Pound/Euro lower following Greek vote/ECB comments

Thursday 30th June 2011
Good morning. Following the passing of the Greek vote on austerity measures, the Euro has stabilised and this has pushed GBP/EUR rates down. Also comments from the ECB president this morning signal interest rates are going up in the EU next week, this is likely to push exchange rates to buy Euros even lower. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1095
• GBP/USD 1.6091
• GBP/AUD 1.4984
• GBP/NZD 1.9400
• GBP/CAD 1.5556
• GBP/CHF 1.3409
• GBP/ZAR 10.865
• GBP/JPY 129.29
• GBP/DKK 8.2737
• GBP/NOK 8.6317
• EUR/USD 1.4500

Greek vote on Austerity measures strengthens Euro

Yesterday the vote was narrowly won to push through austerity measures in return for financial aid. The package of tax rises and budget cuts worth about 28bn euros over five years, had been championed by Greek Prime Minister George Papandreou.

If it had been rejected, Greece could have run out of money within weeks. The EU and the International Monetary Fund have demanded that the measures are implemented before they extend further loans to Greece.

The markets have taken the news positively, with markets across Europe soaring yesterday, and the Euro also strengthening, making it more expensive to purchase and pushing GBP/EUR down.

ECB comments - rate rise expected next Thursday

Jean Claude Trichet, the president of the European Central Bank this morning has said 'strong vigilance' is needed on inflation. This is his code word for saying interest rates will rise, and so we now expect this to happen next Thursday. An interest rate rise strengthens a currency due to the higher return, and the comments have pushed GBP/EUR even lower this morning.

Should you buy Euros now or should you wait?

It's always impossible to predict what will happen to exchange rates, however with poor UK data showing the economy is struggling it's not likely the pound will strengthen in the coming weeks and months. Also with interest rates on the rise in the EU, and optimism following the Greek vote it could easily strengthen the Euro further.

To protect against possible drops in rates, you could consider fixing the rate for your Euros now with a Forward contract, even if you don't need the currency for some time. Contact us today to find out more about how these contracts work.

Today's Data

Unemployment data from Germany today is the main release from the Eurozone. The UK has little data out today, however there is a credit conditions report from the BoE. This studies the risk attitude towards UK banks, and can indicate economic growth (or lack thereof!). We also have jobless figures from the USA and Gross Domestic Product from Canada.

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.

Sterling down against EUR & USD

Tuesday 28th June 2011
Good morning. Sterling has dropped to a 5 month low vs the US Dollar, after the US currency strengthened on it's safe haven status, following renewed concerns over the EU debt crisis. Sterling is also likely to remain under pressure in the coming weeks as the BoE consider further Quantitative Easing. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1172


• GBP/USD 1.5976


• GBP/AUD 1.5254


• GBP/NZD 1.9802


• GBP/CAD 1.5744


• GBP/CHF 1.3328


• GBP/ZAR 10.944


• GBP/JPY 129.10


• GBP/DKK 8.3310


• GBP/NOK 8.7510


• EUR/USD 1.4303

Pound down against Euro and US Dollar

As stated above, the US Dollar has strengthened on it's safe haven status, pushing rates to a 5 month low. Against the euro, sterling also lost ground with the common currency lifted by a bout of short-covering and signs of progress on a scheme to make private bondholders share the burden of any Greek debt solution.

Despite this, euro zone peripheral bond yield spreads widened and kept investors edgy ahead of Tuesday's Greek parliamentary vote on new austerity measures that are a pre-condition for new bailout funds.

Sterling weak due to interest rates and possible Quantitative Easing

Investors have steadily pared back expectations of a rate hike by the Bank of England due to a run of dismal economic data. The BoE's dovish stance, outlined in policy meeting minutes published last week, contrasts with the position of the European Central Bank, which is thought likely to hike in July.

Money markets are not pricing in a BoE rate rise until July or August 2012, a marked change from the start of the year when they were pricing in at least three quarter-percentage-point rate hikes by end-2011.

Today's Data

Gross Domestic Product is the main UK release today, which is a broad measure of economic activity. From the Eurozone we have the Consumer Price Index from Germany. This is an inflationary measure and if high could increase the chance of an EU rate hike, pushing GBP/EUR lower. Consumer Confidence from the USA is the major release from across the pond.

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.

Sterling recovers against Euro/Interest Rates today

9th June 2011
Good morning. Yesterday Sterling fell on rumours that Moody's would downgrade the UK's credit rating. However these comments have now been downplayed and Sterling has recovered slightly. Today we have interest rate decisions for the UK and EU. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1234


• GBP/USD 1.6444


• GBP/AUD 1.5506


• GBP/NZD 2.0010


• GBP/CAD 1.6083


• GBP/CHF 1.3762


• GBP/ZAR 10.980


• GBP/JPY 131.76


• GBP/DKK 8.3773


• GBP/NOK 8.8377


• EUR/USD 1.4634

Moody's Comments downplayed

Yesterday a media report had quoted a Moody's analyst saying the UK was at risk of losing its good credit rating. This caused Sterling to fall significantly against other currencies. However as it was not an official announcement, as I said in yesterdays post, the losses were short lived.

They have said that the outlook for the UK remains stable, however did also say that weaker growth in the UK could lead to a reassessment.

Interest Rate decisions today

Both the UK and EU announce their interest rate decisions at 12:00pm and 12:45pm respectively. We don't expect any change from either central bank.

However, the ECB will hold a press conference after the decision, and it's expected that this will be quite hawkish. We do expect the ECB to raise rates next month, and if the comments in the press conference support this, then the Euro could strengthen and GBP/EUR rates could fall.

If you need to buy Euros, you may wish to consider fixing a rate before this, as there is a good chance rates could drop for the reasons above.

Make a free enquiry with us now to find out more.

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.

Sterling lower on Interest Rates/GDP figures today

29th March 2011 Good morning. Sterling is lower this morning as we'll see in a moment. Markets are awaiting UK GDP figures at 09:30am which may well cause a significant change in Sterling exchange rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1329


• GBP/USD 1.6015


• GBP/AUD 1.5612


• GBP/NZD 2.1277


• GBP/CAD 1.5603


• GBP/CHF 1.4643


• GBP/ZAR 10.968


• GBP/JPY 130.75


• GBP/HUF 302.77


• GBP/NOK 8.9436


• EUR/USD 1.4131

Sterling lower on interest rate expectations; GDP today

The pound fell broadly yesterday and again this morning, hitting a 5 month low versus the Euro and a 2 month low against the dollar. This was mainly due to a pullback in expectations on how soon interest rates may rise given a still fragile economy.

Sterling's falls have come as weak UK data raised concerns that poor economic growth could push back the timing of interest rate rises from the Bank of England. At the same time, investors expect euro zone interest rates to rise in April, a view that was pushing the euro higher.

This morning at 09:30am we will see the latest GDP figures. The Gross Domestic Product released by the office of National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity.

We expect the monthly figure to be -0.6% and the annual figure to be 1.5%. If the numbers are lower than this, then expect a sharp fall in Sterling exchange rates. Given the poor run of economic data of late we are expecting falls today.

If you need to buy Euros then consider either fixing a rate before this, or placing a Stop Loss order. this works by placing a lower level e.g. €1.11, and if rates should drop below this we will automatically secure your currency. This allows you to aim for a higher rate, but have a safety net in place should things not move your way.

Today's Data

Today is important for UK data, with GDP figures at 09:30am. We also have Mortgage approval figures and Money Supply data, so we expect some volatility for Sterling today. We also have some confidence measures from Germany and the USA today.

Keeping track of rate movements

Here on the blog, I give a brief market update at 08:30am with a snapshot of where rates stand. Throughout the day I also update our twitter page with currency rate updates, and important news that's affecting rates. It's a good way of keeping track of things throughout the day.

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.

Sterling falls to 5 month low vs Euro

8th March 2011
Good morning. Sterling fell against the Euro and US Dollar yesterday, mostly on continued speculation the EU will be raising interest rates soon, giving the single currency strength and making it more expensive to purchase. Today we'll look at Sterling, Euro, and US Dollar in details. First, at 08:30am this morning rates are as follows:

• GBP/EUR 1.1615
• GBP/USD 1.6185
• GBP/AUD 1.6000
• GBP/NZD 2.1858
• GBP/CAD 1.5745
• GBP/CHF 1.5123
• GBP/ZAR 11.092
• GBP/JPY 133.42
• GBP/NOK 9.0313
• GBP/HUF 314.15
• EUR/USD 1.3930

Sterling

Sterling has rallied since the start of the year on speculation the Bank of England will raise rates by at some point this year. A weak reading of the UK services sector last week prompted some investors to pare back those expectations which halted Sterlings upward trend.

Trichet's surprise announcement on Thursday has cranked up expectations of an ECB rate rise in April, and analysts said this would also keep the euro stronger than sterling. Some analysts have said upcoming gilt redemptions put the pound at some risk of selling as it could spark some repatriation flows away from the UK currency.

Euro

The euro was supported against sterling, as investors stuck to their view that euro zone rates will soon rise, after European Central Bank President Jean-Claude Trichet reiterated the need to avoid second-round inflation effects. The news last week has caused GBP/EUR rates to fall quite dramatically, and further comments or data from the EU that supports this view, will likely cause further falls in the exchange rate.

US Dollar

We have retreated back from the 13 month high above $1.63, however rates are still above $1.60. Oil prices fell yesterday and this has given the US Dollar some strength causing rates to drop back away.

Today's Data

UK data starts in earnest in the shape of UK House prices and Retail Sales data. These will give an idea of how the UK economy is performing and so could affect Sterling. Late morning we have Factory orders from Germany. In the afternoon US housing data and economic confidence measures are released.

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.