impact on the value of Sterling. GDP is also released in the USA in the afternoon, followed by a speech from FED chairman Ben Bernanke.

Sterling falls on better US Data

Thursday 25th August 2011

Good morning. After several days of not much happening with exchange rates, Sterling fell against the Euro and US Dollar yesterday. Investors had been betting on Sterling as a safe haven currency, but better than expected US data reversed this trend, pushing the Pound lower as we have been warning for several days. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1331

• GBP/USD 1.6384

• GBP/AUD 1.5644

• GBP/NZD 1.9717

• GBP/CHF 1.2993

• GBP/CAD 1.6156

• GBP/ZAR 11.848

• GBP/JPY 126.29

• GBP/DKK 8.4392

• GBP/NOK 8.8727

• EUR/USD 1.4459



Sterling falls on better US Data



Market Analysts have said some investors had been betting on the Pound in the last few weeks, on the perception the UK is a safer investment option, U.S. fiscal problems and the euro zone debt crisis that shows few signs of resolution. This meant that the Pound had gained in recent weeks, and exchange rates had risen. For some time we have been warning that the gains were not likely to last, and yesterday this was the case.



A surprise rise in durable goods orders from the USA for last month strengthened the US Dollar, and as a result Sterling weakened and fell against other currencies. For several days there has been little data in the markets to move exchange rates, but as soon as we got some, the Pounds gains came to an end.



While sterling has been supported due to its perceived "safe-haven" status, few expect it will gain much more due to expectations that UK interest rates will stay low for a prolonged period as Britain's economy struggles to recover.



The pound remains at risk of selling if economic data continues to show the recovery is stuttering as it would increase speculation that the Bank of England may opt for more quantitative easing. For the remainder of this week we have GDP figures from most major zones, which will show how each economy is growing, and we expect the numbers to have a significant effect on exchange rates.



Today's Data



The most important release today are German GDP figures. If poor these could weaken the Euro. In the USA we see Jobless Claims and Unemployment Data.



If you need to buy or sell foreign currency at the best exchange rates, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Sterling remains range bound vs Euro & USD

Wednesday 24th August 2011

Good morning. Sterling again remained stable against the Euro and US Dollar yesterday, with little movement in exchange rates. There are still warnings though that its gains are expected to be limited due to concerns about the UK's faltering economic recovery. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1436

• GBP/USD 1.6486

• GBP/AUD 1.5747

• GBP/NZD 1.9903

• GBP/CHF 1.3059

• GBP/CAD 1.6311

• GBP/ZAR 11.870

• GBP/JPY 126.38

• GBP/DKK 8.5195

• GBP/NOK 8.9578

• EUR/USD 1.4408



Sterling remains stable, for now...



The Pound remained range bound against the Euro and Dollar yesterday, as there were no real surprising data releases. Sterling also drew support from a recovery in risk appetite after better than expected China manufacturing data and German factory activity numbers eased global growth worries and helped stocks.



Sterling has benefited recently due to concern about EU debt and the growth issues in the USA. Other than that, the fact remains that the UK economy is facing stagnant growth, and as soon as we get any weaker UK data it's likely Sterling could dip again. Weak economic figures would increase the chance of more Quantitative Easing from the BoE, and that would likely cause the Pound to fall.



With little data from the UK today, we expect rates again to remain range bound today, while we wait for GDP figures from across the globe on Thursday and Friday.



Today's Data



Today’s UK data is Nationwide Housing Prices. In the EU we have Industrial New Orders, and Business Climate assessment figures from Germany. In the USA, we have Mortgage Approvals. New Zealand releases Retail Sales.



If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound remains stable, but analysts warn of drop

Tuesday 23rd August 2011

Good morning. With no data of note being released yesterday, Sterling remained steady against both the Euro and US Dollar, however analysts are still warning that upcoming data for the UK may highlight the fragility of the UK economy and push the Pound back down. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1435

• GBP/USD 1.6504

• GBP/AUD 1.5731

• GBP/NZD 1.9817

• GBP/CHF 1.3006

• GBP/CAD 1.6274

• GBP/ZAR 11.804

• GBP/JPY 126.54

• GBP/DKK 8.5162

• GBP/NOK 8.9426

• EUR/USD 1.4429



Sterling remains stable vs other currencies



As there were no scheduled releases yesterday there was little movement on the currency markets. With no surprise announcements the Pound remained stable against other currencies. As investors are still seeking refuge from turbulence in the markets caused by the EU debt crisis, Sterling remained supported above €1.14 against the Euro.



Analysts warn Sterling could fall



The pound remains strong at the moment because the UK has its own independent currency and the government is perceived to be doing something fiscally austere. It's a haven while there is global asset market turmoil and a lack of solution to the European debt situation. So it's only really these facts that are keeping Sterling supported.



Analysts said the pound's scope for gains may be limited given wariness that upcoming data may highlight the fragility of the UK economy. Despite sterling's recent strong gains, some analysts warned UK economic fundamentals remained shaky.



Recent data suggests the UK economy is stagnating, although it is holding up better than the United States where a poor factory activity gauge last week prompted some to warn the economy risked slipping into another recession. Later in the week attention will focus on the second estimate of second quarter GDP due on Friday, which is expected to confirm the economy grew by a lacklustre 0.2 percent.





Today's Data that might affect rates



UK Mortgage Approvals are released today, showing the health of the UK housing market. From the Eurozone we have Inflation Data from Germany, and also Economic Sentiment Surveys from Germany and the EU. Also from the EU, we have measures of consumer confidence that may affect the value of the Euro. In the USA, Home Sales figures are released. Trade Balance figures and Inflation data are released from New Zealand.



If you need to buy or sell foreign currency, click here now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly Pound vs Euro & Pound vs US Dollar forecast

Monday 22nd August 2011

Good morning. As regular readers will know, on a Monday we take stock of the last weeks movements in Pound vs Euro and Pound vs US Dollar. In this week’s Report:



• Sterling hovers near 12-week high vs. struggling euro

• Scope for Sterling gains seen as limited due to weak UK economy

• GBP/USD rates close to 2 year high

• Round up of the week’s data that may affect rates



(For currencies other then GBP, EUR and USD, contact us for a consultation)



Sterling vs. Euro;



Sterling hovered near a 12-week high against the euro towards the end of last week, as concerns about a worsening euro zone debt crisis dented the single currency. Mounting fears of a global recession and concerns about stresses facing some European banks caused European stocks to fall 2.6 %, extending a steep decline that continued throughout the week.





















Analysts said sterling has benefited to an extent from the troubles besetting the euro, though its scope for gains was expected to be limited due to recent evidence of a sluggish UK economy. The euro was down 0.1 % by Thursday last week, which placed it not too far from the August 5 low, below which would mark its weakest position since late May.



"Given the renewed demand for safe-haven currencies, sterling has fared quite well," said Michael Derks, strategist at FXPro. "Sterling is the least bad of the big currencies, but economically the country is still completely stuck in neutral". These comments highlight the fact the gains may be limited.



Data on Thursday showed British retail sales barely grew in July as cash-strapped consumers cut back on spending, underscoring the risks for the UK's already fragile economic recovery. However, public finance figures on Friday showed that the UK government's harsh austerity measures are helping to bring down UK debt as intended, which is a welcome sign of progress for the UK economy, albeit only a small glimmer of hope in an ocean of neutrality.



Higher unemployment and rising inflation are expected to continue to restrain consumer spending and, together with signs key British export markets are slowing, increase the risk the UK economy may still fail to pick up. In spite of stubborn inflation, markets expect the Bank of England to keep interest rates on hold until the end of 2012, with possible calls for further quantitative easing to stimulate growth. This will mean that although the economy may be quietly strengthening, it may not be reflected on the currency markets for quite some time, with further QE likely to be interpreted by investors as a sign of weakness for Sterling.



So, with exchange rates close to a 3 month high, and fears Sterling could slip back away due to poor economic conditions in the UK, those that need to purchase Euros within the next 6 months should contact us now to discuss how we can help protect against the market dropping.



Do you need best exchange rates to buy or sell Euros? Send us a free enquiry now.



Sterling vs. US Dollar;



Last week the GBP/USD got very close to a two year high which was mainly due to a batch of poor US data showing a plunge in factory activity in the U.S. mid-Atlantic region. Concerns about the UK recovery and the chance of monetary easing are expected to keep the pound in check. The poor data from the US made the dollar cheaper to buy, and this is why rates climbed against the USD despite dropping against the Euro.























Traders said markets were thin and declining risk appetite was pushing investors back to the dollar in the near-term, but the pound was gaining some support from the perception it was the best of a bad bunch of currencies.



Last week markets across the World dropped, with the biggest fall on the FTSE since the financial crisis began. We saw a flight from risk, where investors were jittery and moved their funds to perceived safe havens. Usually this means the US Dollar and Swiss Franc, however with problems in the US and the Swiss keeping their currency weak, Sterling benefited.



"Despite negative data coming out of the UK suggesting there's quite a significant cyclical downturn taking place, global investors see the UK as relatively stable from a political and ratings perspective against Europe and the U.S.," said Ian Stannard, head of European FX strategy at Morgan Stanley.



So Sterling is gaining support from the perception it is the best of a bad bunch of currencies. We have stable credit ratings, political calm and a deficit reduction plan in place. The government's fiscal austerity programme is also expected to hamper demand in the economy, leaving sterling vulnerable to weakness in the medium term.



Many are questioning the Pounds buoyancy at the moment, as the UK economy is far from healthy. Just last week we had poor Retail Sales figures, higher than expected unemployment, and dovish minutes from the Bank of England. Due to this, many analysts think that these gains will be short lived.



So in summery Sterling vs USD rates got very close to the best they have been in two years, however many analysts do not expect these levels to last for long.



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Weekly Economic Data that may affect exchange rates



Monday – There are no scheduled economic releases today.



Tuesday – UK Mortgage Approvals are released today, showing the health of the UK housing market. Rom the Eurozone we have Inflation Data from Germany, and also Economic Sentiment Surveys from Germany and the EU. Also from the EU, we have measures of consumer confidence that may affect the value of the Euro. In the USA, Home Sales figures are released. Trade Balance figures and Inflation data are released from New Zealand.



Wednesday – Today’s UK data is Nationwide Housing Prices. In the EU we have Industrial New Orders, and Business Climate assessment figures from Germany. In the USA, we have Mortgage Approvals. New Zealand releases Retail Sales.



Thursday – The most important release today are German GDP figures. If poor these could weaken the Euro. In the USA we see Jobless Claims and Unemployment Data.



Friday – After yesterday’s German GDP figures, today is the turn of the UK. This will show at what pace the economy is growing, and is likely to have an impact on the value of Sterling. GDP is also released in the USA in the afternoon, followed by a speech from FED chairman Ben Bernanke.



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Sterling at 2.5 month high vs Euro August 2011

Friday 19th August 2011

Good morning. Sterling rose well against the Euro yesterday, as investors perceived the Pound as the best of a bad bunch of currencies. As markets around the world plummeted on risk fears, Sterling gained and GBP/EUR rates are at a near 2.5 month high. At 08:30m this morning rates are as follows:



• GBP/EUR 1.1531

• GBP/USD 1.6500

• GBP/AUD 1.5916

• GBP/NZD 2.0061

• GBP/CHF 1.3028

• GBP/CAD 1.6325

• GBP/ZAR 11.881

• GBP/JPY 126.05

• GBP/DKK 8.5886

• GBP/NOK 9.0377

• EUR/USD 1.4304



Sterling gains significantly vs Euro



Yesterday markets across the world fell, with the biggest fall on the FTSE since the financial crisis began. We saw a flight from risk, where investors were jittery and moved their funds to perceived safe havens. Usually this means the US Dollar and Swiss Franc, however with problems in the US and the Swiss keeping their currency weak, Sterling benefited.



So Sterling is gaining support from the perception it is the best of a bad bunch of currencies. We have stable credit ratings, political calm and a deficit reduction plan in place. This meant GBP exchange rates gained, particularly against the weaker Euro, still reeling from failures of EU leaders to reach an agreement on sovereign debt.



So is Sterling going to remain strong?



Many are questioning the Pounds buoyancy at the moment, as the UK economy is far from healthy. Just this week we've had poor Retail Sales figures, higher than expected unemployment, and dovish minutes from the Bank of England. Due to this, many analysts think that these gains will be short lived.



The government's fiscal austerity programme is also expected to hamper demand in the economy, leaving sterling vulnerable to weakness in the medium term.



Best time to buy Euros?



Well it's certainly close to the best in well over 2 months, and given the uncertainty surrounding the world economy, those that need to buy Euros should consider fixing the rate while it's so good. Even if you don't need your funds for some time, a Forward contract allows you to fix today's rates for up to 2 years, and only lodge 10% of the total to be converted. Contact us today to discuss our exchange rates and how these contracts work.



Today's Data



We end the week with Public Sector borrowing from the UK, and further inflation figures from Germany.



If you need to buy or sell foreign currency and are looking for the best exchange rates to buy Euro / US Dollars, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Sterling makes gains against Euro/US Dollar

Thursday 18th August 2011

Good morning. Yesterday morning Sterling fell after poor unemployment data, however in the afternoon the Pound surged back against other currencies, creating close to the best exchange rates for several months. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1462

• GBP/USD 1.6515

• GBP/AUD 1.5755

• GBP/NZD 1.9849

• GBP/CHF 1.3136

• GBP/CAD 1.6230

• GBP/ZAR 11.758

• GBP/JPY 126.44

• GBP/DKK 8.5391

• GBP/NOK 8.9267

• EUR/USD 1.4402



BoE Minutes



Yesterday the Bank of England released the latest minutes to the recent decision to hold interest rates. They voted 9-0 to keep rates on hold, surprising many in the markets that thought 2 would vote for a hike in rates.



It didn't affect exchange rates too much, as we already know that rates in the UK are going to be left on hold for at least a year. The minutes also showed the policy-setting committee considered a new round of stimulus given a worsening economic outlook, acknowledging that problems in the euro zone were the biggest threat to the UK economy.



UK Unemployment



Data surprised yesterday, when the number of Britons claiming unemployment benefit jumped by more than expected last month, and the rate hit the highest level since February 2010. Immediately after the results, Sterling fell around 0.5% against other currencies.



Sterling surges in the afternoon



Despite the dovish BoE minutes and the higher than expected unemployment figures, Sterling surged in the afternoon, making gains against the Euro and US Dollar. After initial selling of the Pound after the poor data, traders were forced to cover these positions leading to a short squeeze on Sterling, helping push rates up nearly a cent against the Euro.



Summary



Those that need to buy Euros should consider taking advantage of these rates, as several times in the last month we have reached these levels, only for rates to quickly drop back away. With uncertainly surrounding the UK economy rates could easily drop back away.



Conversely, if we get further poor news from the EU, we could see the Euro weaken and rates climb, so it's certainly very volatile at the moment. Regardless which currency you need to buy or sell, contact us today to discuss the tools we have to help you achieve the best possible exchange rate.



Today's Data



Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.



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Pound vs Euro rates gain on EU debt

Wednesday 17th August 2011

Good morning. Sterling rose yesterday, after inflation figures reduced the risk of more Quantitative Easing. The Euro also weakened, after poor German GDP data, and a failure for the German and French leaders to reach an agreement over EU debt. Combined, this pushed GBP/EUR rates up. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1428

• GBP/USD 1.6438

• GBP/AUD 1.5684

• GBP/NZD 1.9681

• GBP/CAD 1.6157

• GBP/ZAR 11.718

• GBP/JPY 125.90

• GBP/DKK 8.5128

• GBP/NOK 8.9405

• EUR/USD 1.4381



Sterling rises but downside risks remain



Higher inflation yesterday for the UK reduced the risk of Quantitative Easing in the UK, pushing Sterling slightly higher against other currencies. However, with the UK economy fragile and UK interest rates still expected to stay at record low levels for at least a year, Sterling's gains were limited. Analysts expect the Pound to stay within its recent ranges against the euro and dollar.



Today is important, as we see the minutes to the BoE meeting earlier this month. Analysts said the higher inflation data could mean the minutes may not be as dovish as some traders had been positioning for in the wake of last week's downbeat BoE quarterly inflation report. Given that interest rates are going to remain low for some time, this will limit gains for Sterling.



Euro weakens on GDP and EU debt



EU and German GDP yesterday was lower than expected. The German economy only grew by 0.1%, France by 0.0%, and the EU as a whole only 0.2%. The slow growth figures weakened the Euro, making it cheaper to buy and pushing GBP/EUR rates up.



There was also a meeting yesterday between German and French leaders, however they failed to reach an agreement and this weakened the Euro further.



Today's Data



Various Unemployment measures are released for the UK today, and we also have the minutes to the latest Bank of England (BoE) decision to hold interest rates. Any mention of Quantitative Easing could weaken Sterling. From the Eurozone, there are Consumer Price Index figures, which if high could strengthen the Euro. From the US there are also inflation numbers released in the afternoon, along with mortgage approvals.



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Sterling falls vs Euro, gains vs US Dollar.

Tuesday 16th August 2011

Good morning. Sterling fell against the Euro yesterday, on worries there would be more Quantitative Easing in the UK. The Euro also gained strength on a jump against the Swiss Franc. The Pound gained against the US Dollar however, after a batch of weak US data weakened the USD. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1355

• GBP/USD 1.6335

• GBP/AUD 1.5662

• GBP/NZD 1.9670

• GBP/CAD 1.6075

• GBP/ZAR 11.687

• GBP/JPY 125.42

• GBP/DKK 8.4582

• GBP/NOK 8.9205

• EUR/USD 1.4378



Sterling falls against stronger Euro



The Pound slipped against a stronger euro during trading yesterday. The broad gains in the single currency were led by a jump against the Swiss franc. There is speculation that the Swiss central bank may announce more measures to stem the franc's strength, and this benefited the Euro, making it more expensive to purchase.



The euro also climbed on the back of buying by a UK bank, while traders said steady selling by UK corporates and sovereign investors tempered sterling's rally versus the dollar.



Sterling gains against US Dollar



Sterling rose against the USD yesterday after a batch of weak U.S. economic data hurt the U.S. currency, but concerns about the UK recovery and the chance of monetary easing are expected to keep the pound in check. The poor data from the US made the dollar cheaper to buy, and this is why rates climbed against USD despite dropping against the Euro.



Euro strong, Dollar weak, what about Sterling?



There is much UK economic data this week, including figures on retail sales and unemployment, and also the minutes to the recent BoE decision. Retail Sales are expected to show high street sales are struggling to rise while the jobs picture remains gloomy.



Even if the data shows the UK recovery is faltering however, analysts said the UK was not looking as bleak as the euro zone which is being hit by the debt crisis and slower growth in core countries, including France.



For this reason, many in the markets expect Sterling to be supported against the euro this week. Beware however, as comments from Bank of England policymaker David Miles yesterday said economic recovery was "fragile" and it was possible that more stimulus from quantitative easing might be necessary at some point. This would significantly hurt the Pound.



Today's Data



We start in the EU, where we have GDP figures from Germany, Europe’s largest economy. There are also GDP figures for the EU as a whole, in addition to EU Trade Balance. From the UK we have inflation data (Consumer Price Index). From the USA we will see the latest measures of Industrial Production and Housing Starts.



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Pound Sterling Forecast for GBP/EUR & GBP/USD

Monday 15th August 2011.

Good morning. As usual on a Monday, today we'll take a detailed look at the Pound/Sterling forecast for Sterling vs Euro, Sterling vs US Dollar, and this weeks data that may affect getting the best exchange rates.

In this week’s Report:



• Rumours of French downgrade weakens Euro

• Market Volatility creates big exchange rate swings

• BoE paint gloomy picture of UK growth

• Round up of the week’s data that may affect rates



(For currencies other then GBP, EUR and USD, contact us for a consultation)



Sterling vs. Euro;

Last week was a rollercoaster ride for all the major markets, with currencies and indeed the GBP/EUR cross being no different. Wild swings in both directions during continued choppy trading resulted in excellent price points for both buyers and sellers on this cross.

The market as a whole seems unable to decide whether Sterling or the Euro is the most stable bet going forward. Rumours that France along with several of its marquee investment banks were in line for credit rating downgrades swung the cross in the Pounds favour, only for gains to be pegged back by poor UK economic figures.



The most notable event which detracted from GBP gains was the Bank of England’s Growth forecast cut, which demonstrated to the market, as if it didn’t already know that times are still hard in the UK and that the economy is by no means out of the woods. Indeed it is still not out of the realms of possibility that a second recession could bite in Britain.



However for all the gloom on this side of the channel, much of the focus going forward will be on whether France with its problems, will be able to continue to support Germany in bankrolling the sovereign debt issues cropping up all over Europe. With severe worries about Spain and Italy requiring bailouts akin to those in Greece, Ireland & Portugal, the purse strings across the channel may not be as freely loosened as they have been thus far.



This week will probably continue to see fairly choppy rate fluctuations, although most traders will expect it to calm down when compared to the week gone by. A full list of the main data to watch out for follows later, but for this cross Tuesdays UK inflation figures and the Bank of England Minutes usually cause some volatility and Tuesdays’ Euro zone GDP figure is worth watching out for too. This said, often the biggest market moves occur on the back of events that appear on no calendar; the rumours and political events that unfold throughout the week.



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Sterling vs. US Dollar;

In what was one of the most turbulent weeks across the global markets since the credit crisis began in 2008, all eyes were on the US as worldwide stability looked shakier than ever. Global stocks saw Billions of dollars wiped from their value on consecutive days in the early part of the week as the markets readied themselves for another potential credit crunch.

In the wake of the US being downgraded to AA rating from AAA by the credit rating agency ‘Standard and Poor’s’, Sterling began the week at a near two-month high against the beleaguered Dollar as the downgrade led more investors to sell the greenback.



Sterling’s momentum against the Dollar was maintained early on Tuesday as the UK’s AAA rating looked safe following Standard and Poor’s Chief stating in an interview that he didn’t expect a ratings drop in the UK within the next 2 years. However, comments about Sterling becoming the next ‘safe haven’ currency were quickly dismissed in light of the unfolding problems with rioting in the capital which dragged on throughout the week.



This was followed just before lunch on Tuesday by a slight slip as UK manufacturing data fell by a surprise 0.4% rather than a 0.2% growth as expected – However, continuing concerns over the US prevented the Pound slipping too much. "In isolation this data is definitely sterling-negative. In ordinary conditions it feeds the idea the Bank of England will not be hiking interest rates any time soon," said Jane Foley, currency strategist at Rabobank.



The fortunes of Sterling were almost instantly reversed on Wednesday as the Pound fell by 1 percent against the Dollar following the news that BoE lowered its expectation for annual GDP growth to around 2.0 percent in the last quarter of 2011. In May, it had forecast 2.47 percent growth by the end of the year. Investors, appearing very fickle following comments earlier in the week took the news and headed straight back to the relative ‘safely’ of the US Dollar and out of Sterling.



Following the release of the inflation report, BoE Governor Mervyn King suggested that monetary policy would remain ultra loose with interest rates being kept at a record low of 0.5 percent for some time as the global economy is slowing. It is widely expected that interest rates will be kept on hold now until the end of next year.



Mervin King went on to say that adding to the BoE's asset-buying programme would be a possibility if the economic outlook deteriorated, but suggested that more quantitative easing may not be imminent. Despite the markets ending the week more stable than they started and with the stock market recovering somewhat, the global market’s future is far from predictable. Gold remains at near record levels and this is for good reason - no one is quite sure what will happen next.



Will we will drop from this seeming precipice into another full scale recession or will we be able claw our way slowly back to growth? All this uncertainty leaves the Cable notoriously difficult to predict. UK retail sales and US inflation data are just two of the releases this week which have the potential to see Cable move significantly - Speak to your FCG account manager for up to the minute market data and ensure that you capitalise on your gains whilst protecting yourself against negative market movement.



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Weekly Economic Data that may affect exchange rates



Monday – There is no data of note from the UK or EU. There is some trade flow data from the US, which is looked at as an indicator of the trade deficit.



Tuesday – We start in the EU, where we have GDP figures from Germany, Europe’s largest economy. There are also GDP figures for the EU as a whole, in addition to EU Trade Balance. From the UK we have inflation data (Consumer Price Index). From the USA we will see the latest measures of Industrial Production and Housing Starts.



Wednesday – Various unemployment measures are released for the UK today, and we also have the minutes to the latest Bank of England (BoE) decision to hold interest rates. Any mention of Quantitative Easing could weaken Sterling. From the Eurozone, there are Consumer Price Index figures, which if high could strengthen the Euro. From the US there are also inflation numbers released in the afternoon, along with mortgage approvals.



Thursday – Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.



Friday – We end the week with Public Sector borrowing from the UK, and further inflation figures from Germany.

If you need to get the best exchange rates to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound Euro Rate Forecast GBPEUR

Friday 12th August 2011

Good morning. Sterling had a choppy day in the markets yesterday, swinging up and down vs the Euro and other currencies as investors try to make sense of all the volatile data we have had this week. Today we'll look at Pound vs Euro, Pound vs US Dollar, and the options available to help you achieve the best exchange rates, whatever your currency requirement.



Pound vs US Dollar



Sterling hovered near 3 week lows against the dollar yesterday, with the Pound struggling after the Bank of England downgraded its growth forecast earlier in the week, and also due to risks of further declines growing as the UK government's fiscal cuts continue to bite. With the recent downgrading of the US, many expected the USD to weaken, however it remains a safe haven currency and this is keeping the dollar strong. Hard to call where this currency pair will move, but at the moment it remains around the $1.61 - $1.63 level.



Pound vs Euro



GBP/EUR rates fell this week as the Bank of England gave a gloomy outlook for economic growth. Rate then went back up on rumours that France was about to lose its AAA credit rating and that Societe Generale was in line for a government bailout. The rumours were denied by credit rating agencies, the French Treasury and Societe Generale. As such focus returned to poor UK figures, and this dragged rates back down again. The swings seem to be in line with markets deciding whether Sterling or the Euro is the best bet.



It was very choppy in the markets yesterday, with rates swinging between €1.1360 and €1.1445 as analysts tried to make sense of the growth figures and credit rating rumours.



In Europe, the concern centres on whether Spain and Italy will have to follow Greece, Portugal and the Republic of Ireland and require bailouts. The fear has since spread this week to whether other eurozone countries, and most notably France, can afford to put funds into an expanded European Financial Stability Facility that will pay towards any required future bailouts.



Swiss Franc has huge movements.



The GBP/CHF rate in the last week has moved between 1.1650 and 1.2700 in the last week. This is a huge movement, and caused by the Swiss National bank cutting the interest rate to try and weaken the currency. As the Swiss Franc (CHF) is a safe haven currency, it had become incredibly strong in the current market turmoil. As this was hurting the economy, the move was made to weaken the currency, and it's certainly had an effect.



The Euro also rose against the CHF, boosted by talk the Swiss currency could be pegged against the euro. If this were to happen, it would be aimed at weakening the CHF. The speculation is that the euro/Swiss franc pair may be pegged at 1.15 francs.



What are your options?



Whether you are buying or selling currency, exchange rate movements at the moment are very volatile, and could move either way by some margin. This could of course work for or against you, depending which way the market moves.



So, you could simply leave it to chance and hope rates move your way, however hope is not a reliable economic tool. There are various ways to take control of the market to ensure you don't get caught out by rates moving the wrong way.



Stop Loss and Limit Orders allow you to place an order to buy/sell currency if it goes up to a level not currently achievable, or below a pre-agreed level. In this way you take advantage of any gains in the rate, without leaving yourself open should things not move your way.



Alternatively you could fix the rate now with a Forward contract, and this is the best option for those of you that are risk averse. This give you the cost of your currency for up to 2 years, and you are protected against movements in any direction.



Whatever your currency requirement, don't just leave it to chance. Contact us today to discuss the options available with an expert currency broker.



To discuss these types of contract with us, send us a free enquiry today.

Pound falls on BoE cut in growth forecast

Thursday 11th August 2011

Good morning. Sterling fell yesterday after the Bank of England cut it's growth forecast. This pushed the Pound down against other currencies. Against the Euro, Sterling gained slightly due to rumours the credit rating of French banks may be at risk. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1351

• GBP/USD 1.6162

• GBP/AUD 1.5774

• GBP/NZD 1.9746

• GBP/CAD 1.6003

• GBP/ZAR 11.585

• GBP/JPY 123.86

• GBP/DKK 8.4564

• GBP/NOK 8.9185

• EUR/USD 1.4234



Bank of England cut growth forecast



The Bank of England has cut its UK growth forecast for 2011 from 1.8% to about 1.5%, warning that the "headwinds are growing stronger by the day". Bank governor Mervyn King said Europe's debt crisis and fears of contraction in the US overshadowed the world economy.



The Bank's report was compiled before the latest meltdown on financial markets, and Mr King acknowledged that "the mood in markets has taken a sharp turn for the worse". Some analysts believe the crisis in the markets will add to the Bank's existing concerns.



"It is important to remember that the report itself was compiled before the recent market volatility and so the forecasts will not have reflected the recent plunge in equities and commodity prices," said James Knightley, an economist at ING.



The news pushed Sterling down against other currencies and exchange rates fell.



French downgrade rumour weakens Euro



Despite Sterling falling against other currencies, against the Euro the Pound rose slightly on speculation that France could be the next triple A-rated sovereign to suffer a downgrade. Ratings agencies have since states this is not the case, however this demonstrates how volatile the markets are at the moment, and even the slightest rumour is enough to significantly alter exchange rates.



Today's Data



It's a bit quieter today, with a report from the European Central bank the only thing likely to affect GBP/EUR. In the USA there are various jobless measures.



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Why has Pound fallen against Euro August 2011

Wednesday 10th August 2011

Good morning. Sterling has fallen quite a bit in the last 24 hours, pushed down ahead of today's Bank of England (BoE) inflation report, that may well present a poor assessment of the UK economy. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1312

• GBP/USD 1.6254

• GBP/AUD 1.5691

• GBP/NZD 1.9465

• GBP/CAD 1.5964

• GBP/ZAR 11.579

• GBP/JPY 124.76

• GBP/DKK 8.4263

• GBP/NOK 8.8614

• EUR/USD 1.4366



Sterling down vs Euro and US Dollar



So why has the Pound fallen against the Euro August 2011? It's mostly due to today's BoE inflation report, that is expected to issue a poor assessment of the economy today. This follows data earlier in the week that showed a surprise fall in manufacturing output. This reminded investors of the fragility of the economy as it faces new challenges from global financial turmoil and also the widespread riots in London and other cities.



Today's BoE report will show it's latest growth and inflation forecasts today. Markets will be looking for clues to more Quantitative Easing, and it's this expectation that has hurt the Pound and dragged it down from highs against the Euro seen earlier in the week.



Just a few days ago markets were talking about Sterling being a new safe haven currency, however analysts now realise Sterling's gains are mostly due to the fact it's the best of a bad bunch. With issues in the USA and the EU regards debt, the Pound had gained as other currencies lost out.



However, according to Reuters, in the coming weeks sterling could be "well-placed" for more gains given the concerns about debt problems in the United States and its credit ratings downgrade, as well as the debt crisis in the euro zone. Meanwhile rioting and looting across London and in other cities this week also darkened the outlook for sterling as it pointed towards spreading social unrest.



Today's Data



German inflation figures will be closely watched today, for any hint of a further EU interest rate hike. In the UK we see a confidence report, and there is a Bank of England inflation report, along with a speech by BoE governor Mervyn King. Watch for any comments regards further fiscal stimulus (Quantitative Easing) that may weaken the Pound further.



If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Market Turmoil continues to affect exchange rates

Tuesday 9th August 2011

Good morning. Sterling continues to trade near a 2 month high against the Euro, which has weakened further as investors worry about the EU debt crisis. The Pound has gained from the US downgrade and Euro weakness. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1493

• GBP/USD 1.6353

• GBP/AUD 1.6072

• GBP/NZD 1.9983

• GBP/CAD 1.6303

• GBP/ZAR 11.826

• GBP/JPY 126.48

• GBP/DKK 8.5584

• GBP/NOK 8.9783

• EUR/USD 1.4229



Market Turmoil continues in US and Europe



This morning stock markets around the world are plummeting, as investor confidence is eroded due to issues in the US and Europe. Following the downgrade of the US Credit Rating, and issues in the Eurozone meaning France's sovereign credit rating is now at risk, markets are very volatile as investors sell the Euro.



The result is a weaker single currency that is cheaper to purchase, and exchange rates are close to a 2 month high. The US Dollar has fared better, and we haven't seen a significant weakening of USD as dollar funded asset positions are liquidated.



Sterling could also be at risk with BoE Inflation report



Sterling could be at risk if the Bank of England cuts its growth forecast in its quarterly inflation report due on Wednesday. UK economic data has consistently surprised on signals that it will not raise interest rates within the next year. Although inflation has been stubbornly above the BOE's target range, the central bank is not going to push up interest rates any time soon.



In fact, some in the market are speculating that the BOE may have to resort to more quantitative easing if growth remains sluggish domestically and external risk factors like a stuttering global recovery intensify. If they do, then Sterling will likely also fall, as it's only the fact it's the best of a bad bunch that has given the Pound some support.



Markets are very volatile, and rates could move for or against you as investors buy or sell a currency on the perceived risk. To ensure you don't lose out, contact us today to discuss our Stop Loss and Limit Orders, which are very useful when exchange rates are so volatile.



Today's Data



Lots of UK data today; Manufacturing Production, Trade balance, Industrial Production and a GDP estimate. We could therefore see significant volatility for Sterling today. There is also an interest rate announcement and press conference by the US Federal Reserve.



If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.