Foreign Exchange Rate Outlook

Pound/Euro gains February 2012 Forecast Predictions

2012-02-01T06:45:00.000Z

Wednesday 1st February 2012
Good morning. The Pound surged through trading yesterday afternoon, rising to a 2.5 month high against the US Dollar, and rising close to an 18 month high above €1.20 against the Euro. This was all due to hopes that Greece will reach a deal with its private creditors this week. The Below charts show how rates moved throughout the day yesterday

~Currency Movements on Monday 30th January 2012~

Pound makes significant gains against Euro

As the charts above clearly illustrate, Sterling had a great run agains the Euro yesterday, gaining by over 1%. Look at it go! It was due to hopes a deal to help Greece is imminent. Greek Prime Minister Lucas Papademos said negotiators had made significant progress in debt restructuring talks, sparking optimism the country may avoid a chaotic default.

This buoyed sentiment towards the euro and lifted riskier assets and currencies, including sterling. As a result, the Pound gained against both the Euro and US Dollar. This is because the Pound is seen as a risky asset, so the increased confidence strengthened the Pound. However, despite the gains, there is much in the next week or two that could reverse Sterling's fortunes.

Analysts still predicting Sterling will fall

Despite the jumps in the GBP/EUR and GBP/USD exchange rates, the Pound could come under pressure later this week, with purchasing managers' surveys on manufacturing, construction and services likely to give further evidence of the fragility of the UK economy.

Indeed, data yesterday highlighted the sharp declines in money supply and consumer credit, however the negative data had little effect on sterling. It does however increase the chance of further Quantitative Easing next week at the BoE's meeting on Thursday. Many in the market expect the Bank of England will announce another round of quantitative easing under its asset purchasing programme in February in an attempt to boost the economy.

The last time QE was announced Sterling fell across the board. It's difficult to forecast what effect it may have however. As it is being widely predicted, it will be partly priced in to the market rates already, however I expect further drops for the Pound should the BoE indeed go ahead with further QE.

What you should do if you need best Euro exchange rates

With the mid market rate again over the €1.20 mark, it represents the best buying levels for close to 18 months. With the risk of QE pulling the Pound back down, there are a few options you have if you need to buy Euros in the next 6 months.

You could fix the rate now on a Forward contract, so you lock in today's rates for up to 2 years and are protected against a fall in rates. You would need to lodge 10% of the total you want to convert as a deposit, with the remaining 90% due when you want the Euros transferrred. While protecting against downward movements in the rate, it does not allow you to take adcantage of any subsequent gains.

If you wanted to gamble on rates getting even higher, consider a Stop Loss. This is where you place an order for me to buy currency should it fall below a pre agreed level. In this way you can aim for higher, but have a worst case scenario should rates fall.

It should be noted that this is the 5th time rates have broken €1.20 in the last few years, and each and every time the spike is short lived, to be followed by a correction lower. If it were me needing Euros in the next 6 months, I would fix the rate as soon as possible, considering back in October it was €1.13.

If you need to buy Euros and want the best exchange rates, contact me now.

Today's Data

We’ll start down under today – Australia has Building permits, Commodity prices and Trade Balance figures – if good this could push GBP/AUD even lower than it already is. The UK releases its PPI data this morning also.

In the Eurozone there are also inflation figures. In the USA there are some important releases – Jobless Claims, Labour costs and Nonfarm productivity.

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.

Greek debt worries weaken Euro. Again.

2012-01-31T06:40:00.000Z

Tuesday 31st January 2012
Good morning. There were no UK data releases of note yesterday, so yet again exchange rates were driven by events in the Eurozone. Sterling gained against a broadly weaker euro ahead of an EU summit in Brussels, with investors cautious as talks continued between Greece and private creditors on a debt swap deal. This pushed GBP/EUR rates higher, but not by much and rates remain under €1.20. Against the US Dollar, the Pound fell slightly as the weaker Euro drove investment to the safe haven US Dollar.

~Currency Movements on Monday 30th January 2012~

Pound gains vs Weaker Euro

European Union leaders yesterday had a meeting to discuss a deal introducing a permanent bailout fund for the euro zone, the European Stability Mechanism (ESM), and finalise a fiscal compact that will introduce a balanced budget rule in national legislation.

However, this was overshadowed by negotiations on a debt swap deal in Greece, which has weakened the Euro slightly and pushed GBP/EUR rates higher. Greece must reach a deal with its creditors to receive a second rescue package and avoid a disorderly default.

In the absence of any significant UK economic data releases, this drove the market yesterday.

Pound gains against US Dollar

As regular readers will be all too aware by now, when there are times of economic uncertainty such as those currently faced by the Eurozone, the US Dollar tends to gain strength due to it's safe haven status. Indeed this is what we saw yesterday, with the Pound losing ground against the Greenback, however we are only just below the recent 5 week high, and significantly above the recent 18 month low.

Today sees inflation data and consumer confidence measures for the states. Neither of these are likely to be very positive, so this could stop the Dollar gaining significant strength.

Pound to weaken as we get closer to QE?

Many market analysts, me included, expect the Bank of England will increase asset purchases under its quantitative easing programme in February. That is likely to weigh on sterling, although comments by BoE policymaker David Miles on Friday dampened the prospect.

Data releases this week for the UK will be watched very closely, as it is these that will influence whether the BoE indeed decide to opt for further stimulus next week.

Today's Data

Starting in the UK we have Consumer Credit, Mortgage Approvals and Net Lending. Of more importance will be the EU unemployment figures released at 10am. In the afternoon we see Canadian GDP and Industrial Prices, and in the USA we see inflation data and a measure of consumer confidence.

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.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2012-01-30T06:45:00.000Z

Monday 30th January 2012
Good morning. Another Monday, so let's start the week with a full breakdown of the last weeks movements in the currency markets.

In this week’s Report:

• Pound/Euro hits 4 week low
• Sterling/Dollar rises to 5 week high
• UK headed back to recession, more QE on the way
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

Last week saw the volatility continue in the currency markets as Sterling dropped to a 4 week low against the Euro. With the UK economy shrinking by 0.2% in the last quarter of 2011 and poor UK retail data being released, Sterling fell away from the €1.20 highs we have seen over the last few weeks. One of the only positives for the UK was the news from the BoE (Bank of England) that all 9 members had voted against more QE which lent some valuable to support to the pound. There were also some positive sounds coming from Greece as leaders met Private Creditors to look at reducing Greece’s rising debt levels.

Official Figures released last week showed that the UK economic activity shrank by 0.2% in the last three months of 2011 compared to the 0.6% increase we saw at the end of the third quarter. Chancellor, George Osborne, said the figures were disappointing but not a surprise. "They are not entirely unexpected because of what's happening in the world and what's happening in the Eurozone crisis," he said. "The truth is that dealing with those problems is made more difficult by the situation in the Eurozone."

Retail sales fell in January as shoppers reined in their spending at the start of the year, the CBI says. Its monthly survey found 44% of retailers said sales volumes were down on a year ago. Ian McCafferty, the CBI's chief economic adviser, said: "Shoppers have reined in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales.” He added that poor sales were likely to lead to further falls in the rate of inflation.

Key talks between Athens and its private creditors took place last week as they try to agree a debt write-off that would dramatically reduce Greece's debt levels. If an agreement can be reached, Greece is in line to receive 130bn euros in additional bailout funds. Without the latest bailout package Greece would struggle to repay 14.5bn euros of loan repayments that are due in March. The agreement would see Greece's debts dramatically reduced by half to its private creditors.

With the GBP/EUR rate falling this week we have seen a rise in the number of stop losses placed with our brokers and banks. This is where clients look to protect themselves against any adverse exchange rate movements. E.g. you can place a Stop Loss order to buy your Euros should they drop below a pre agreed level - for example €1.15. In this way you can continue to take advantage of gains in the rate, but have a ‘worst case scenario’ should the market move against you. To put this into prospective if you did not have a stop lose in place and the rate dropped to where it was just a few months ago, purchasing €200,000 would cost you nearly £10,000 more.

Send me a free enquiry now to find out how much we can save you.

Sterling vs. US Dollar;

Last week saw a complete reversal in Cable’s fortunes after GBPUSD rates went from an 18 month low to a 5 week high. The Pound began gaining against the Dollar as talks of a Greek bailout package put pressure on the Greenback as risk appetite increased, although any gains made were moderated by concerns over another round of Quantitative Easing in the UK. It’s expected that the Bank of England will announce that it will buy billions of Pounds worth of gilts as early as next month.

"Sterling/dollar has been weak in the last month, primarily because of the weakness of the euro but also because of evidence of renewed UK economic weakness," analysts at Lloyds said, adding that the run-up to any announcement of further QE was typically negative for the pound.

Sterling briefly suffered losses against the Dollar midweek as data released showed Britain’s economy contracted in the fourth quarter, shrinking by 0.2%, below the consensus forecast of a 0.1% contraction. Growth for the whole year was just 0.9 percent, less than half the expansion recorded in 2010. The Pound’s losses midweek were only temporary however, as the U.S. currency came under broad selling pressure after the U.S. Federal Reserve announced that it would keep interest rates near zero until late 2014 and may opt for more stimulus.

In light of this, sterling rose to $1.5719 (Interbank), its strongest since Dec. 22.

Although Sterling made gains of around 2% against the Dollar last week, market participants said these gains could be only temporary in nature. "Our view is still that this period of dollar weakness we've seen this year will prove temporary so we're not looking for cable to break back into the $1.60s," said Lee Hardman, currency strategist at BTM-UFJ. "Maybe the market is getting ahead of itself in terms of anticipating QE3, that does create some scope for disappointment which could help the dollar regain some lost ground in the coming month," he added.

To put last week’s gains into perspective, a typical purchase of $400,000 would have cost around £3010 less on Friday than if it had been bought on Monday. To take advantage of the recent gains, contact your dedicated account manager at Foremost Currency and take the first step to making the most of your currency.

If you need to buy or sell US Dollar, send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – There are no UK releases of note today. In the EU however we have German Inflation Data (which can impact interest rates) and Retail Sales (which reflect consumer confidence). In the USA we see Personal Consumption & Personal Income data.

Tuesday – Starting in the UK we have Consumer Credit, Mortgage Approvals and Net Lending. Of more importance will be the EU unemployment figures released at 10am. In the afternoon we see Canadian GDP and Industrial Prices, and in the USA we see inflation data and a measure of consumer confidence.

Wednesday – Today Nationwide releases its house price data for the UK, which reflect the national economy as a whole. In the EU there are various releases of inflation for both Germany and the EU as a whole. In the states there are Mortgage Approvals, Manufacturing data, Employment Numbers and Car Sales data.

Thursday – We’ll start down under today – Australia has Building permits, Commodity prices and Trade Balance figures – if good this could push GBP/AUD even lower than it already is. The UK releases its PPI data this morning also. In the Eurozone there are also inflation figures. In the USA there are some important releases – Jobless Claims, Labour costs and Nonfarm productivity.

Friday – We end the week with more UK House price info, this time from the Halifax. There are also further inflation numbers to add to those released earlier in the week. The Eurozone also has further inflation numbers and Retail Sales. Across the pond, we have Non-Farm Payrolls and Unemployment data – both of which often affect GBP/USD rates.

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 falls again on Poor UK data/Optimism on Greece

2012-01-27T06:55:00.000Z

Friday 27th January 2012
Good morning. Sterling dropped yesterday to a 4 week low against the Euro on poor UK Retail Data, and hopes of progress in Greek debt talks bolstering the single currency. Against the US Dollar however, Sterling hit a 5 week high after a host of Economic data including Unemployment was much worse than expected, weakening the USD and making it cheaper to purchase. It's these points I'll cover today after the usual snapshot of yesterdays movements:

~Currency Movements on Thursday 26th January~

UK Data disappoints, weakening the Pound

Yesterdays UK data was the CBI Distributive Trades Survey, which is released by the Confederation of British Industry. It's an indicator of short-term trends in the UK retail and wholesale distribution sector, and can have an impact on the formulation of economic policy at the Bank of England and within Government.

The forecast was for a 12% gain, however the actual figure was a 22% decline. The poor result reversed the gains made on Wednesday, and pushed GBP/EUR rates to a one month low.

Also Reports that private holders of Greek debt would accept a lower coupon on new bonds, and a successful short-term debt auction in Italy, encouraged investors to cut hefty short positions in the euro. In plain English, this means there is now more hope of progress with regards to Greek debt, and as a result the Euro gained some strength, becoming more expensive to purchase and compounding the drop in Pound/Euro rates.

Sterling climbs to 5 week high vs US Dollar

As has been the case for some time, GBP/USD rates have been trading inversely, as the debt crisis drives flows of investment into and out of the US Dollar. So as a result of the better outlook in the EU, the Dollar has weakened off slightly.

Of more importance was yesterdays economic data from the states. There were various measures of Jobless Claims and Homes Sales from the USA yesterday, and all of them were worse than forecast. This also weakened the US Dollar slightly. In the last week GBP/USD had hit an 18 month low, so the spike to the upside should please anybody that needs to buy Dollars.

Today's Data

We end the week with Consumer Confidence figures for the UK, Money Supply data from the Eurozone, and the USA releases its latest GDP figures in addition to a measure of Consumer Sentiment.

Getting the Best Exchange Rates

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Why not send me a free enquiry now to see how much we can save you.

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.

UK GDP poor, QE in Feb, Pound rises - why?

2012-01-26T06:30:00.000Z

Thursday 26th January 2012
Good morning. Yesterday GDP figures showed the economy contracted by 0.2% in the last quarter, and in the run up to the release Sterling fell across the board. The minutes to the BoE meeting to discuss QE however revealed all 9 members voted not to increase it, and this then lent some support to the Pound. Concerns about the European Central Bank having to write down its Greek bond holdings as part of a deal to avoid a disorderly default also weighed on the single currency, pushing GBP/EUR rates up.

Today we will look at the GDP and BoE release, analyse why it pushed the Pound up, and take a look at how QE in February may affect Sterling exchange rates. Below you can see the drop in the run up to the data release at 09:30am, and then the recovery after the BoE Minutes:

~Currency Movements on Tuesday 24th January~

UK GDP shows we're headed to recession

UK economic activity shrank by 0.2% in the last three months of last year according to official figures released yesterday, in the form of GDP. The figures, from the Office for National Statistics (ONS), are a preliminary estimate, which could be revised either up or down by 0.2%. The quarterly fall in GDP is the first since the last three months of 2010, when freezing weather was blamed for a 0.5% drop.

The new figure was worse than had been feared, as most economists had pencilled in a 0.1% fall in activity. It also indicates the UK could head back to recession, defined by 2 consecutive quarters of negative growth.

In the run up to the figures, the Pound dropped significantly, as the market was braced for a possible worse figure. When the actual figure was released, it was only 0.1% worse than forecast, and so the effect on exchange rates was limited. In fact Sterling actually rose against the Euro, but this was due to the BoE minutes, which I'll cover in the next paragraph.

Bank of England minutes cause Pound to rise, despite more QE on horizon

Bank of England minutes released yesterday morning showed members voted unanimously to keep total asset purchases at 275 billion pounds. However, the minutes also said a further expansion of asset purchasing was "likely" to be required. The fact that no BoE policymakers voted for an increase in QE this month is what caused the Pound to rise after the release.

Many clients were surprised the GBP/EUR rate rose despite worse GDP, but it's because nobody voted for QE, signalling it's not quite the certainty that it was. Analysts still think it will happen in February however, and as this has already been widely predicted, the Pound actually gathered a little support.

"If they are saying "likely" in the minutes that pretty much means definitely. That's a pretty strong word from the MPC who would normally sit on the fence," said Lee McDarby, head of corporate dealing at Investec Bank PLC.

Although the last round of QE in October did not weigh significantly on sterling, traders said the need for further economic stimulus added to a shaky outlook for the pound.

Concerns about the European Central Bank having to write down its Greek bond holdings as part of a deal to avoid a disorderly default also weighed on the single currency, pushing GBP/EUR rates up.

Today's Data

Today Germany releases its latest consumer confidence measures. In the USA there is a host of data including Jobless Claims & New Home Sales. New Zealand releases Trade Balance figures in the evening.

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.

UK GDP and BoE minutes effect on Sterling

2012-01-25T06:45:00.000Z

Wednesday 25th January 2011
Good morning. The Pound briefly hit a 4 week low vs the Euro yesterday, before recovering to around €1.20. Sterling also rose against the US Dollar, despite many in the markets predicting today could well generate weakness for the Pound. At 09:30 am today we will see the latest GDP figures, and the minutes to the most recent Bank of England (BoE) minutes - both of which could cause significant volatility for Sterling. We'll focus on this today, after the usual snapshot of yesterdays movements:

~Currency Movements on Tuesday 24th January~

BoE Minutes and GDP - Important day for the Pound

Today at 09:30 we will see 2 important UK data releases that will have an impact on the future of Sterling. GDP figures are released which will show if the economy is growing or not, and at what pace. It's a measure of the total value of all goods and services produced by the UK, and is considered as a broad measure of the UK economic activity.

We predict that the monthly figure will show a -0.1% contraction. 2 consecutive periods of contraction mean we're officially back in recession, so if the number is indeed negative it could weaken the Pound. If it's zero or above, expect the Pound to make modest gains.

We also have the BoE minutes released at the same time. This shows the discussions and voting in the decision 2 weeks ago to hold interest rates and Quantitative Easing. If it shows they discussed QE, or the discussions hint it's on the way in February, expect weakness in the Pound.

What effect could this have on exchange rates?

Analysts said upcoming British data and events could add to concerns about the prospect of more quantitative easing as austerity measures and the impact of the euro zone debt crisis hurt the economy, potentially weighing further on sterling.

BoE policymaker Adam Posen said on Monday Britain's economic outlook had improved slightly but more quantitative easing would probably still be needed, so for the most part it could be that this is already priced in to rates. markets move as much (sometimes more so) on rumour than fact, so as it's widely predicted, it's difficult to predict what effect this might have on exchange rates.

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Pound falls against Euro, rises against US Dollar

2012-01-24T06:45:00.000Z

Tuesday 24th January 2012
Good morning. Yesterday Sterling fell against the Euro by around 0.7%, pushing rates down to the mid 1.19's. Against the US Dollar, the Pound rose by around 0.5%, as the Dollar weakened on predictions it's interest rates will stay at record lows for some time to come. The below chart illustrates how exchange rates fared throughout trading yesterday:

~Currency Movements on Monday 23rd January~

Pound rises vs US Dollar

As you can see, rates steadily rose to buy the Dollar yesterday, although many investors were cautious about pushing the pound up further on growing concerns the Bank of England will have to inject further cash into the fragile UK economy. Expectations that the U.S. Federal Reserve will keep interest rates low for some years to come helped to weaken the US Dollar and made it cheaper to purchase.

Sterling falls against Euro

The Pound did not fare as well against the single currency. The Eurozone crisis has not escalated any further since last week, and the lack of any further bad news has taken the focus off the Euro, helping it to recover some strength. As a result exchange rates have fallen away from the 18 month high we recently saw.

Poor UK GDP and possible Quantitative Easing hurts Sterling

This week we will see UK GDP figures, to show the economy contracted, a factor that is likely to undermine sterling in the short to medium term. Bank of England Governor Mervyn King is also due to speak this week while the minutes from the most recent BoE Monetary Policy Committee meeting on Wednesday are all likely to reinforce expectations for further asset purchases.

It's now widely predicted that the BoE will pump further money into the economy in February, unless data released in the meantime suggests the economy is growing, which is unlikely. For these reasons it could well be that the Pound continues to drop against the Euro, while any resolution to the EU debt crisis could cause the USD to weaken, pushing rates back towards the $1.60 levels.

Today's Data

Today is a little busier, with figures showing the latest UK Public Sector borrowing. In the Eurozone there are some inflation measures, and data showing Industrial New Orders. Across the pond we will see US Manufacturing data, and Canada releases Retail Sales which show how confident consumers are about the economy.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2012-01-23T06:30:00.000Z

Monday 23rd January 2012
Good morning. As always for a Monday, today I will take a retrospective look at last weeks movements in the currency markets, and what this week may hold for the Pound Sterling Forecast against the Euro & US Dollar. Also included is a list of the most important data to watch our for that might affect rates this week.

In this week’s Report:

• Pound/Euro remains range bound at €1.20

• Sterling recovers against weaker US Dollar

• BoE Minutes could signal further QE in February

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

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

Sterling vs. Euro;

The start of the last week saw GBP/EUR rates trading around the 1.20 (Interbank) level as all eyes were still on the Euro zone. High UK unemployment figures and the hint of more Quantitative Easing could see a very volatile week ahead of us.

Tuesday’s key data showed a rise in unemployment within the UK and indicated that it had increased steadily through 2011. The number of Britons out of work hit its highest level in more than 17 years, but a much smaller than expected number of new benefit claims in December provided some hope that the labour market downturn may be levelling out.

With the UK government cutting hundreds of thousands of jobs as part of its five-year budget deficit reduction programme, unemployment is expected to keep rising. The private sector is picking up only some of the slack. "While the increase in headline unemployment this month is a negative sign, the strength of the claimant count measure provides evidence of some resilience in the labour market," said economists at Credit Suisse.

As the cost of living has continued to rise at more than twice the rate of underlying wage growth in the UK more pressure is put on households, hindering and slowing economic growth. The Nationwide have predicted that slowing inflation would help to ease the squeeze on household budgets and aid growth.

BOE minutes this week leave the door open on whether more Quantitative Easing will take place and what was and will be discussed in subsequent meetings. The last time QE was announced Sterling fell significantly and exchange rates dropped across the board. Due to the prediction of QE, it will be partly priced into the market prices already, and the EU debt crisis will also have an impact on the value of the Euro, Pound and US Dollar.

Do you need to buy or sell Euros? Click here to send me a free enquiry

Sterling vs. US Dollar;

The Pound started last week close to an 18-month low against the US dollar with the news that a handful of countries in the Eurozone had their credit ratings downgraded several days previously.

Britain’s economy has remained fairly stagnant over the past five months. A survey showed UK consumer confidence dropped close to its lowest level in seven years in December, adding to worries about a fragile UK economy. Recent weak UK data, including lower inflation numbers, have added to expectations the BoE will increase asset purchases under its quantitative easing programme next month. Caution will persist until news emerges from Greece, where the government and private bondholders are locked in negotiations about the size of any haircut on Greek debt.

This is the main reason that the dollar is so strong against the pound and the rates are sitting where they are. As stated above rates to buy Dollars are currently around an 18 month low, as the US currency appears very strong at the moment. This is nothing to do with any positive US economic data - it's simply the case that the USD is a safe haven currency, and with all the well-publicised problems in Europe and the UK, it's an attractive option at the moment.

The Pound pushed a little higher against the US Dollar at the end of the week, with gains after solid demand at a Spanish debt auction. Spain sold 6.61 billion euros of government bonds which was more than its announced target, in an auction that analysts said went well. This caused flows away from the US Dollar, weakening it and pushing rates up slightly, as the chart above shows.

US jobless claims released at the end of last week dropped to a new four-year low, which slightly dented the greenback’s safe-haven status and boosted the pound. The rates ended the week around 1.5520 on the interbank. This is a swing of around 1.5% throughout the week; meaning that you’re currency would have cost significantly more had you bought on Monday, instead of Friday. It is important to keep in touch with your account manager at the FCG so that they can give you the benefit of their experience and help you make the most of your currency.

Do you need to buy or sell US Dollars? Click here to send me a free enquiry.

Weekly Economic Data that may affect exchange rates

Monday – We have a very quiet start to the week, with no UK data of note. The only EU release is a measure of consumer confidence at 3pm. The other data is from Australia where we will see the latest measure of inflation.

Tuesday – Today is a little busier, with figures showing the latest UK Public Sector borrowing. In the Eurozone there are some inflation measures, and data showing Industrial New Orders. Across the pond we will see US Manufacturing data, and Canada releases Retail Sales which show how confident consumers are about the economy.

Wednesday – This will be the most important day of the week for Data. At 09:30am we will see the latest BoE minutes from their recent decision to hold rates and QE. These will show what was discussed, and who voted for what. Should this indicate further QE is likely next month Sterling could be affected. At the same time, UK GDP figures are released, which will show if the economy is growing, and at what pace. We also have the FOMC minutes from the USA, followed by an interest rate decision in both the USA and New Zealand.

Thursday – Today Germany releases its latest consumer confidence measures. In the USA there is a host of data including Jobless Claims & New Home Sales. New Zealand releases Trade Balance figures in the evening.

Friday – We end the week with Consumer Confidence figures for the UK, Money Supply data from the Eurozone, and the USA releases its latest GDP figures in addition to a measure of Consumer Sentiment.

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.

Getting the best exchange rates for your currency

2012-01-20T06:30:00.000Z

Friday 20th January 2012
Good morning. The Pound pushed a little higher against the Euro and US Dollar yesterday, tracking gains in the euro versus the dollar after solid demand at a Spanish debt auction, but its rise was limited by weak consumer confidence data that added to concerns about the UK economy. Below shows how GBP/EUR and GBP/USD moved yesterday:

~Currency Movements on Wednesday 18th January~

Good Demand at Spanish Bond Auction

At a bond auction yesterday, Spain sold 6.61 billion euros of government bonds which was more than its announced target, in an auction that analysts said went well. This caused the Pound to rise also due to it's links to the Eurozone, so despite some slight gains as shown by the chart, rates remain stuck around the €1.19 to €1.20 level. Analysts have said that the Euro's gains were likely to be limited as investors remain wary of any development that may cause the euro debt crisis to worsen significantly, with market players keeping a close watch on talks aimed at avoiding a messy Greek default.

For this reason, rates to buy and sell Euros remain around the €1.20 level where it has been for much of the week.

The news weakened the safe haven US Dollar slightly, making it cheaper to buy and pulling exchange rates up from the near 18 month low seen earlier in the week.

UK Data disappoints again, signalling more QE on the way

UK consumer confidence fell to pretty close to its lowest level in seven years last month, data showed yesterday. This has increased concerns over the fragile economy, and increases the risk of further Quantitative Easing next month. The last time QE was announced, Sterling fell significantly and exchange rates dropped across the board.

Of course due to the prediction of QE, it will be partly priced into the market prices already, and the EU debt crisis will also have an impact on the value of the Euro, Pound and US Dollar.

This is the latest is a run of poor economic data from the UK recently. Low inflation, and the number of Britons out of work at its highest in more than 17 years in November are all weighing on the Pound. UK GDP figures for the fourth quarter of 2011 are due next week, with some market players bracing themselves for very low growth or even a contraction in the economy.

Today's Data

Today’s UK release is Retail Sales; a good indicator of general consumer confidence. In Canada we will see the latest inflation figures. US data comprises Home Sales.

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Mixed day for Sterling as Unemployment/IMF drive markets

2012-01-19T06:45:00.000Z

Thursday 19th January 2012
Good morning. It was a mixed day in the currency markets yesterday. Initially poor UK unemployment pushed Sterling lower against the Euro. However, as reports suggested the International Monetary Fund was proposing to boost its lending resources, this supported the euro and riskier currencies, pushing the Pound up later in the day. Below shows how GBP/EUR and GBP/USD moved yesterday:

~Currency Movements on Wednesday 18th January~

UK Unemployment figures disappoint

Figures released yesterday show that UK unemployment rose by 118,000 in the three months to November to 2.685 million. The Office for National Statistics (ONS) said the unemployment rate also rose to 8.4% from 8.3%, the highest since January 1996.

The numbers were slightly lower than analysts had forecast, and support the picture of a flat UK economy, with other data released on Wednesday showing average weekly earnings, including bonuses, grew at just 1.9%.

This pushed Sterling lower against other currencies as the Pound weakened.

IMF Bailout strengthens the Pound

Also yesterday, Bloomberg News reported that the IMF was planning a large expansion in its lending pool to safeguard the global economy against the worsening euro zone debt crisis. This supported riskier currencies, and caused both the Pound and the Euro to gain against other currencies. Also helping the Euro was a report that Italy was unlikely to default.

This was the main driver in exchange rates yesterday. The news meant investors were a little more confident in the Eurozone, and this caused the Dollar to weaken as money was moved away from the safe haven Dollar.

The net effect was Sterling/Dollar rates climbing, and Sterling/Euro rates climbing slightly. Euro rates didn't go up as much due to a strengthening of the Euro.

Emigrating to Australia?

Australia remains the top destinations for Brits emigrating abroad. Unfortunately the Aussie Dollar has been getting stronger and stronger in recent years, becoming more expensive to purchase. This is because they largely avoided the global recession and retain high interest rates relative to other countries.

Rates yesterday hit a new low, with rates briefly at their lowest in over 20 years. While this is not good news for anyone who has recently emigrated down under, those looking to bring AUD back to Sterling have not had it so good in a long time. Regardless if you need to buy or sell this currency, contact us today to discuss how we can protect you against rates moving against you.

Today's Data

Unusually for a Thursday, there is no UK data being released. The ECB will give a monthly report on the health of the EU economy, and Australia releases various measures of unemployment. Most data today is US based however; Inflation Data, Jobless Claims, Building Permits, and Manufacturing data.

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.

Increased chance of QE pushes Sterling lower

2012-01-18T06:25:00.001Z

Wednesday 18th January 2012
Good morning. Yesterday UK inflation figures increased the chance of further Quantitative Easing next month, pushing Sterling lower against other currencies. The Euro also strengthened a little earlier in the day after better than expected German data, however ongoing concern about sovereign debt limited the drop, with rates for Euros ending up where they started the day! Today we have various unemployment measure for the UK, which will likely have the biggest impact on rates. Below shows how GBP/EUR and GBP/USD moved yesterday:

~Currency Movements on Tuesday 17th January~

UK Inflation data increases chance of Quantitative Easing

Data released yesterday showed that UK inflation fell sharply in December, with the annual CPI rate dropping to 4.2 percent from 4.8 percent in November, supporting the Bank of England's view that consumer price inflation may have peaked. This lower than expected reading is likely to increase the chances that the Bank of England will embark on another round of Quantitative Easing next month.

Clear evidence of falling prices is a precondition for some BoE policymakers to back QE expansion, and so the numbers have caused the Pound to fall. Further data this week such as today's unemployment figures could add to the case, which may bring Pound/Euro prices down from the current highs.

So if UK data continues to disappoint, will GBP/EUR rates fall?

Investors are also mindful of UK economic weakness, with recent data pointing to a high risk of recession. There are lots of other key data releases coming in the next few weeks, and if they are poor it could weigh more heavily on sterling, which late last year was largely immune to UK worries as investors sought alternatives to euro zone assets.

Now however, with the EU debt crisis ongoing, focus is starting to return to core UK economic performance, which is poor at best and this could bring rates back down.

What about the US Dollar?

Rates to buy Dollars are currently at an 18 month low, as the US currency is very strong at the moment. This is nothing to do with any positive US economic data - it's simply the case that the USD is a safe haven currency, and with all the well publicised problems in Europe, it's an attractive option at the moment. Simple supply and demand dictates with the world wanting the safety of the dollar, it's becoming more and more expensive to purchase.

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Today's Data

Today's most important release will be unemployment numbers for the UK which will show the number of people out of work and claiming benefits. In Europe, there are some figures showing construction output. In the states we’ll see Inflation data, Industrial production, and the Housing Market index.

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 supported against Euro

2012-01-17T06:45:00.000Z

Tuesday 17th January 2012
Good morning. It was a very flat day on the markets yesterday, despite the downgrade of EU countries over the weekend by S&P. Pound Euro remained range bound just below a 16 month high, and Sterling Dollar remained around an 18 month low. This is all due to the EU debt crisis, with the downgrade keeping the Euro weak and the Dollar strong. The charts below show how rates moved throughout the day yesterday :-

~Currency Movements on Monday 16th January~

Eurozone credit rating downgrades

As you can see, there was little movement at all, and through the whole day the cost of €100k only varied by around £150. Very very quiet indeed compared to what we have been used to of late, however there is much happening this week that could change things.

Ratings agency Standard & Poor's last week downgraded the credit rating of nine euro zone countries including France and Austria after the close of London markets, however the rumours had been circulating all day, and as such there wasn't a huge reaction in the currency markets. The Euro had already weakened on the rumour, and as the news came when markets were closed there was little effect on exchange rates.

The news came as negotiations between Greece and private creditors on a debt swap deal broke down, raising the risk of a messy Greek default. What the downgrades do show however, is that global investors are now wary over investing in the Eurozone, and instead look for the safe haven US Dollar. The net effect is a weaker Euro (and therefore higher GBP/EUR rates) and a strong US Dollar (and therefore lower GBP/USD rates).

Sterling Euro is still very close to a 16 month high, however Sterling/US Dollar is near an 18 month low. Germany has retained its AAA credit rating, as the UK does. In the short-to-medium term the UK may benefit a little bit from being a triple-A rated sovereign but I think that will be called into question during 2012 as well, especially if we see further Quantitative Easing in February.

UK also affected by Eurozone debt crisis

It's important to remember that bad news for Europe doesn't automatically mean higher GBP/EUR rates. The UK is intrinsically tied into what happens in Europe. Indeed Sterling has benefited from safe-haven flows as investors that don't want to be exposed to EU debt bought UK gilts instead. The yield on British 10-year gilts fell to within a whisker of a new record low on Monday after the S&P downgrade reduced the pool of European triple-A rated sovereigns. This on it's own shows that there is some safe haven demand for the Pound.

However, some strategists said the fact that Germany, the euro zone's largest economy, was not downgraded could prompt some of those flows to be diverted into Bunds and remove a pillar of support for the pound. Overall, market players said more instability in the euro zone, the UK's largest trading partner, could spell trouble for sterling.

There were various news stories circulating yesterday predicting UK interest rates will stay low for some years to come, and that the UK is headed back into recession.

Summary - when should you buy/sell your currency?

There is much uncertainty in global markets at the moment. There are some factors that support the case that the Euro will continue to weaken, pushing GBP/EUR higher, however many analysts say the Pound will also weaken.

With so much uncertainty, nobody can predict which way exchange rates may move during 2012. There are however various ways we can help protect you against rates moving the wrong way, and strategies you can employ to help you achieve the best rate.

If you need to convert one currency to another, the amount is £5k+, and you need the funds wired to an account anywhere in the world - contact me now by clicking here. I can provide you with a free consultation on the options available to you, and ensure you make the most of your currency.

Today's Data

There is a host of UK inflation data out at 09:30am, in addition to Retail Price Index measures. The EU also has some inflation numbers, which could affect where interest rates move in February. Staying in the EU, there are various German measures of Economic confidence. Finally, an interest rate decision in Canada rounds off the day.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2012-01-16T06:45:00.000Z

Monday 16th January 2011
Good morning. As always on a Monday morning, today I will give a detailed summary of last weeks movements and the Pound Sterling forecast for Euro and US Dollar, in addition to the weeks data that might affect exchange rates.

In this week’s Report:

• GBP/EUR hits 16 month high before falling back
• BoE and ECB keep interest rates on hold, more UK QE expected in February
• US Dollar remains safe haven due to EU troubles
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

We began last week with Sterling trading close to a 16-month high against the euro as focus remained on the debt and liquidity problems continuing to plague the single currency.

The outlook for the single currency was clouded ahead of Spanish and Italian debt auctions later in the week which were seen as a key test of sentiment. The auctions would gauge investor willingness to invest in the troubled euro zone sovereigns. German magazine Der Spiegel reported the International Monetary Fund was losing confidence in Greece's ability to work off its mountain of debt, while Germany and France also warned Greece it will get no more bailout funds until it agrees with specific conditions and pressed for an early deal to avert a potential default.

Sterling held near the 16-month high for the majority of the week but Thursday saw a reversal in fortunes with it losing a little over 1.5% to a slightly firmer Euro. The BoE held record low interest rates at 0.5% and decided not to add to its Quantitative easing program for the time being providing some relief but analysts and traders alike expect the BoE policymakers to expand the QE program next month in order to aid a flagging economy.

UK industrial production posted a surprise fall month-on-month, increasing expectations that the economy contracted in the final quarter of last year adding to speculation that we are on the brink of another recession.

Over in Europe however the ECB President Mario Draghi was less pessimistic, supporting the Euro and said the supply of cheap money released by the ECB was helping stabilise the Eurozone economy which he expected to recover albeit gradually. The Spanish bond auction saw strong demand and sold larger quantities of its sovereign debt than expected, at a lower price than expected.

There was a slight recovery for Sterling to the end the week as the Italian Bond auction received tepid demand and could not match the Spanish auction the previous day. There were also rumours S&P would be imminently downgrading several EU countries, however at the time of writing this had not happened. This further reinforced the volatile outlook for the currency pair and if you have an impending currency requirement the best way to navigate the violent swings in the exchange rate is to keep in close contact with your FCG account manager.

If you need to buy or sell Euros, send us a free enquiry now.

Sterling vs. US Dollar;

The Pound was relatively unchanged against the Dollar last week, trading within a range of just over 1 percent. The lack of data at the start of the week encouraged Sterling to recover to a high of $1.5471, but news on Wednesday from ratings agency Fitch that the Euro could collapse unless the ECB became more active in European sovereign debt markets caused renewed risk aversion and the gains were very quickly lost.

This news also caused the EUR/USD rate to fall to a 16 month low of 1.2660. Sterling’s losses were compounded further after figures showed that the UK trade deficit widened in November as exports fell and imports increased, however December’s figures are expected to be better.

Weaker than expected US retail sales on Thursday were preceded by a fall in UK industrial output for the second consecutive month, almost cancelling each other out but we would have expected a slight recovery in Sterling after the Bank of England decided to maintain the current amount of Quantitative Easing (QE) at £275bn. It is still widely expected however that they are playing a waiting game and the scale of asset purchases is being “kept under review”, therefore most analysts expect to see a further expansion of QE announced at the February meeting and this will more than likely keep Sterling on the back foot.

UK inflation data next week is expected to show another fall towards 4% and could show that the Bank of England have time to keep UK monetary policy loose which would keep Sterling depressed against the Dollar, especially while unemployment figures on Wednesday are expected to be poor again. While US data is showing that the economy isn’t doing as well as most of the presidential candidates would like, it still looks like developments in the Eurozone will be the key driver of Cable.

With the USD being the world’s “safe-haven” currency, further problems within the Eurozone will more than likely continue to increase demands for the Greenback at the detriment of Sterling. At time of writing this we are waiting on an announcement from another of the big ratings agencies Standard & Poors who are expected to downgrade an unnamed European nation and this has forced the GBP/USD mid-market rate back into the 1.52’s.

Anyone looking to trade GBP/USD also has events outside the UK & US to consider so it is more important now than ever to keep in touch with us to make sure you are making an informed decision when buying or selling your currency.

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

Weekly Economic Data that may affect exchange rates

Monday – We kick off the new week with UK Housing Prices from RICS. In Europe, we see German wholesale prices. Markets are closed in the US for Martin Luther King Day. New Zealand has a release showing Business Confidence.

Tuesday – Things start to get a little busier today, with a host of UK inflation data out at 09:30, in addition to Retail Price Index measures. The EU also has some inflation numbers, which could affect where interest rates move in February. Staying in the EU, there are various German measures of Economic confidence. Finally, an interest rate decision in Canada rounds off the day.

Wednesday – Today sees unemployment numbers for the UK which will show the number of people out of work and claiming benefits. In Europe, there are some figures showing construction output. In the states we’ll see Inflation data, Industrial production, and the Housing Market index.

Thursday – Unusually for a Thursday, there is no UK data being released. The ECB will give a monthly report on the health of the EU economy, and Australia releases various measures of unemployment. Most data today is US based however; Inflation Data, Jobless Claims, Building Permits, and Manufacturing data.

Friday – Today’s UK release is Retail Sales; a good indicator of general consumer confidence. In Canada we will see the latest inflation figures. US data comprises Home 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 falls against Euro after Interest Rate decisions

2012-01-13T06:45:00.000Z

Friday 13th January 2012
Good morning. Friday the 13th. Unlucky for some, and certainly unlucky for those that did not take advantage of the 16 month high in rates this week, as levels have now dropped back away. In yesterdays post I pointed out that in 3 years, the GBP/EUR rate had gone through €1.20 several times, only to quickly correct downwards, and that a repeat could be on the cards. Indeed, after the Interest Rate decisions yesterday, the Pound fell after positive comments from the ECB president strengthened the Euro. We'll take a detailed look at what happened after the usual snapshot of where rates moved throughout trading yesterday:

~Currency Movements on Thursday 12th January~

Bank of England leave Interest Rates and QE on hold

UK interest rates have been held at their record low of 0.5% by the Bank of England's Monetary Policy Committee. Interest rates have now been at their record low since March 2009. The Bank did not announce any increase in its policy of quantitative easing. In October, the Bank said it would pump another £75bn into the economy.

The decisions were widely expected, and come amid concerns over the economy's strength due to weak consumer spending and the eurozone crisis. It caused no surprises in the currency markets, although we still think further QE will be on the cards in the coming months. If and when they do, expect Sterling weakness. I'll put my neck out and predict that they will announce an extension to QE in February. We shall see.

European Central Bank leave Interest Rates on hold

Shortly after the Bank of England decision, the ECB also announced no changes to it's interest rate, as expected. The decision followed two consecutive months of rate cuts, which were aimed at boosting the currency bloc's growth.

At a news conference, ECB president Mario Draghi said the eurozone economy was still experiencing "high uncertainty and substantial downside risks". However, he also made reference to balanced deflation risks, amd this may cause some to review their expectations.

Certinaly his comments had the effect of strengthening the Euro, pulling GBP/EUR rates over 1% down from the 16 month high seen earlier in the year. It's often been the case that his comments cause swings in exchange rates.

Protecting against adverse rate movements

I've recently talked about Stop Loss orders. Many clients chose to take advantage of these this week in order not to lose out on the best exchange rates in a long time. This is where when rates are good, but you don't want to purchase your currency in case things get even better. You place a Stop Loss at a level below the current rate, and if the market drops, your currency is purchased, giving you a safety net and a worst case scenario.

Those that chose this option should be pleased - the market levelled off at a 16 month high on Monday, and hardly moved all week. Following the events of yesterday, the market has dropped, and those with Stop Loss orders in place limited their loss by having their currency bought at a pre-agreed level.

In addition to Stop Loss orders, we can help you with Limit Orders and Forward contracts. Whichever type of contract you choose to place with us, our exchange rates are up to 5% better than you can achieve at the bank, potentially saving you thousands.

If you have a currency requirement, either now or in the future, click here to send me a free enquiry, and take the first step to making the most of your currency.

Using the services of an expert currency broker like ourselves can have benfits other than the obvious one of better exchange rates. We have various market tools, expert market knowledge, and the direct contact and customer service you just can't get at banks these days. Compare us to your existing broker or bank today.

Today's Data

Today the UK releases its latest inflation figures. The Eurozone and USA releases Trade Balance numbers, and there is also a US consumer Sentiment measure.

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.

BoE and ECB Interest Rate Decisions today

2012-01-12T06:45:00.000Z

Thursday 12th January 2011
Good morning. Today we'll look at the Pound Sterling forecast against other major currencies such as the Euro and USD. The Pound fell to a near 1 year low against the US Dollar yesterday. Against the Euro the Pound also ended the day down.

Trade balance figures were worse than expected, but the main reason was repositioning ahead of today's announcements by the Bank of England and European Central Bank. The below charts shows how rates moved throughout the day yesterday:

~Currency Movements on Wednesday 11th January~

Bank of England (BoE) announcement today

Today is a very important day for the Pound. At 09:30am we will see the latest manufacturing and industrial production figures. This is followed by an announcement at 12:00pm by the BoE on interest rates and Quantitative Easing (QE).

Most in the market expect rates to be left on hold, and no further QE stimulus. There is a small chance further money will be pumped into the ailing economy however, and it is this that is keeping the Pound in check against other currencies.

Trade balance figures were released yesterday and were slightly worse than expected, pushing the Pound slightly lower. This morning figures will be watched closely and if they are very poor, it could push the case for another round of QE.

It's an outside chance, but if it does happen expect the Pound to fall sharply. If you don't want to risk a drop, consider placing a Stop Loss order, so if rates do fall your currency will be bought at a pre-agreed level of your choice. This protects you against a drop, while allowing you to continue making gains should rates remain stable.

Contact me now to discuss Stop Loss orders.

European Central Bank (ECB) announcement today

Following the BoE decision, the ECB follow at 12:45pm with their interest rate decision. Again, I expect them to hold rates at 1%, but in recent months they have made 2 cuts in interest rates. Further cuts could weaken the already poor Euro. There are also some inflation and production figures for Germany/EU today.

Following the interest rate decision, the ECB president will give a lengthy press conference afterwards, where he will give an outlook of the EU economy. Watch this closely as quite often any positive or negative comments can significantly affect the GBP/EUR rate.

So will Pound/Euro rates continue to rise?

What will happen going forwards largely depends on if there is a resolution to the debt crisis. Some analysts think rates could continue to climb, while others cite weak UK growth as a reason to believe this spike is short term.

Nobody can predict the markets, so the only real forecast can be based on past performance. This is the 5th time in 3 years the GBP/EUR exchange rate has broken through the €1.20 level, and each and every time it has been followed by a sharp downward correction. While nobody can foretell whether the same will happen in 2012, the hard facts are this: GBP/EUR is at a near 16 month high, and nobody knows if or when global markets will stabilise.

If you need to buy or sell Euros and don’t wish to gamble on exchange rate movements, contact me today about the different ways we can help protect against any adverse exchange rate movements that could prove very costly indeed.

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/Euro forecast outlook for 2012 Q1

2012-01-11T06:40:00.000Z

Wednesday 11th January 2011
Good morning. Another calmer day, with the market finishing up pretty much where we started at the beginning of the trading day. Initially sterling slipped against the Euro, falling below the €1.21 level as investors trimmed bets to sell the single currency across the board, but the pound hovered near a 16-month high hit the previous day as sentiment towards the euro remained negative. Below you can see how rates for GBP/EUR and GBP/USD moved through the day yesterday:

~Currency Movements on Monday 9th January~

Pound remains near 16 month high vs Euro

As the charts above show, the GBP/EUR rate slipped throughout the day before recovering later. This was reported to be due to Euro demand from a UK clearer ahead of one of the Bank of England's afternoon fixings had pushed the single currency to the day's high. Demand strengthens a currency, and makes it more expensive, resulting in the drop.

Later in the day however, the Euro weakened again, pushing rates back towards the 16 month high recently seen. This is because if European officials are seen taking their time on solving the debt crisis, which could push more weak countries towards bailouts or even debt defaults. This is what is keeping rates supported at the moment, despite gloomy UK economic figures causing weakness for Sterling.

The most important release of the week will be the Bank of England rate decision on Thursday. We expect them to again hold rates at 0.5% and not to pursue any further Quantitative Easing, however there is an outside chance they could do so. I certainly expect more stimulus within the next few months if the economy continues to struggle, and this could weaken the Pound pushing exchange rates back down again.

While the EU debt crisis remains unresolved, and the UK retains its AAA credit rating however, it's likely GBP/EUR rates will remain supported.

UK Data disappoints

Other data released yesterday showed house prices fell at a marginally slower pace in the last quarter, but were expected to fall further. Retail Sales figures were also up for December, but the figures were being compared to last year, when you needed a snow shovel and ski-gear in order to get to the shops, so markets took the spike with a pinch of salt (unavailable at the time of the snow ironically!)

Sterling slips near dollar; USD strength could weaken Pound more

The pound was up a little against the US Dollar, but remained just below the $1.55 levels. Analysts see a risk of sterling weakness if the safe haven USD continues to get stronger and appreciates as the euro debt situation worsens. This could spell more weakness for sterling given that it has been closely tracking moves in the single currency against the greenback.

Today's Data

Today we will see UK Trade Balance figures, which often affect Sterling, especially if the numbers show a deficit. Germany releases GDP growth figures. In the USA there are Mortgage Applications and the Fed’s Beige Book, which is a report on the current economic conditions in the USA.

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 remains range bound vs Euro

2012-01-10T07:00:00.000Z

Tuesday 10th January 2012
Good morning. It was a much calmer day on the markets yesterday, after the volatility we saw last week. Sterling/Euro fell a small amount, but stayed around the 16 month high seen last week. The cross was range bound between just below €1.21 and €1.2130. The GBP/USD rate was also fairly stable yesterday. The charts below show rate movements:

~Currency Movements on Monday 9th January~

Sterling remains Range-bound vs Euro

There was no key data of note released for the UK yesterday, and as such there was little movement in the Sterling/Euro rate yesterday, but buying levels remain around the 16 month high, ahead of Spanish and Italian debt auctions later in the week.

These auctions are going to be seen as a key test of sentiment towards the beleaguered Eurozone. They will gauge investor willingness to invest in troubled euro zone sovereigns after newspaper reports over the weekend added to concerns the crisis is intensifying.

Also to look out for this week will be the meetings between French President Nicholas Sarkozy and German Chancellor Angela Merkel. They are due to meet to discuss final details of a deal to increase fiscal coordination in the region, but analysts said no significant new measures were expected. Indeed, the last few times they have met with many in the market expecting landmark measure, the markets were left disappointed, and we expect much the same with this meeting.

The euro zone debt crisis has helped the Pound in recent months, as it created investment in the UK gilt market due to investors seeking a safe haven away from the Euro.

But analysts said this flow was more a result of concerns about the euro zone than confidence in UK economic fundamentals. UK growth was weak in 2011 and is expected to remain so. Some in the market expect the UK to fall back into recession, so comments from the Bank of England later this week will be interesting to see.

There is also the outside chance we will see more Quantitative Easing by the Bank of England this week, although Personally I think this is unlikely until February at the earliest.

Today's Data

In the UK today we see BRC Retail Sales and RICS Housing Prices. There are no EU releases today, but Australia has Building Permits and confidence measures. Stateside, there are measures of economic optimism.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2012-01-09T07:00:00.000Z

Monday 9th January 2011
Good morning. Pound/Euro rates have surged to a 16 month high, so today as usual for a Monday morning, I will take a look at movements in the last week for Euro, US Dollar, forecasts for where exchange rates may go in 2012, and the weeks economic data that could affect exchange rates.

In this week’s Report:

• Sterling/Euro hits 16 month high above €1.21
• EU problems continue, weakening Euro
• GBP/USD rates fall as US jobs data surprises
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

Last week the Pound benefited against the Euro as the single currency slumped to its lowest level in 16 months, driven by fears that the Eurozone countries and their banks may be crumpling under the mounting pressure of their debts.

Shares in two Italian banks, including Unicredit, were suspended after sustaining heavy losses. Spanish banks also suffered last week after the Spanish finance minister said the banking sector would need a €50bn injection to aid recapitalisation. French and German banks were also hit, although to a lesser extent. The seemingly inexorable debt crisis led economists at the International Monetary Fund (IMF) to urge Asian banks to prepare themselves for turbulent times ahead.

The euro dropped to 82.39 pence (1.2137), its lowest level since September 2010. The pound's strength was down to euro zone weakness rather than a strong domestic economy, even though data on Thursday showed an increase in UK service sector activity.

However, figures released on Friday showed UK house prices fell 0.9 percent in December, in contrast to analysts’ forecasts. This however, had little impact on the currency and the Pound continued gaining strength against the Euro, gains which are expected to continue according to some analysts.

"I think euro/sterling will continue to go lower. All the problems that have caused euro zone bond markets to sell off in the fourth quarter have not only not been resolved, they look set to intensify," said Neil Mellor, currency strategist at Bank of New York Mellon.

Sterling’s gains last week were helped by Investors preferring the UK over euro zone government debt, boosting sterling, given UK deficit-cutting austerity measures that are already in place and the Bank of England's independent monetary policy committee.

To put last week’s gains into perspective, a typical purchase of €200,000 would have been £2080 cheaper on Friday than if it had been bought on Tuesday.

If you need to buy or sell Euros, send me a free enquiry now.

Sterling vs. US Dollar;

The New Year has seen a renewed level of volatility in the currency markets, which as the chart below shows, has been witnessed on the GBP/USD cross. Overall the Pound has had a positive start to 2012 initially rising against the Dollar after having dipped off in the tail end of December:

This early move can in part be explained by a surprising uplift in the manufacturing sector which was reported on the first working day in the UK. Indeed, an up-lift in global economic data from varying sectors had a positive impact for the perceived risky currencies, of which the pound is one and the Dollar is not.

Analysts’ expectations were not as overly positive as traders however, they were swift to remind the markets that although the final 2011 UK manufacturing figures were positive, they were the exception not the rule. The overall Q4 manufacturing figures were actually the worst since Q2 2009 and the overall view is that it may be unavoidable for the UK not to slip back into a technical recession. Again the chart below shows the dip off in the Pound as analysts’ views hit the market.

Indeed the slip in rates was compounded further last week by the hotly expected Non-Farm Payrolls on Friday lunch time. The marquee data release for US employment data showed a creation of 200,000 jobs in the non-farming sectors of the US economy last month, nearly 50,000 more than the predicted rise.

Furthermore these rises lead to a drop in overall unemployment in the US from 8.7 to 8.5%. The graph above went to print slightly before these figures were release otherwise another downward spike would be visible as over a cent was lost on cable after the NFP broke.

Looking ahead to next week we forecast further volatility that could easily see the spikes we saw in the week gone by. The market is still very much all eyes on Europe; what happens with the upcoming Bond sales across the EU will have a great effect on the Dollar which is still heavily benefiting from its safe haven status. Any further boosting of US technical data will only enforce this further.

To the upside for those looking to buy Dollars, the housing market over the pond is still stuttering so watch for further figures there, and any unilateral and positive moves from the big guns in Europe to sure up their issues will see cable rates move in their favour.

If you need to buy or sell US Dollars, click here to send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – We kick off the week with Australian Retail Sales and Home Sales. In the Eurozone there are German Trade Balance and Industrial Production Figures, in addition to EU wide investor confidence Measures. The only data of note from the UK is Halifax House Prices. The USA releases measures of the amount of consumer credit.

Tuesday – In the UK today we see BRC Retail Sales and RICS Housing Prices. There are no EU releases today, but Australia has Building Permits and confidence measures. Stateside, there are measures of economic optimism.

Wednesday – Today we will see UK Trade Balance figures, which often affect Sterling. Germany releases GDP growth figures. In the USA there are Mortgage Applications and the Fed’s Beige Book, which is a report on the current economic conditions in the USA.

Thursday – As usual, today is the biggest day of the week for UK and EU data, so expect choppy movements in the GBP/EUR rate. Starting in the UK, we have Industrial Production, Manufacturing Production and an Interest Rate decision from the Bank of England. In the EU we see German Inflation figures, EU Industrial Production, an Interest rate decision followed by a speech by the ECB president. There could be a rate cut in the EU which may weaken the Euro. Across the pond, we see Jobless figures from the USA, in addition to Retail Sales and a Budget Statement.

Friday – Today the UK releases its latest inflation figures. The Eurozone and USA releases Trade Balance numbers, and there is also a US consumer Sentiment measure.

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 at 16 month high vs Euro above €1.21

2012-01-06T08:32:00.002Z

Friday 6th January 2011
Good morning. Sterling has surged against the Euro, and risen to its highest in nearly 16 months. This was due to a weak Euro, over worries about EU sovereign funding pressures and after data showed a pick-up in UK service sector activity. At 08:30am this morning rates are as follows:

• GBP/EUR 1.2123
• GBP/USD 1.5609
• GBP/AUD 1.5127
• GBP/NZD
• GBP/CHF 1.4770
• GBP/CAD 1.5796
• GBP/ZAR 12.642
• GBP/JPY 119.69
• GBP/DKK 9.0151
• GBP/NOK 9.3128
• EUR/USD

Pound at 16 month high vs the Euro

Sterling rose against the weak Euro yesterday, breaking through the €1.21 level and creating the best buying opportunities for 16 months. The euro was down broadly and not just against the Pound. It hit lows versus the dollar and a decade low versus the yen as major concerns about euro zone countries' ability to raise funds in coming months pushed investors away from the common currency.

France's first bond auction of the year also happened, where investors mindful of the threat to the country's AAA rating demanded higher returns than they had for the same maturities in December. Italian and Spanish debt sales next week were seen as further key tests of investor sentiment as both countries grapple with huge budget deficits.

If you need to buy Euros, now is a good time to consider a Stop Loss order, whereby you can set a lower level below the current rate, and if the exchange rate falls below this, your currency will be purchased, protecting you against adverse rate movements.

Sterling outperforming the Euro

If UK economic data continues to show improvement, this will dampen expectations for further quantitative easing by the Bank of England, also helping the pound. Economists polled by Reuters still expect the BoE to expand its asset purchasing programme though by less than they forecast in a poll in December.

"The manufacturing, services and construction PMIs have all surprised on the upside and offer some hope that there is still life in the UK economy," said James Knightley, economist at ING.

Today's Data

We end the week focused on EU data: Consumer Confidence, Economic Confidence, Retail Sales and German Factory Orders. We end in the USA with unemployment figures and Non-Farm Payrolls.

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 makes good start to 2012

2012-01-04T07:00:00.001Z

Wednesday 4th January 2012
Good morning. The Pound has started 2012 well, rising against the US Dollar and staying close to a 1 year high against the Euro. This was following better than expected data from the manufacturing sector yesterday. Below shows how rates moved through the first global trading day of the year.

~Currency movements on Tuesday 3rd January 2012~

Pound remains near 1 year high vs Euro

The Pound rose a little yesterday after better than expected global data lifted the markets, and boosted riskier currencies, of which the Pound is one. Better Manufacturing data also gave the Pound a little boost, but analysts said the survey would not alter the view that the UK risks slipping into another recession. Over the fourth quarter as a whole it showed manufacturing recorded its worst performance since the second quarter of 2009.

Many are sceptical that sterling can be considered a safe haven asset like the USD is, and given the fragility of the UK economy and its debt levels, which are still high despite government austerity measures aimed at reducing the country's deficit, some say that the Pound could drop against the Euro as UK data comes into focus.

There is still no consensus however, with other analysts expecting the Pound to gain further against the Euro, so it's very hard to know in which direction this cross could take in the coming weeks and months.

So if you need to buy Euros in 2012, what are your options?

The Euro debt crisis has weakened the Euro significantly, and currently rates are very close to the best in a year. While of course you will hope rates go up further, but don't want to leave yourself exposed to a fall - remember, only a few months ago rates were in the €1.13's, and a recent Financial Times survey showed economists expect a bleak 2012 which could rival 2009 for economic weakness in Britain as output is hit by the euro zone debt crisis, so there's lots that could happen to push rates the wrong way.

Many of my clients have therefore chosen to employ 'Stop Loss' orders. This is where you can place a lower level below the current exchange rate, and if the exchange rate then drops, your currency is purchased giving you a worst case scenario. In this way you can keep taking advantage of any gains in the rate, while having protection should the market move against you.

To discuss this and other ways to get the best exchange rates, send me a free enquiry now.

Pound makes small gains against US Dollar.

Sterling rose against the US Dollar yesterday as pretty good global economic data supported riskier currencies and after a survey showed UK manufacturing activity contracted less than forecast in December. The USD is seen as a safe haven currency, and so when investors are less risk averse when better data comes along, often the Dollar weakens and becomes a little cheaper to buy.

Today's Data

We have quite a bit coming from the UK today, including UK money Supply, Mortgage Approvals, Lending and Construction data. In Europe we have further inflation figures from the EU and Germany. In the USA we see Mortgage approvals and Factory Orders.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2012-01-03T07:00:00.000Z

Tuesday 3rd January 2012
Good morning. The currency markets enter a new year, and today we'll have a look at what happened towards the end of 2011 regards Pound vs Euro, Pound vs US Dollar, and a round up of the weeks data that may affect exchange rates.

In this week’s Report:

• Sterling/US Dollar hits near 3 month low
• Pound remains supported against weak Euro
• EU debt crisis fears continue as Italian Bond auction disappoints
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

The final week of 2011 was not surprisingly a very quiet week with the UK only taking part in 3 days trading. There were only a splattering of fiscal data releases of note with the most notable being the Italian Bond auction.

The refinancing caused a mild stir as they as they managed to reduce their cost of borrowing €7bn from 7.56% to 6.98% although there are still concerns about the high cost of borrowing considering they are expected to need to borrow €450Bln in 2012.

Friday saw the Nationwide house prices data released and despite a slight reduction from November to December of -0.2%, overall house prices in the UK saw a positive movement of 1% during 2011. Nationwide’s outlook for 2012 is for low levels of activity with prices moving sideways for modestly lower.

After a quiet week last week this week we are back into things full swing with a whole host of data releases across the board with a focus on inflationary data releases in the UK and the Eurozone. Keep in contact with your FCG Account Manager for up the minute market movements to help you make the most of your currency.

If you need to buy or sell Euros, send me a free enquiry now.

Sterling vs. US Dollar;

Last week saw Sterling hit a 2 ½ month low versus the dollar, GBP/USD dropped to its lowest since October as investors looked towards the dollar and its safe-haven status. This was on the back of weak demand at an Italian bond auction highlighted risks the euro zone debt crisis could worsen in 2012.

Analysts expect the pound to suffer versus the dollar in 2012 as worsening European debt problems could wreak havoc on London's financial sector, while speculation about more Bank of England quantitative easing may also sting sterling in the New
Year.

Michael Derks, chief strategist at FXPro, said flows into the dollar would continue next year to the detriment of the pound, which could fall towards $1.50 early in 2012. “I would be surprised if the recent spate of dollar demand didn't continue into the New Year, and if that is the case, then we're likely to see Cable drift back further."

With the currency markets being so volatile it is important to keep in touch with your account manager at the Foremost Currency Group to ensure you stay up to speed with the market. If you are buying or selling currency in the next 12 months we can help you make an informed decision to making the most of your currency.

If you need to buy or sell US Dollars, send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – UK Markets closed for Bank Holiday. There were however some Inflation figures for Germany and Europe however they had little effect on exchange rates.

Tuesday – Global markets re-open after the Christmas break. In the UK the only release of note is PMI data that is a measure of inflation. There are German unemployment figures released at 9am. In the USA there are manufacturing figures and the FOMC minutes showing discussions during their last interest rate decision.

Wednesday – Data starts flowing in earnest now, with UK money Supply, Mortgage Approvals, Lending and Construction data. In Europe we have further inflation figures from the EU and Germany. In the USA we see Mortgage approvals and Factory Orders.

Thursday – There are various Australian releases of note today, including Home Sales, Trade Balance figures and the RBA commodity index. Closer to home, German Retail Sales kicks off the EU data, closely followed by EU Industrial Orders and EU PPI figures. In the UK we see PMI numbers in addition to Halifax House Prices. In the USA there are various Jobless and Manufacturing numbers.

Friday – We end the week focused on EU data: Consumer Confidence, Economic Confidence, Retail Sales and German Factory Orders. We end in the USA with unemployment figures and Non-Farm Payrolls.

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 vs Euro, Pound vs US Dollar

2011-12-30T08:32:00.002Z

Friday 30th December 2011
Good morning. Welcome back to the blog after the Christmas break. Today we'll take a quick look at where rates have moved against the Euro and US Dollar, and when markets open again on Tuesday, I'll post a detailed update on market movements over the last week. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1938
• GBP/USD 1.5421
• GBP/AUD 1.5196
• GBP/NZD 1.9988
• GBP/CHF 1.4517
• GBP/CAD 1.5752
• GBP/ZAR 12.523
• GBP/JPY 119.63
• GBP/DKK 8.8733
• GBP/NOK 9.2823
• EUR/USD 1.2913

Pound falls to a near 3 month low vs US Dollar

Sterling has fallen to the lowest against the US Dollar in over 2 and a half months. The USD has attracted broad safe-haven flows after weak demand at an Italian bond auction highlighted risks the euro zone debt crisis will worsen next year.

Analysts expect the pound to suffer versus the dollar in 2012 as worsening European debt problems could wreak havoc on London's financial sector, while speculation about more Bank of England quantitative easing may also sting sterling in the new year.

Pound remains supported against the Euro

Sterling is quite well supported against the weak Euro, following Italian bond auctions that saw yields of 7%, seen as unsustainable and weakening the Euro slightly Rates remain in the €1.19's.

Concerns over the fragility of the British economy are seen extending well into 2012 with BoE policymakers leaving the door open for more quantitative easing in February.

"Whilst some further tranches of QE from the BoE are likely, the fact that the ECB are very likely to keep adding liquidity throughout the new year will keep the euro on the back foot and euro/sterling could see a test lower," said Richard Wiltshire, chief FX broker at ETX Capital.

Have a very Happy New Year, and regular blog posts will resume every working day when the markets re-open on the 3rd of January.

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.

Blog shutdown for Christmas

2011-12-19T13:32:00.003Z

Tuesday 20th December 2011
Good morning. The blog will now close for a short time while I take a much needed Christmas break! Blog updates will resume on the 30th of December.

The live rates in the sidebar will continue to be updated every 30 seconds. You can also keep abreast of rate movements in the following way:

Click here for the most recent market Report

Click here to follow rate updates on Twitter

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-12-19T07:00:00.001Z

Monday 19th December 2011
Good morning. So, it's the usual Monday morning take on the previous weeks movements in the currency markets.

In this week’s Report:

• Pound/Euro rates peak at 10 month high
• Euro depreciates due to lack of resolution to debt crisis
• UK unemployment at 17 year high
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

The markets verdict on last week’s EU summit became clear as the week saw investors move towards safe-haven currencies like the USD. Sterling was well supported with Cameron’s decision to exclude the UK from the new Eurozone treaty as we saw the GBP/EUR rate reach a new high of 1.1949 (Interbank).

Tuesday saw Germanys Chancellor Angela Merkel declare that no further money will be made available for the European Stability Mechanism and that the ECB will not become a lender of last resort. This immediately affected the value of the Euro pushing it up towards the 1.19 level. In the UK, Consumer Price Index (CPI) fell from 5% to 4.8%, but events in the Eurozone overshadowed this.

The Euro weakened further on Wednesday with the GBP/EUR rate reaching a ten month high. UK jobless figures were released and had increased by 128k reaching over 2.64 million, the highest number of unemployed since 1994. With poor data being released from both the UK and Euro zone you might expect that the pairing would stay relatively stable. The reason why this didn’t and hasn’t happened is due to the uncertainty to what is going to happen with the single currency.

Credit ratings of the world’s biggest lenders have come under pressure as weak economic growth and concerns about whether European politicians have done enough to end the Eurozone debt crisis. Some of the world’s most powerful investment banks were downgraded by ratings agency Fitch.

France was warned by credit ratings agencies that it could be downgraded over the Eurozone crisis. Some in France suggest that any downgrade should instead start with the UK, however Downing Street brushed off the remarks stating “we have put in place a credible plan for dealing with our deficit”. This statement is key to why Sterling is performing well at the moment; the markets like the fact a plan is place to reduce our deficit, and this is why Sterling is supported despite poor economic data.

So in summary rates are currently at a 10 month high and rates do look to be stabilising as EU leaders carry on discussing how to combat the debt crisis. Rate forecasts in a recent Sunday Times article for 2012 varied between 1.14 and 1.25 showing the lack of consensus and the fact it could go either way depending on how the single currency reacts.

If you need to buy or sell Euros, send me an enquiry now.

Sterling vs. US Dollar;

Sterling’s fortune against the Greenback last week was in vast contrast to its performance against the Euro despite Europe’s crisis being the main driver as explained in the Euro report above.

Sterling fell to its lowest level in three weeks on Monday as investors questioned the progress made at last week's EU summit, driving demand for the safe-haven U.S. currency as analysts played down the impact on Sterling of UK Prime Minister David Cameron's veto of any EU budgetary rules, despite concerns that he risks isolating Britain in the 27-nation bloc.

Europe issues aside, the US economic outlook showed signs of improvement and further bolstered the Dollar as unemployment figures month on month returned better than expected, manufacturing output was up from the preceding month, inflation held steady and the FOMC (Federal Open Market Committee) left their monetary policy unchanged and highlighted the turmoil in Europe as a big risk to the U.S. economy.

Coupled with the positive week the US had in terms of economic indicators, cable would continue to take its lead from the Euro crisis, eventually forcing Sterling to a two month low moving towards the close of the week.

As the Euro zone crisis deepens there is every chance we could see the Dollar strengthen further unless of course the European treaty can somehow restore confidence to the markets in which case we may see a renewal of risk appetite as investors begin to test the water once more.

As the levels of uncertainty in the markets and volatility increase and as we near the Christmas holiday season it may be a prudent decision if you have an impending transfer to keep in close contact with your FCG account manager to ensure your maximising your return on your funds.

If you need to buy or sell US Dollars, send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – New Zealand has business confidence data that might affect GBP/NZD rates. Closer to home Rightmove has it’s house Price index, reflecting the health of this sector. In Euro, there is construction data, but of course continued developments in the Eurozone will likely have the biggest effect on rates.

Tuesday – Today the UK will see Nationwide and Gfk Consumer Confidence figures which may affect Sterling. In Australia the minutes to the recent interest rate decision are released. There is lots of data from Germany also today; Confidence measures, Inflation numbers, Business climate and current account assessments, all of which could affect the Euro. Across the pond, the USA released housing and building data, and Canada has a host of inflation data.

Wednesday – The main UK data today is Public Sector borrowing. A deficit would weaken Sterling. There are no key releases from the Eurozone. In the states there are Homes Sales numbers, Canada releases Retail Sales, and in New Zealand GDP figures are released at 21:45pm.

Thursday – A busy day for the UK and US. Starting at home, we have GDP data, Business Investment numbers, and Current Account data. In the USA there are also GDP releases, in addition to Jobless Claims and personal expenditure.

Friday – The Japanese Emperors Birthday, although this is unlikely to affect the currency markets. Of more importance will be UK mortgage approvals. In the states there are quite a few releases; Personal Consumption, Durable Goods Orders and New Home 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.

Will the Pound/Euro rate go up or down?

2011-12-16T07:00:00.001Z

Friday 16th December 2011
Good morning. It was a slightly calmer day in the markets yesterday, with the Pound remaining around the 10 month high against the Euro hit on Wednesday. The Pound also recovered slightly against the US Dollar. UK retail sales helped boost the Pound a little, as analysts said the underlying trend was surprisingly robust as previous months were revised higher. Below you can see how the Pound fared against the Euro and US Dollar during trading yesterday:

~Currency movements on Thursday 15/12/11~

Taking stock of the recent Pound vs Euro gains

So as we know, Sterling/Euro rates have risen this week to their highest in 10 months. But will rates continue to rise? Should you buy your Euros now or wait?

It's crucial to remember that this weeks gains for the Pound have been driven by negative sentiment towards the euro due to the escalating debt crisis. There has been no real good economic news from the UK.

Analysts said sterling's recent gains versus the euro mostly reflected euro zone debt worries after a European Union summit last week offered no hope the crisis will be resolved soon. This lack of a resolution has meant investors worried about further depreciation of the single currency moving funds out of the Euro, weakening it further.

Indeed, many of my clients this week have been converting Euros to the safe haven Swiss Franc or to Sterling. If you are considering doing the same, contact me now to find out about our commercial exchange rates.

I've been asked many times this week whether rates will continue to rise. While it's impossible to predict this, my view and indeed many analysts view is that it may struggle to get much higher, as GBP/EUR rates will face resistance at this level. This is where limit orders usually by large corporate firms are filled at certain levels, flooding the market and bringing rates back down.

"The 1.20 level in sterling/euro is a big level of resistance. A lot of orders from UK importers come in around there," said Lee McDarby, head of dealing for corporate and institutional treasury at Investec.

What else are the analysts saying? Will Pound/Euro go up or down?

There are widley contrasting forecasts coming out at the moment. Some have predicted more gains for sterling versus the euro in the coming weeks due to the safety of government bonds. However others think otherwise.

But Jane Foley who is a senior currency strategist at Rabobank, said although sterling was benefiting from some safe haven flows out of the euro zone, investors were likely to be unsettled by poor UK fundamentals, meaning any upside could be limited. Also political events in the UK could play their part. If there is any sign of dissent in the coalition after last weeks EU veto by David Cameron, this could pull the Pound back down. Political uncertainty is not good for a currency.

What you should do if you want to achieve the best exchange rates

Everybody’s requirement is different, as are peoples attitude to risk. Therefore the best course of action may differ depending on your requirements and risk appetite. Why not take the time to have a free consultation on your requirement. I can explain all the different options available to you in order for you to make an informed decision on what to do.

And don't forget, whatever course of action you take, our exchange rates are up to 5% better than banks and other financial institutions, and on large volumes this difference could save you a fortune.

Click Here to send me a free enquiry and book your free 10 minute consultation.

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 hits 10 month high vs Euro

2011-12-15T07:00:00.000Z

Thursday 15th December 2011
Good morning. Investors continued to shun the Euro yesterday, weakening it further pushing GBP/EUR rates to a 10 month high, best since February. Sterling remained largely driven by negative sentiment towards the euro, leaving the Pound vulnerable as it fell to two-month lows versus the US Dollar. Later in the day, GBP/EUR rates fell back away, and the charts below show how exchange rates fared yesterday.

~Currency movements on Wednesday 14/12/11~

Pound vs Euro hits 10 month high

As the charts above show, the Euro weakened yet again yesterday and pushed the exchange rate up to a 10 month high. The euro was pressured as Italy had to accept higher borrowing costs, and the currency markets are also pricing in possible downgrades of euro zone countries after last week's European Union summit offered no hope of an immediate resolution to the debt crisis.

This weakened the Euro making it even cheaper to buy, and this is the reason for the gains. Later in the afternoon rates fell back away slightly but remain supported at very good buying levels.

The fact remains that the Pounds gains are really just a reflection of euro zone debt worries rather than any particular strength for Sterling. Also the EU veto by Cameron last week could be negative for the pound in the longer term. The key to whether rates will rise further will be whether the Bank of England opt for any more Quantitative Easing.

You can read more about yesterdays decline in Pound/Euro rates in, of all places, the Daily Mail. (apologies, it's not the type of newspaper I would normally link to!)

Sterling falls against the US Dollar

As the charts above show, Pound/Dollar rates fell yesterday. Same reason as usual! Euro weakness causing Dollar strength, making it more expensive to buy.

Pound rises against Australian Dollar

Sterling made good gains against the Aussie yesterday, and the Pound gathered strength in the light of the EU debt problems. Despite the UK economy suffering, it's seen as a safer bet than the Euro, helping push rates up. Rates gained by 1% yesterday.

Today's Data

A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

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 surges to new 9 month high vs Euro

2011-12-14T07:00:00.001Z

Wednesday 14th December 2011
Good morning. Sterling/Euro rates rose again yesterday, gaining quite a bit during afternoon trading after reports that German Chancellor Angela Merkel rejected raising the upper limit of funding for the euro zone bailout mechanism, broadly weakened the single currency.

It was a fresh 9 month high, and in addition to the comments from Merkel, markets are disappointed by the outcome of last week's EU summit, and the threat of a credit downgrade is also looming over the EU. Sterling fell a little against the US Dollar, but remains fairly range bound at the $1.5500 to $1.5600 mark. The charts below show how exchange rates moved during trading yesterday (Tuesday) and you can see the surge in GBP/EUR in the afternoon after the comments from Merkel:

~Currency Movements Yesterday (13/12/11)~

Pound hits new 9 month high against the Euro

The fact that Angela Merkel rejected raising the upper limit of funding for the euro zone bailout fund had an immediate effect on the Euros value, weakening significantly and pushing GBP/EUR rates to fresh 9 month highs, approaching €1.19.

Also affecting rates, as mentioned in previous posts this week, the EU summit last week failed to reach any sort of agreement, or measures that would see the European Central Bank step up purchases of bonds. If they did it would relieve pressure on the struggling euro zone, and aso boost confidence in the markets. However the lack of this has meant investors selling off the Euro and it has weakened accordingly.

There is also the threat of a downgrade in the EU. Standard & Poor's warned last week that they could downgrade many Eurozone countries. Another credit agency Moody's said earlier this week it would also review the ratings of all 27 European Union states early next year. They are worried that last week's EU summit created no solution.

Weak Euro, but no fundamental strength in Sterling

The Prime Minister last week vetoed proposed treaty changes at the EU gathering. Analysts said that while this might create problems in the future, for now markets like the safety of UK assets, as they feel that at least in the UK there is a credible fiscal strategy in place to tackle debt, unlike the EU. So while we have our economic problems in the UK, the Pound remains supported against the single currency.

Yesterday we saw some inflation data which was pretty much as forecast, leading some to question whether more stimulus in the UK would be needed in the form of Quantitative Easing. The Bank of England's chief economist said yesterday that inflation would probably drop to just over 3 % early next year.

However many in the market are forecasting UK economic data like low jobs, high unemployment, slow retail sales and falling output could drive the BoE to resort to more asset purchases in coming months. As I've been saying in recent posts, more QE would flood the market with Pounds and push exchange rates lower. Last time QE was announced, GBP/EUR rates fell by 3 points in 2 days.

Will the Pound go higher against the Euro?

Impossible to say. Of course further issues in the Eurozone could weaken the Euro even more, but what other poor data could you hope for?! They have cut interest rates, many EU countries are in crisis and investors are dumping the Euro - this is what has caused it to weaken.

Some clients that need to buy Euros may want to see if it will go higher still, but in my opinion you would be holding out for an inch, and risking losing a yard. While of course it could keep rising, I believe there is much more to lose than there is to gain. Just over a month ago rates were around €1.13 - today buying €150k is £6000 cheaper due to the higher rates.

What would I do?

If I had Euros to buy, I probably wouldn't want to risk losing the gains seen in recent weeks. You could either buy your currency now, or if you are adamant you want to aim for more, then I would place 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 hope for the market to rise further, but have a safety net in place should rates drop. this is a good strategy to employ to make sure you don't lose out on the recent gains.

To discuss this type of order, or indeed anything to do with getting the best exchange rates, click here to send me a no obligation enquiry. I can provide a free consultation as to your options, and of course our exchange rates are significantly better than you can achieve at the bank, so the savings you make could be considerable.

When getting in touch, ask for Alastair Archbold and quote 'BLOG' to receive free transfers.

Best GBP/EUR rates in 9 months

2011-12-13T07:00:00.001Z

Tuesday 13th December 2011
Good morning. The Pound surged against the Euro during trading yesterday afternoon, hitting a fresh 9 month high - the best exchange rates to buy Euros since March this year. Why did the Pound go up against the Euro? It's due to the single currency being sold off. As there was no real progress made at the summit last week, the Euro has weakened and become cheaper to purchase.

This also caused investors to flock to the safe haven US Dollar yet again, pushing Pound/Dollar rates lower. Below you can see how GBP/EUR & GBP/USD rates fluctuated during trading yesterday (Monday).

~Currency movements yesterday (12/12/11)~

Lack of progress in Europe weakens Euro; GBP/EUR up

European Union leaders last week struck a historic agreement for a new treaty for deeper integration within the euro zone. However, analysts and policymakers have remained very sceptical indeed that a solution will be found to the crisis. This was reflected in the currency markets yesterday, with a mass sell off of Euros by investors, significantly weakening the Euro and making it cheaper to buy. This pushed the Sterling/Euro exchange rate to a 9 month high; the best it's been in 9 months, much to the delight of clients requiring Euros.

Peter Kinsella, a currency strategist at Commerzbank said yesterday that "We still don't have an effective implementation regime in the EU, so nothing has changed on a fundamental basis,". So as markets don't see that anything has changed, worries about the EU resurfaced yesterday and this was the reason for the jump in rates into the €1.18's.

Given that in October the rate was €1.13, this is a significant increase. To put this in to real terms, buying €150,000 now compared to just a month or two ago is over £5500.00 cheaper.

If you want to take advantage of the current rate, even if you don't need your Euros for up to 2 years, you can lock the rate with a Forward contract. You only lodge 10% of what you want to convert, and the remaining 90% when you want your currency. In this way you can fix your rate at the high and be protected against any potential fall.

If you need to buy Euros, click here and send us a free enquiry.

Sterling falls against US Dollar

Despite the surge in rates against the Euro yesterday, the Pound didn't fare so well against the US Dollar. Due to the EU debt crisis having no solution, as I've outlined above investors have sold the Euro for the 'safe haven' US Dollar, and this strengthened the US currency making it more expensive to purchase.

This is reflected in the charts above, where you can see the steady gain in GBP/EUR rates but the choppy trade against the USD that saw us end the day down.

Today's Data

Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-12-12T07:00:00.002Z

Monday 12th December 2011
Good morning. As usual for Mondays, today I will take a look at events in the past week that have affected exchange rates, GBP/EUR & GBP/USD in particular, along with a breakdown of economic data releases that might affect exchange rates.

In this week’s Report:

• EU Summit fails to agree way forward
• Sterling/Euro rates near 8 month high
• GBP/USD rates fall as USD strengthens
• 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 an extremely volatile one for Sterling/Euro exchange rates, with wild swings in buying levels as events in the Eurozone affected the Euros value. On Thursday, the ECB decided to cut interest rates down to 1% whilst the Bank of England kept interest rates at a record low 0.5% and announced no change to its £275 billion asset purchase programme. This was widely expected, and there was little effect on the markets, in fact the Euro gained a little strength after the decision. This was not to last however, as ECB President Mario Draghi started an aggressive sell-off across the spectrum of risky assets, stressing that the central bank would not help with financing member countries’ debts and adding that the bank doesn’t see a high risk of deflation. Mr Draghi confirmed that the decision was not made unanimously.

Summit talks took place on Friday with EU leaders agreeing stricter budget rules for the Euro zone but failing to secure changes to the EU treaty among all 27 member states. Countries also failed to reach an agreement on giving a banking license to the Euro zone's permanent bailout fund, limiting its firepower.

EU central banks will provide €200 billion to the IMF to help fight the debt crisis, with the majority of the money (€150 billion) coming from Eurozone member states. Private-Sector Involvement (PSI) in shouldering future losses on member countries’ bond holdings will follow IMF rules, rather than the haphazard approach taken with Greece, and the operation of the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM) facilities will be turned over to the ECB. Separately, the European Banking Authority said EU banks will need to raise an additional €114.7 billion in new capital to help them weather the debt crisis.

Overall, this is a hugely disappointing outcome. These seemingly weak measures do not go nearly far enough, and as a result the Euro has weakened significantly, helping GBP/EUR rates remain high.

On the other side of things, Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself. Analysts said while it may be positive for Sterling if a proposal from the EU for a tax on financial transactions did not impact the UK, there were also concerns that the UK would be left isolated, with much less influence in Europe. First impressions are that EU leaders have not quite shot themselves in the foot by alienating British support (even assuming it was ever offered) but it looks as though they have considerable ground to cover.

Sterling stayed close to an 8 month high versus the Euro on Friday, with a choppy morning session reflecting uncertainty over the outcome of a European summit that did little to impress markets overnight. The Pound looked on track to test its strongest level against the Euro since March as it benefited from investors seeking alternatives to the Euro. Even after all of this, investors still remain concerned about the risks facing the UK economy and its vulnerability in the event of a severe downturn in the Euro zone.

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

Sterling vs. US Dollar;

It has been a pretty flat week in the U.S with markets waiting to see what happens at the latest Eurozone summit.

The American economy has been experiencing a period of positivity recently with a raft of good data being released last week. The unemployment rate is at its lowest level in two and a half years, manufacturing appears to be picking up and early reports suggest that the holiday shopping season is off to a strong start. Slowly but surely the U.S seems to be heading in the right direction, which has been represented in the markets with rates holding at a relative low.

But any further gains for the Dollar have been held in check by the threat of major issues in the Eurozone. The U.S economic recovery could be derailed seeing as America's finances are so closely tied to what happens across the Atlantic and the picture is not rosy. The Eurozone is the single biggest customer for American goods, so if they're not buying, U.S. businesses suffer. "The situation in the euro area is rapidly deteriorating and contagion is spreading," said Pier Carlo Padoan, the chief economist of the Organisation for Economic Co-operation and Development (OECD).

Last week leaders holding all-night talks in Brussels added 200 billion euros ($267 billion) to their crisis-fighting war chest and tightened anti-deficit rules, which was hailed by European Central Bank President Mario Draghi as a “very good outcome.”

It is a waiting game to see what happens in the Eurozone but what we do know is that when Europe has problems they become everyone’s problems. A complete European meltdown could kick off a chain reaction that might lead to a global credit crisis. On the other hand we could see some sort of resolution that increases confidence in the Euro.

In a nutshell, it is events in the Eurozone that are driving GBP/USD rates. When there is uncertainty, investors flock to the perceived safety of the Dollar, and this in turn strengthens it, making it more expensive and pushing exchange rates down. If there is a resolution in the EU, it could reverse this flight to safety and we could see the USD weaken again, however it’s impossible to predict what affect global events will have on GBP/USD rates.

The fact of the matter is, things are on the edge whichever way you look at it. It is vital to keep in touch with your account manager at the Foremost Currency Group to make sure you keep abreast of the goings-on in the market. We can ensure that if you are buying or selling currency in the next 12 months you have all the information available and we can help you make an informed decision to making the most of your currency.

If you need to buy or sell US Dollars, send us a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – There is no UK data today. Australia released Trade Balance figures, and Germany releases price index data. The main even is a monthly budget statement from the USA which could affect GBP/USD rates.

Tuesday – Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

Wednesday – Unemployment figures are released for the UK today in addition to earnings data. In the Eurozone Industrial production figures are of note. In the USA we will see import prices. Australia releases inflation forecasts also today.

Thursday – A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

Friday – We end the week with Consumer Confidence numbers for the UK, Trade Balance figures are also released today. The USA and Canada both release measures of inflation.

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.

Crucial day for exchange rates: Euro, USD, AUD

2011-12-09T07:00:00.002Z

Friday 9th December 2011
Good morning. It was a very choppy day indeed in the currency markets yesterday, with an interest rate cut in the Eurozone and negative comments by the ECB president weakening the Euro and strengthening safe haven currencies. We saw Sterling/Euro rates gain however Sterling/US Dollar rates dropped significantly, as the charts below show:

~Currency movements yesterday~

Bank of England leave rates and QE on hold

Yesterday the Bank of England's (BoE) Monetary Policy Committee (MPC) voted to keep interest rates on hold at 0.5%, and announced no change to its Quantitative Easing (QE) programme. There was little reaction in the currency markets to the rate decision given many investors had already positioned for it to be unchanged. As the decisions were as predicted, there was no real change for the Pound, however there probably will be more QE in the coming months, putting Sterling at risk.

"There will be more asset purchases at some point next year, the UK economy is definitely fragile and needs easing," said Ankita Dudani, G10 currency strategist at RBS.

QE is seen as negative for sterling because it involves flooding the market with pounds and reducing demand, thus lowering exchange rates.

European Central Bank (ECB) cut interest rates

The ECB yesterday decided to cut interest rates down to 1%. This was widely expected, and there was little effect on the markets, and in fact the Euro gained a little strength after the decision. This was not to last however, as the ECB presient Mario Draghi ruled out any substantial aid for any ailing and indebted eurozone states, and this had quite an impact on exchange rates. Mr Draghi confirmed that the decision was not made unanimously.

ECB President's comments significantly weaken the Euro, strengthen the US Dollar

There had been speculation amongst analysts that the ECB may be preparing to bail out Italy, however Mr Draghi ruled this out during the post interest rate decision press conference: "We have a treaty that says no monetary financing to governments."

The euro weakened significantly as soon as he made the comments, and fell more than a cent against the dollar, while Sterling/Euro rates rose on the news. Looking at the charts above, you can clearly see the effect of his comments around 1pm. Sterling/Euro rose as the single currency weakened, and this also drove investors to the safe haven US Dollar. When there is uncertainty, investors buy the US Dollar, and this in turn strengthens it becoming more expensive to purchase. The charts reflect this and this also explains why GBP/EUR rose while GBP/USD fell.

EU summit ends today

The moves from the ECB yesterday come ahead of a "do-or-die" Brussels summit of European Union heads to hammer out a deal on how to tackle the eurozone debt crisis, including a potential new treaty. The 2 day EU summit ending is expected to agree tough new rules and automatic fines to ensure that eurozone governments cut their borrowing to below 3% of their GDP.

There is a very good and detailed article here on the BBC website that explains the ins and outs of the summit.

So what effect will the EU summit have on exchange rates?

The short answer is nobody knows. If the summit agrees on measures that the markets think will put an end to speculation on the future of the Euro, then we could see the Euro strengthen and GBP/EUR rates falling. If however there is no consensus reached, this could leave the markets wondering what will happen with countries like Greece and Italy.

If Greece were to default and exit the eurozone the consequences could be dire; a run on Greek banks, contagion spreading to other eurozone banks and Greeks facing even worse hardship than now, with the cost of imports rocketing. The priority is to reassure investors enough to halt the rise in eurozone bond yields. The leaders believe they can do that, so long as heavily indebted countries like Greece stick with deep cuts in spending and other austerity measures.

With regards to exchange rates, tomorrows developments will likely have an effect one way or the other. Put simply, if problems are solved, GBP/EUR could fall and GBP/USD could rise. If there is continued uncertainty, GBP/EUR could remain supported and GBP/USD could fall further.

What you should do to ensure you get the best exchange rates

You've already taken the first step by finding my blog and doing a little research on what may happen with exchange rates. I have worked in the Foreign Exchange markets for 10 years, and have a detailed knowledge of the currency markets. I also work for one of the UK's leading FSA registered foreign exchange brokerages, and the rates we can achieve for our clients are up to 5% better than banks and other financial institutions.

So, take the second step to making the most of your currency:

Click here to send us a free enquiry.

There is no cost or obligation involved, and you can take advantage of a free consultation on your particular requirements, helping you to make an informed decision on when to buy. As long as you are looking to convert £5000 or more, and can have an account for us to wire your currency to, we can help. Get in touch today.

Sterling Euro rates surge on renewed EU concerns

2011-12-08T07:00:00.000Z

Thursday 8th December 2011
Good morning. So why did the exchange rates go up so suddenly yesterday? There was a significant increase in Sterling exchange rates, with Sterling/Euro rising by over 1% before falling back away slightly. The Euro was knocked by comments from a German government official which tempered optimism over a comprehensive solution to the euro zone's debt crisis at this week's EU summit. This weakened the Euro significantly, and also strengthened riskier currencies such as Sterling.

The below charts show how the Pound fared against the Euro and US Dollar yesterday, showing the significant jump in rates after the comments:

Pound/Euro rates gain significantly on EU summit concerns

The current exchange rate movements are being driven by swings in sentiment ahead of the EU summit which begins this evening, with EU leaders trying to agree on a solution to the debt crisis that has been affecting exchange rates for some time now.

The comments yesterday cast doubt whether a solution will be found, and it shows that Germany is increasingly pessimistic about the chances of a deal to solve the euro zone debt crisis at the summit this week. The official said that because some governments don't seem to grasp the gravity of the situation, a solution is unlikely to be found.

This caused weakness in the single currency, and Sterling exchange rates gained by over 1% - a big gain in just one day. To put this into perspective, buying €200k at yesterdays high compared to yesterdays low would save you £2000.00.

"For sterling it's all about the headlines coming out regarding the EU summit at the moment which are proving very difficult to trade," said Kathleen Brooks, research director at FOREX.com.

Sterlings gains are despite continuing concerns over the UK economy

British industrial output fell more than expected and at its fastest pace in six months in October, according to data released yesterday. This has increased concerns that the economy may drop back into recession after a run of weak economic data.

"October's official UK industrial production figures are even weaker than we or the consensus had expected and suggest that the risk that the overall economy re-enters recession in the fourth quarter remains high," said Samuel Tombs, economist at Capital Economics.

So as has been the case for some time, the Pounds value is being driven by events in the Eurozone. With a solution to the crisis now seeming unlikely, riskier currencies such as Sterling are benefiting as investors do not want to hold funds in Euros, and the demand for the Pound is the reason for the increase in exchange rates.

Today's Data

Earlier in the week we saw interest rate decisions for New Zealand, Canada and Australia – today is the turn of the UK and EU. They will announce any change in interest rates, and whether they will pursue any Quantitative Easing. It could be a volatile day for GBP/EUR rates. Later in the day, the USA released various jobless and employment numbers.

Summary

The gains seen yesterday have pushed GBP/EUR rates back to a near 9 month high. This has happened several times in the last few months, and each time it doesn't last at these levels for very long, as any negative data regarding the UK economy can quickly pull rates back down again.

If you need to buy Euros, consider taking advantage of the spike while it is here. We have various types of currency contract that let you fix the current rate, even if it will be some time before you need your currency.

Contact me today by clicking here, and take advantage of a free consultation on the options available to help you achieve the best exchange rates.

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 Sterling Forecast vs Euro 2012

2011-12-07T07:00:00.000Z

Wednesday 7th December 2011
Good morning. It was a bit of a mixed day in the currency markets yesterday. Initially Sterling rose against both the Euro and US Dollar as Standard & Poor's warned about a mass downgrade if EU leaders fail to act decisively. However good EU data and poor UK data reversed this trend, and Sterling exchange rates slipped throughout the afternoon. After the rate/chart snapshot, today we'll look in detail at developments regarding the EU debt crisis, and what the future may hold for GBP/EUR rates.

• GBP/EUR 1.1616
• GBP/USD 1.5620
• GBP/AUD 1.5176
• GBP/NZD 1.9967
• GBP/CHF 1.4417
• GBP/CAD 1.5741
• GBP/ZAR 12.432
• GBP/JPY 121.27
• GBP/DKK 8.6335
• GBP/NOK 8.9512
• EUR/USD 1.3443

Standard and Poor's in EU downgrade threat; weakens Euro

Initially yesterday, Sterling/Euro rates rose after Standard & Poor's said it may carry out a mass credit downgrade of euro zone countries if EU leaders fail to move decisively on solving the region's debt woes at this week's summit. The ratings agency said the decision was prompted "by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole".

Markets took this as Euro negative, and as a result GBP/EUR rates rose as the single currency became cheaper to purchase. The gains were very shortlived however, as the above charts illustrate. As we'll see in a moment, poor UK data combined with better than expected figures from the EU caused Sterling rates to fall through the afternoon.

Sterling exchange rates fall on fundamental data

So why did exchange rates fall through the afternoon? It was due to much better than expected German industrial orders data, which was then compounded by weak UK retail sales and housing market surveys which highlighted the fragility of the UK economy.

German industrial orders rose by 5.2% in October, which was more than twice the amount forecast by analysts. As the figures were so good, it painted a better economic picture in the EU, and this is why the Euro gained strength throughout the afternoon.

It has eased concerns about the euro zone economy, and so yesterday mornings gains were very short lived indeed.

UK economic data also disappointed yesterday, pulling Sterling exchange rates lower as a survey showed the biggest drop in Retail Sales since May. This indicates a lack of consumer confidence and as a result Sterling fell against other currencies.

So what is the Pound/Euro forecast for December and for 2012?

In recent months, Sterling has been supported versus the euro in recent weeks by investors that are concerned about the EU, moving their funds out of Euros and into UK gilts, however this is unlikely to continue should the UK economic picture worsen.

Many currency analysts think that ongoing signs of weakness in the UK economy will put a dampener on the pound as a fragile economy will require the Bank of England to continue buying assets from the market, which involves flooding the market with the currency. If it were not for the problems in the EU, GBP/EUR rates would be significantly lower than they are.

If a consensus is reached this week in meetings between Germany and France, then we could see the Euro stabilise and gather strength. Coupled with a weakening pound, this could mean significantly lower exchange rates. If however problems in the EU continue, the Pound could remain supported against the Euro, but if there is more QE to come from the BoE, many question how long any support could last.

Summary

In short, much depends on any resolution to the EU debt crisis, as this has been driving exchange rates globally, and not just between Sterling and Euros. Whatever currency you need to buy or sell, this could have significant impacts on the exchange rate you're able to achieve.

If you are looking to achieve the best possible exchange rates, then I can provide you with a free consultation on what direction rates may move in, and strategies you can employ to ensure you don't lose out should rates move against you.

Click here to send me an enquiry, and take the first step to achieving the best possible exchange rates and make the most of your currency.

Sterling Euro forecast for December 2011

2011-12-05T17:45:00.003Z

Tuesday 6th December 2011
Good morning. Sterling rose against the US Dollar yesterday and was up ever so slightly against the Euro, as the Pound tracked a rally in the euro after an agreement between France and Germany on proposals to help solve the euro zone crisis raised confidence in currencies perceived to be higher risk. The pound was also supported by better-than-expected services PMI data. Below you can see how exchange rates moved throughout trading yesterday, and a snapshot of rates as at 08:30m this morning.

• GBP/EUR 1.1685
• GBP/USD 1.5632
• GBP/AUD 1.5300
• GBP/NZD 2.0094
• GBP/CHF 1.4475
• GBP/CAD 1.5890
• GBP/ZAR 12.593
• GBP/JPY 121.52
• GBP/DKK 8.6877
• GBP/NOK 9.0262
• EUR/USD 1.3373

Pound makes slight gains against US Dollar and Euro

As you can see from the above charts, the Pound rose a little against the Euro and US Dollar yesterday, although not by much and the market was generally flat for most of the day. The reasons for the slight gains were the talks in the EU, where France and Germany agreed a series of reforms with regards to the EU debt crisis.

Many in the market think this could be the start to finding a solution to the debt crisis, and this in turn supported riskier currencies. As Sterling is seen as a riskier investment, the increased confidence caused the Pound to rise slightly against the Euro and Dollar, but fell slightly against the Australian Dollar as the antipodean currency is riskier, and so gained more and became more expensive to purchase.

UK Growth falters, giving uncertainty to the direction of Sterling

There were also better than expected PMI figures released yesterday, however despite the improved headline PMI reading, the survey also showed employers shed jobs at the fastest pace in a year, and the majority of market analysts that UK economic growth is faltering. The UK economy looks likely to by either flat or show minimal growth in the last few months of the year.

Further Quantitative Easing could push exchange rates lower

The problem is that signs of weakness in the UK economy will put a damper on the pound as a fragile economy will require the Bank of England to continue buying assets from the market, which would flood the market with the currency. The last time Quantitative Easing was announced Sterling/Euro fell by nearly 3 points, and it's likely the BoE will need to pursue more QE in the coming months, and have hinted as much in recent publications.

Investors and currency speculators of late have been selling the pound for the US Dollar, whenever headlines suggesting policymakers are struggling to make progress in resolving the debt crisis hit risk appetite. This in turn has strengthened the US Dollar and brought GBP/USD rates down in recent weeks

Today's Data

A very quiet today for the UK, with only Retail Sales being released. Canada and Australia have an interest rate decision. Germany releases Factory Order data, and the USA has measures of economic optimism.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-12-05T07:00:00.000Z

Monday 5th December 2011
Good morning. So, the start of another week and as usual today I will give a detailed outlook of recent movements in Sterling/Euro, Sterling/US Dollar, and a round up of the weeks economic data that could affect exchange rates.

In this week’s Report:

• Global Central Banks in Co-Ordinated move
• Chancellors budget statement gives Sterling strength
• Riskier currencies benefit from Central Bank move
• 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 saw the volatility of the currency markets continue. At the start of the week we saw Sterling lose ground against the Euro, with markets waiting in anticipation for George Osborne to update the country on the state on the UK economy and the government’s future plans in his autumn statement. Despite Mr Osborne’s announcement of slower growth and tough austerity measures the markets reacted positively and the GBP/EUR was pushing back toward the €1.17 level.

However the gains did not last long, with the sudden announcement that six central banks led by the Federal Reserve made it cheaper for banks to borrow dollars in emergencies in a global effort to ease Europe’s sovereign-debt crisis. This was in response to increased tension in global financial markets. Almost immediately the GBP/EUR rate fell by 1%.

The cost for European banks to borrow dollars dropped from the highest in three years, amid continued concerns about the euro’s worsening debt crisis. Two hours before the Fed announcement, China cut the amount of cash that the nation’s banks must set aside as reserves for the first time since 2008.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the Fed statement said.

As rates stabilised towards the end of the week, there still seems to be no end in sight for the troubled Eurozone. Friday saw German Chancellor Angela Merkel make a keynote speech and said Europe is working towards setting up a "fiscal union", in an effort to resolve the Eurozone’s debt crisis. She went on to say an EU treaty was needed to set up such a union and impose financial discipline.

So in summary, rates have continued to trade in a €1.16 to €1.1730 range, as global economic uncertainty continues. It’s worth noting however that rates are still significantly higher than just a few months ago, and not far from a 9 month high.

With so much uncertainty surrounding the currency markets, if you need to buy Euros in the next 6 months, consider a Forward contract. This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.

If you are looking for the best exchange rates, click here and send us a free enquiry.

Sterling vs. US Dollar;

The start of last week saw disappointing data released from the UK , with CBI reported sales figures for November showing a sharp decline and net consumer credit figures also dropping sharply. Conversely, we had a few positive batches of data released across the pond, with a huge increase in US consumer confidence for November and a slight rise in new home sales in October.

Despite this, the Pound actually made gains against the Dollar over Monday and Tuesday. As is often the case, strong US data influenced investor’s risk sentiment, encouraging a move away from the safe-haven of the US dollar and into riskier assets, weakening the greenback in the process.

Midweek saw the market make sharp moves upon the announcement that the Federal Reserve along with the European Central Bank, the Bank of England and the central banks of Japan, Switzerland and Canada would make it cheaper for the banks to borrow dollars, providing further liquidity in the market and easing the mounting pressure in the Eurozone. Consequently, the GBP/USD showed a good advance with mid-market rates moving up from 1.5567 to close Wednesday at 1.5706. To put this into perspective, a typical purchase of $200,000 would have seen a £1137 variation in price.

Although Sterling had gained against the Dollar it remained vulnerable as concerns increased about the state of the UK economy after data released on Thursday showed that the manufacturing sector contracted for a second successive month. The UK PMI reading fell to 47.6 in November, its lowest level since June 2009. This caused GBP/USD to bounce around and investors were sceptical that the rally on the back of the coordinated central bank action was sustainable.

Positive data out of the US on Friday strengthened the Dollar against Sterling, pushing GBP/USD rates lower, after it was announced that unemployment had fallen by 0.4%. All in all, it was a choppy week’s trading, with investors quick to book profits on sharp spikes for fear of the next negative headline out of Europe.

If you are looking for the best exchange rates, click here and send us a free enquiry.

Weekly Economic Data that may affect exchange rates

Monday – It’s a quiet start to the week in terms of UK data, with only Inflation data being released today. From the Eurozone we have some inflation numbers, Retail Sales figures, and measures of investor confidence. I the USA Durable Goods Orders are released, in addition to manufacturing production.

Tuesday – Again very quiet today for the UK, with only Retail Sales being released. Canada and Australia have an interest rate decision. Germany releases Factory Order data, and the USA has measures of economic optimism.

Wednesday – Australia has GDP figures released this morning. UK data comprises of Industrial and Manufacturing production. New Zealand announces their latest decision on interest rates.

Thursday – Earlier in the week we saw interest rate decisions for New Zealand, Canada and Australia – today is the turn of the UK and EU. They will announce any change in interest rates, and whether they will pursue any Quantitative Easing. It could be a volatile day for GBP/EUR rates. Later in the day, the USA released various jobless and employment numbers.
Friday – A busy end to the week for the UK, with Inflation data and Trade balance figures being released. Germany also has inflation data, and the USA releases consumer sentiment measures.

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 vs Euro Outlook Forecast Predictions

2011-12-02T08:31:00.003Z

Friday 2nd December 2011
Good morning. Rates remained fairly flat yesterday, with no surprise announcements or adverse data, so there were no dramatic swings in rates as we have seen earlier in the week. Today after the rate snapshot we'll have a detailed look at what the next few months may hold for Sterling/Euro. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1650
• GBP/USD 1.5701
• GBP/AUD 1.5312
• GBP/NZD 2.0095
• GBP/CHF 1.4374
• GBP/CAD 1.5899
• GBP/ZAR 12.671
• GBP/JPY 122.07
• GBP/DKK 8.6603
• GBP/NOK 9.0873
• EUR/USD 1.3473

Pound/Euro rates near a 9 month high

Exchange rates for Pounds to Euros are currently very close to their best in 9 months. So why have exchange rates increased, and what is likely to happen in the next 3 months?

The main reason for rates increasing is the EU debt crisis. As I’m sure you will have seen in the news over the last few months, problems in Greece, Italy, Portugal, Ireland and Spain have caused global economic uncertainty, and this has weakened the Euro making it much cheaper to purchase. In the last 3 months, exchange rates have increased by 3.5% which may not sound like much, but when converting £10k this means you achieve over €400 Euros more. There are real fears that the crisis will spread to other countries within the EU, and it is this that is keeping the euro weak.

So will Sterling/Euro rates continue to rise?

It’s impossible to predict exchange rate movements, but it is important to remember there is no fundamental strength in the Pound. The reason it is performing so well against the Euro is the fact it’s perceived as a safer bet, so savers and investors worried about the debt crisis have been buying the Pound, which has supported it against the Euro.

Chancellor George Osborne earlier this week updated MPs on the state of the economy and the government's future plans in his Autumn Statement as the Office for Budget Responsibility (OBR) publishes its latest growth and borrowing forecasts. Despite most news outlets pitching the statement as doom and gloom amid revised growth forecasts for the UK, the markets have taken it positively as reflected in the Pound rising yesterday. He said slower than expected growth meant it would take longer to reduce the budget deficit, meaning tough austerity measures will extend beyond the next election in 2015.

That is likely to underpin the UKs AAA credit rating and encourage more flows into safe-haven UK gilts. That in turn has supported Sterling despite the prospect of more Quantitative Easing (QE) by the BoE and the risk of recession. Analysts say the fact the UK is following an austerity plan and the BOE is proactive in easing monetary policy is a positive for sterling in the coming months.

Also highlighting the volatility in global markets at the moment, was the recent move by some of the world's biggest central banks, when they announced a programme of co-ordinated action designed to support the global financial system.

The US Federal Reserve, the European Central Bank (ECB), the Bank of England and the central banks of Canada, Japan and Switzerland are all involved. They will make it cheaper for banks to buy US dollars, which they hope will ultimately help businesses and households access finance more easily.

As the eurozone debt crisis has deepened, banks have found it harder to access finance. Analysts said the central banks' move would help to relieve some of this strain within the global financial system.

It should be noted however that recent economic figures suggest that the UK will fall back into recession, and with the Bank of England likely to pursue further QE in the coming months, many analysts expect the Pound to fall. QE floods the market with Sterling which reduces demand, weakening the currency and pulling exchange rates down.

If you need to buy currency in the next 3 months, what are your options?

With the UK’s economic future uncertain, there is every chance rates could fall back away as quickly as they have risen. It’s only the EU debt crisis keeping rates where they are, and given GBP/EUR is near a 9 month high, if you need to buy Euros in the next 3 months, consider a Forward contract.

This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.

To discuss any of the above further, contact me today by clicking here. We can give you a free consultation on all the options available to you, whatever your currency requirement, helping you to make an informed decision on when to fix your rate, and make the most of your currency.
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.

Global Central Banks in move to increase liquidity

2011-12-01T08:27:00.002Z

Thursday 1st December 2011
Good morning. Risk appetite has returned to the markets after a surprise joint action by the worlds central banks. The FED, the European Central Bank and the central banks of Britain, Canada, Japan and Switzerland agreed to cut the cost of existing dollar swap lines by 0.5% in a bid to help European banks hurt as a result of the euro zone debt crisis. This pushed GBP/EUR down and GBP/USD up as riskier currencies benefited. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1651
• GBP/USD 1.5660
• GBP/AUD 1.5408
• GBP/NZD 2.0248
• GBP/CHF 1.4288
• GBP/CAD 1.5973
• GBP/ZAR 12.760
• GBP/JPY 121.44
• GBP/DKK 8.6590
• GBP/NOK 9.0595
• EUR/USD 1.3425

Worlds Central Banks in joint action

You can read a detailed report on what happened with the central bank move here on the Telegraph website, that gives a pretty good summary. The surprise announcement by the central banks yesterday is to create liquidity in financial markets, and it fuelled the market's appetite for risk and encouraged investors to sell the safe haven US Dollar. The effect on the currency markets was instant - the GBP/EUR rate dropped from €1.1720 to €1.1630 in around 10 seconds, and the GBP/USD rate rose by around 2 cents in just a few minutes.

Many clients have asked why the Pound/Euro rate fell while other rates rose. This is due to risk sentiment. The move created more appetite for risk in the markets, so any currency seen as risky such as the Euro gained on the news, becoming more expensive to purchase. Safe haven assets like the USD and GBP fell, and so we saw the US Dollar become cheaper to buy, but the Euro more expensive.

Analysts said sentiment was lifted by the hope that the plan may limit market volatility and go some way to helping find a solution to the ongoing debt and economic problems in the eurozone. In a separate move, China also said it would free up money for its banks to lend. This move also helped soothe concerns about the speed with which its economy was slowing.

This should, according to policymakers, trickle down and make it easier for businesses and households to get access to finance, giving confidence to the market and larger economy in general. As well as cheaper US dollars, the central banks will also provide easier access for lenders to other major currencies as and when they need it.

Markets have settled down this morning, and rates stand at the levels above at around 08:30 this morning.

So what should you do if you need to buy Euros?

If you need to buy Euros in the next 3 months, consider a Forward contract. Rates yesterday were close to a 9 month high, but the developments yesterday have started to pull rates back down, and given the UK economic recovery is still uncertain, the Pound could fall further.

How do Forward contracts work? This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.

Send us an enquiry now by clicking here, and have a free consultation on the options we can offer you to help you get the best exchange rate.

Today's Data

In the UK today we see further House Price data from the Halifax, in addition to some inflation figures. Australia has some releases today including Building Permits and Retail Sales. In the Eurozone there are various inflationary measures. From the USA we have Jobless Claims and Unemployment data.

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 strengthens after Budget Statement

2011-11-30T08:29:00.003Z

Wednesday 30th November 2011
Good morning. The Budget statement yesterday reinforced Sterling as a safe haven currency within Europe, pushing exchange rates higher against other currencies, and to a near 9 month high against the Euro as the EU debt crisis deepens. So why has the Pound risen against the Euro? Today we'll take a look at what strengthened the Pound and the forecast for GBP/EUR rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1710
• GBP/USD 1.5535
• GBP/AUD 1.5598
• GBP/NZD 2.0492
• GBP/CHF 1.4355
• GBP/CAD 1.6076
• GBP/ZAR 13.073
• GBP/JPY 121.04
• GBP/DKK 8.7067
• GBP/NOK 9.1185
• EUR/USD 1.3265

UK Budget Statement strengthens Sterling

Chancellor George Osborne yesterday updated MPs on the state of the economy and the government's future plans in his Autumn Statement as the Office for Budget Responsibility (OBR) publishes its latest growth and borrowing forecasts. You can read a detailed report on what happened here on the BBC site, as here we will only focus on the effect on exchanger rates.

Despite most news outlets pitching the statement as doom and gloom amid revised growth forecasts for the UK, the markets have taken it positively as reflected in the Pound rising yesterday. He said slower than expected growth meant it would take longer to reduce the budget deficit, meaning tough austerity measures will extend beyond the next election in 2015.

That is likely to underpin the UKs AAA credit rating and encourage more flows into safe-haven UK gilts. That in turn has supported Sterling despite the prospect of more QE by the BoE and the risk of recession. Analysts say the fact the UK is following an austerity plan and the BOE is proactive in easing monetary policy is a positive for sterling in the coming months.

In contrast, the euro zone debt crisis keeps getting worse with little policy action to stop the contagion. The debt crisis continues to deepen in the EU, and this has weakened the Euro further yesterday, pushing GBP/EUR rates back above €1.17.

There remains no fundamental reason to buy the pound, however amid the problems in Europe it has become a safe haven currency for savers worries about keeping Euros, and this has supported Sterling and is the reason exchange rates have risen.

So if you need to buy Euros in the next 6 months, what are the options?

Buy Forward now – this way you know where you are, but of course can’t take advantage if the rate does get higher.

Wait and see – it could go a little higher, but not by a huge amount. The risk here of course is rates falling away.

Use Stop Loss/Limit Orders – with these, you can place a ‘Limit order’ to buy at a level that’s not currently available, 1.18 for example. At the same time you can place a ‘Stop Loss’ order to buy should rates fall below a pre-agreed level, for example 1.15. This way you have a ‘worst case scenario’ should rates fall, but if they don’t you can still take advantage of any gains

Hedge your bets – Forward buy half what you need now, and take a gamble on the other half. This way you have some level of protection regardless what happens with rates.

To discuss any of the above options further, or to find out more about how much you can save by using us to secure your currency at commercial exchange rates:

Click here to send us an enquiry and have a free consultation on your options.

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.

UK Budget statement today

2011-11-29T08:26:00.002Z

Tuesday 29th November 2011
Good morning. The Pound rose slightly against the USD yesterday, but remained range-bound against the Euro as comments from Bank of England policymakers that more asset purchases may be needed to boost UK economic growth helped to curb some of sterling's gains. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1630
• GBP/USD 1.5514
• GBP/AUD 1.5594
• GBP/NZD 2.0508
• GBP/CHF 1.4305
• GBP/CAD 1.6034
• GBP/ZAR 12.923
• GBP/JPY 120.86
• GBP/DKK 8.6499
• GBP/NOK 9.1344
• EUR/USD 1.3336

UK Budget Statement today

Chancellor George Osborne will today outline plans to boost the UK's slow economy. This is against expected gloomy forecasts for growth, after the OECD warned yesterday that the UK was likely to slip back into recession.

They predicted a 0.03% contraction in the UK economy this quarter, and a further 0.15% the next. Bank of England governor Sir Mervyn King told MPs that growth would be flat for the next six months as the eurozone crisis threatens the UK's recovery. This has kept Sterling in check against other currencies and has limited gains in exchange rates.

In his statement later he is expected to confirm that growth will be lower and borrowing much higher than planned. Many analysts have also warned that a nationwide strike of public sector workers scheduled for tomorrow may also sour sentiment for UK assets among foreign investors if they call into question the future success of dramatic austerity measures.

There is much negativity at the moment that could hurt the Pound, despite the EU debt crisis also weakening the Euro. Without the problems in Euro exchange rates would be significantly lower, so if you need to buy Euros consider taking advantage of the current rates, as negative sentiment today could lower exchange rates.

If you are looking for the best exchange rates, send us a free enquiry now. Our rates are up to 5% better than you can achieve at the bank, representing significant savings.

Today's Data

In addition to the budget statement, there is UK House Price data is released today, in addition to mortgage approvals and lending data. Germany has some Retail Sales figures, and the EU releases Industrial Confidence, Consumer Confidence and Economic confidence. From the USA we have consumer confidence and Housing Prices.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-11-28T07:00:00.002Z

Monday 28th November 2011
Good morning. It's the start of a new week, so today we'll take a detailed look at how the currency markets fared last week, in particular Sterling against the Euro and US Dollar.

In this week’s Report:

• Sterling/US Dollar rates hit 7 week low
• EU debt crisis keeps Euro weak
• ECOFIN meeting could affect GBP/EUR levels
• 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;

It was a slightly less volatile week than we have been used to of late, but we still saw more than 1.5 cents between the high and the low as risky currencies suffered in the early part of the week as Spanish government bonds climbed to a much higher price than was anticipated, and German bonds saw weak demand, raising concerns that German sovereign debt may be losing its safe-haven appeal. Sterling/Euro started to move up from the low seen on Wednesday of 1.1544 and the decline in the single currency was compounded by weak Eurozone industrial data that showed its largest monthly fall in almost three years.

Wednesday also saw the release of the Bank of England minutes from November’s meeting. The committee voted unanimously to hold the bank rate at 0.5% and maintain the current level of Quantitative Easing at £275bn which was largely in line with expectations. The minutes did however shed some light on why we hadn’t seen an increase in the asset purchase program and suggested that further policy moves may be unlikely before February.

Even though inflation is expected to fall below target over the medium term (which gives the BoE more room to expand QE as it normally adds to inflation) it looks like the MPC will take their time in monitoring the impact of the new round of asset purchases and will help them to look at the evidence of how inflation is falling. This by no way means we will not see any surprises from the central bank as the last increase of £75bn in October was quite unexpected and forced the Pound down 3 cents against the Euro in 24 hours; this made a €200,000 purchase £4,500 more expensive in 1 day!

With UK growth seeming to hold steady at 0.5%, and most other UK data remaining positive on the whole, we expect the GBP/EUR cross to be mainly moved by developments in the Eurozone. We have seen poor industry figures and retail sales from most of the main EU economies of late and there is still the real possibility that we could see another interest rate cut when the ECB meet on 8th December which could all weigh on the Euros progress.

It is also possible that Greece will need another round of financial aid before the 9th December which we would expect to restrict the Euro in the meantime, but based on previous bailouts, any help could strengthen the single currency after it is announced. With this in mind we could easily see weeks like earlier in the month where the rate can move 3 cents between the high and low in just a day.

If you need to buy or sell Euros, click here and send me a free enquiry now.

Sterling vs. US Dollar;

Sterling hit a seven-week low against the Dollar on Friday, dragged lower by a weakness in the Euro versus the U.S. currency on worries that European officials were making little headway in solving the Eurozone debt crisis. The Pound fell to $1.545, its weakest since early October, as investors sold currencies perceived to be risky for the safety of the Dollar, boosting it broadly.

The UK currency also struggled in the aftermath of bleak economic outlooks given by Bank of England officials on Thursday, and was poised to post its worst weekly performance versus the Dollar in a year.

The latest knock to Sterling came after BoE policymaker Ben Broadbent on Thursday said Britain risked sliding back into recession, while his colleague David Miles said more quantitative easing was possible.

Markets were relatively quiet towards the end of last week, with trade lightening significantly into the US holiday. After polishing off Thanksgiving turkeys, millions of Americans headed to the shops on Friday for the busiest shopping day of the year. In fact, half of the entire US population was expected to hit the shops at the weekend.

Black Friday (so-called as it is when many retailers head out of the red and into the black) saw many stores open at midnight, or even earlier this year. Consumer spending accounts for about 70% of US economic activity and therefore a fair movement could be expected with the GBP/USD cross. A bad holiday season would raise recession fears again, whereas a strong one would start to dispel those fears. Analysts said that a powerful start to the shopping season could stimulate more hiring of staff by the retail industry, which supports about one-quarter of all jobs in the US.

Barack Obama also noted that: "It's one of the worst days of the year to be a turkey".

If you need to buy or sell US Dollars, click here and send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – We start the week in the Eurozone, with Inflation and Confidence measures from Germany. In the UK, the only data of note is a trade survey from the CBI. Stateside we see new home sales and building permits.

Tuesday – UK House Price data is released today, in addition to mortgage approvals and lending data. Germany has some Retail Sales figures, and the EU releases Industrial Confidence, Consumer Confidence and Economic confidence. From the USA we have consumer confidence and Housing Prices.

Wednesday – UK data today is quite light, with only Consumer Confidence measures. Today we have the ECOFIN meeting, in which the finance ministers of the 27 member states will discuss various coordinated economic measures. Staying in the Eurozone, we also have a raft of unemployment data from the EU and Germany. There are also EU inflation figures released today. In the USA we have Home Sales, & Non-Farm Productivity. Canada releases GDP data today which could affect GBP/CAD rates.

Thursday – In the UK today we see further House Price data from the Halifax, in addition to some inflation figures. Australia has some releases today including Building Permits and Retail Sales. In the Eurozone there are various inflationary measures. From the USA we have Jobless Claims and Unemployment data.

Friday – We end the week with UK house Price Balance data from the RICS. The EU has some inflation figures, and the USA releases its monthly NonFarm Payroll data which often creates significant volatility for GBP/USD rates due to the numbers being so difficult to forecast.

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 hits 7 week low vs US Dollar

2011-11-25T08:44:00.002Z

Friday 25th November 2011
Good morning. Sterling hit a 7 week low against the US Dollar yesterday, as there have been no signs of progress on resolving the euro zone debt crisis. This prompted investors to shun riskier currencies such as Sterling. Debt problems in the euro zone along with the weakest German bond auction in more than a decade have also weakened the Euro, and at 08:30am this morning rates are as follows:

• GBP/EUR 1.1641
• GBP/USD 1.5481
• GBP/AUD 1.5956
• GBP/NZD 2.0870
• GBP/CHF 1.4294
• GBP/CAD 1.6223
• GBP/ZAR 13.166
• GBP/JPY 119.75
• GBP/DKK 8.6545
• GBP/NOK 9.1253
• EUR/USD 1.3296

UK Economy grows at 0.5%

UK economic growth between July and September was left unchanged in the latest figures from the Office for National Statistics. The Bank of England has forecast that the economy will stagnate in the next three months of this year, and is likely to grow at between 0.7-0.8% next year. The ONS said inventory growth added 0.7% to GDP in the third quarter.

BoE vote 9-0 for rate hold and QE

Earlier this week the Bank of England minutes showed the MPC were unanimous in their vote to keep interest rates on hold and not pursue any further Quantitative Easing. This has given some support for Sterling, however we do expect further QE at some point in the next few months.

Today's Data

There are no significant economic releases today. On Monday, I will post a detailed summary of Sterling/Euro rates and Sterling/Dollar rates over the last week, and a list of economic data to watch for that could affect exchange rates.

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 hits 6 week low vs USD

2011-11-22T08:33:00.002Z

Tuesday 22nd November 2011
Good morning. The Pound fell yesterday to a 6 week low against the US Dollar, and also dropped against the Euro, as investors shunned riskier currencies in favour for safe haven assets such as the USD. The EU debt crisis however is keeping the Euro weak and has limited drops in GBP/EUR rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1577
• GBP/USD 1.5681
• GBP/AUD 1.5849
• GBP/NZD 2.0868
• GBP/CHF 1.4310
• GBP/CAD 1.6250
• GBP/ZAR 12.951
• GBP/JPY 120.65
• GBP/DKK 8.6143
• GBP/NOK 9.0538
• EUR/USD 1.3543

Pound falls to 6 week low against the US Dollar

Investors have been seeking safety due to the market turmoil caused by the Eurozone debt crisis. When there is economic uncertainty, investors tend to move away from riskier currencies such as Sterling, and instead seek the perceived safety of the US Dollar. This has strengthened the US Dollar and pushed GBP/USD rates to a 6 week low.

Sterling at risk of further drops this week

There is some key data this week that could push the Pound lower against other currencies. Tomorrow, minutes from the BoE's latest monetary policy committee (MPC) meeting will be released. They left interest rates on hold at the record low of 0.5% and opted not to pursue further QE for the time being.

Analysts however expect the minutes to show the BoE's readiness to extend quantitative easing further. Last week, BoE policymaker Martin Weale said there was a "very strong case" for extending the central bank's QE programme next year. Another BoE policymaker also argued that high inflation was not a threat and the economic outlook had turned out to be grim, as forecast.

This is likely to keep Sterling under pressure, however drops vs the Euro will probably be limited due to the EU debt crisis.

Today's Data

Public Sector borrowing figures are released for the UK today. In the Eurozone there are measures of Consumer confidence. The main data today comes from across the pond, with US Gross Domestic Product and Canadian Retail Sales. We also see the FOMC (US) minutes which can indicate future interest rate movements.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-11-21T07:00:00.001Z

Monday 21st November 2011
Good morning, and welcome to a new week in the currency markets. As customary for Monday mornings, today I will give a detailed assessment of GBP/EUR, GBP/USD, and a full breakdown of economic data releases that may affect exchange rates.

In this week’s Report:

• UK GDP and BoE minutes this week could weaken GBP
• Italy’s bond yields keep Euro weak and GBP/EUR high
• US Dollar strengthens, pushing GBP/USD down
• 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 struggled last week with weak sentiment, and expectations of a slow and protracted economic recovery with GBP/EUR rates hovering a little below an 8 month high, as the chart below clearly illustrates:

A jittery European market rolled over from the week before, with France and Germany clashing again on differing opinions on how best to handle the current economic crisis. One wanting the ECB to do more while the other feeling the ECB lacks the authority to do more. Bond yields crept up towards the 7% mark in Greece, Italy and Spain as analysts discussed the effects of “contagion” spreading.

Rising yields are bad for a currency and the levels of 7% are seen by analysts as unsustainable. As a result the Euro weakened, becoming cheaper to buy and presenting an excellent opportunity for those looking to buy the single currency. Many investors sold the euro in favour of the pound this month on the view that UK assets are safer than some in the euro zone in light of the deepening debt crisis in the region, compounding the supported GBP/EUR levels.

Better news followed for the German and French economies as their 3rd quarter GDP figures recorded growth, 0.5% and 0.4% respectively. The latter half of the week saw mixed economic data from the UK; unemployment rose significantly to near record levels, while UK retail sales returned better than expected despite many analysts predicting a fall. Sterling was also hit by the BoE downgrading the UK economic outlook citing the Eurozone debt issues as the major contributor and growth hurdle.

Sterling remained relatively unscathed, but the week’s economic developments could be a precursor of more volatility in the weeks to come. With poor UK data signalling a possible return of Quantitative Easing by the Bank of England, most analysts are predicting weak performance from the Pound in the coming weeks, so we could see exchange rates fall further depending of course on further developments from the Eurozone.

So just how does this affect you? Buying €200,000 at the current levels compared to just several weeks ago is significantly cheaper by around £6500, clearly demonstrating how volatile the markets can be, and the effect this can have on the cost of a property purchase in just a couple of weeks.

Due to the current rates of exchange, Forward contracts are very popular at the moment, as they enable you to lock into today’s rates for up to two years in advance, and only lodge a 10% deposit of the total you need to convert, thus giving peace of mind and allowing you to budget effectively.

Considering the volatility in the market at the moment, it’s worthwhile having a free consultation with an expert trader to discuss the different strategies and options you can employ to ensure you make the most of your currency.

If you need to buy or sell Euros, click here to send me a free enquiry.

Sterling vs. US Dollar;

It has been an interesting week for the U.S economy with rates dropping away steadily from what was around a three week high as demonstrated in the graph below:

The dollar has been gaining strength off the back of the issues in the Eurozone and much of the focus is away from the U.S. It is still viewed as a safe haven currency because of the fragility of the Euro and investors have been looking towards the greenback as an alternative to the single currency. Another reason for the Dollar‘s gain in momentum is due to the strengthening of the economy after some promising data came out last week. Gains in consumer spending, manufacturing and homebuilding, combined with fewer job losses, point to an economy that is weathering the turbulence in financial markets caused by the debt crisis in Europe.

The general feeling is positive and analysts believe that the U.S can get back to a position of strength, all be it gradually. “The economy looks to be getting better despite the continued drumbeat of negativity in financial markets,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. The gloomy outlook in Europe has benefited the dollar but there are still fears as to the extent the crisis will affect the U.S. A 9% jobless rate and political gridlock over deficit-cutting have hurt confidence, which may be a hurdle to a further pickup in the pace of growth.

The GBP/USD rates look like they are also being kept in check by the performance of the pound. As discussed in the report above there is discussion of more Quantitative Easing (QE) early next year, and the unemployment figures released recently in the UK look like they will quash any extensive gains.

Next week there is important retail sales and manufacturing data released in the U.S. This could be a good indicator of the prospects on the economy and where things are heading in the coming months. As we have seen recently it is a tough time to predict where the rates are going with the pound/dollar pairing. With the on-going European issues, and the continuing stalling growth in the US and UK economies it is vital to keep in touch with an expert trader, to take you through the various options that you have available to you to protect you in these trying times, and make sure that you make the most of your currency.

If you need to buy or sell US Dollars, click here to send me a free enquiry.

Weekly Economic Data that may affect exchange rates

Monday – UK data today comprises of House Price Data. There is no significant data from the Eurozone. The US also releases home sales data today, so the health of the UK and US housing markets will be in focus.

Tuesday – Public Sector borrowing figures are released for the UK today. In the Eurozone there are measures of Consumer confidence. The main data today comes from across the pond, with US Gross Domestic Product and Canadian Retail Sales. We also see the FOMC (US) minutes which can indicate future interest rate movements.

Wednesday – Today there is lots of data from the UK and EU. Starting with UK, we have PMI inflation data and mortgage approvals. We also have the minutes from the latest BoE decision to hold interest rates and QE – the minutes will show how the 9 member committee voted and what was discussed. In the EU, we have inflation data from Germany and the EU. In the USA jobs data is the order of the day, with Unemployment, Jobless Claims, and personal income data. We round the day off with New Zealand Retail Sales.

Thursday – US Markets are closed for Thanksgiving. In Germany we have various GDP measures, in addition to confidence measures. The UK also releases GDP data today, so with so much coming from the EU and UK we expect a choppy days trade for Sterling/Euro.

Friday – There is no data of note released today.

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.

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 gains after good Retail Sales data

2011-11-18T08:28:00.002Z

Friday 18th November 2011
Good morning. The Pound rose slightly yesterday, after unexpectedly strong UK retail sales data provided some rare good news on the economy, although the figures did little to alter the overall view that the outlook remained grim. Overnight data showing UK consumer confidence fell to a record low in October also reinforced the gloomy economic picture. At 08:30 am this morning rates are as follows:

• GBP/EUR 1.1703
• GBP/USD 1.5788
• GBP/AUD 1.5806
• GBP/NZD 2.0820
• GBP/CHF 1.4492
• GBP/CAD 1.6246
• GBP/ZAR 12.954
• GBP/JPY 121.21
• GBP/DKK 8.7069
• GBP/NOK 9.1633
• EUR/USD 1.3489

Pound gains on Retail Sales

Data released yesterday morning showed UK retail sales rose 0.6% last month, which was much better than expected as many analysts had predicted a fall. Despite the good data regarding consumer spending however, investors are bracing for more signs of weakness in the UK economy and these concerns have limited gains in the pound.

Many analysts expect the Pound will struggle to rise after the Bank of England cut its UK growth forecasts earlier this week in its quarterly inflation report. As I mentioned a few days ago, this leaves the door open for more quantitative easing where money is created to pump into the economy. This floods the market with pounds to stimulate growth but also devalues the Pound and pushes exchange rates lower.

Pound remains supported against the Euro

Despite a bleak outlook for the UK economy following the poor inflation report earlier in the week, analysts have said that the pound was likely to be supported against the single currency, given concerns of increasing contagion among euro zone sovereigns. This has been keeping the Euro weak, and rates around the €1.17 level. Without the EU debt problems, GBP/EUR rates would be around 5 points lower than they currently are.

Italian government bond yields remain around the critical 7% level, which is seen as unsustainable and also keeping the Euro weak.

Today's Data

We end the week with Canadian Inflation figures, and Producer Price Index data from Germany.

As usual on Monday I will take a detailed look at the movements in the currency markets this week, in addition to a full breakdown of economic data releases that could affect exchange rates.

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 falls on growth forecast and unemployment

2011-11-17T08:28:00.003Z

Thursday 17th November 2011
Good morning. The Pound hit a 1 month low against the US Dollar yesterday after the Bank of England cut its growth and inflation forecasts indicating more QE is on the way. EU debt worries pushed investors towards the safety of the dollar compounding the drop in GBP/USD rates, while the weaker Euro kept GBP/EUR rates supported just below €1.17. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1681
• GBP/USD 1.5738
• GBP/AUD 1.5621
• GBP/NZD 2.0577
• GBP/CHF 1.4493
• GBP/CAD 1.6105
• GBP/ZAR 12.820
• GBP/JPY 121.06
• GBP/DKK 8.6931
• GBP/NOK 9.1129
• EUR/USD 1.3463

Bank of England cut growth forecasts for UK

The UK's economic outlook has worsened and the economy could stagnate until the middle of 2012, the BoE said yesterday . Their quarterly inflation report showed Britain on the brink of contraction and forecast that inflation would eventually fall well below target. This suggests, as many expect, that it may add to its 275 billion pound asset purchase programme.

Further Quantitative Easing will flood the market with Sterling, and the prospect of this has weakened Sterling and pushed exchange rates lower against other currencies.

City analysts said that both lower growth and inflation forecasts showed the Bank would leave interest rates at the low level of 0.5% into 2013.

"The report both endorses market expectations that rates will stay on hold for the foreseeable future and suggests that more policy loosening will yet be needed," said Vicky Redwood, chief UK economist at Capital Economics.

UK unemployment at 17 year high

UK unemployment rose significantly in the 3 months to September to close to 3 million, as youth unemployment rose above 1 million. The Office for National Statistics (ONS) said the jobless rate hit 8.3%.

The number of people out of work and claiming Jobseeker's Allowance rose by 5,300 to 1.6 million in October. The news comes as the Bank of England's governor Sir Mervyn King said Britain's economy could stagnate until the middle of next year.

The poor figures have added to the view that the UK economy is stagnating, and this is being reflected in the lower value of Sterling. In fact, the only thing keeping the Pound supported to some extend is the fact that it's not the Euro! Investors are wary of investing in the EU and this has created some demand for Sterling that is keeping rates higher than they would otherwise be.
Today's Data

Today the UK releases Retail Sales figures. The US has various measures of jobless claims and unemployment.

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Pound weakens ahead of BoE inflation report

2011-11-16T08:37:00.000Z

Wednesday 16th November 2011
Good morning. Sterling fell against the US Dollar yesterday as investors were worried ahead of the Bank of England's Quarterly Inflation Report, which is expected to be dovish and clear the way for more monetary easing. Against the Euro however rates remain stable due to the EU debt crisis keeping the Euro weak. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1703
• GBP/USD 1.5795
• GBP/AUD 1.5583
• GBP/NZD 2.0538
• GBP/CHF 1.4501
• GBP/CAD 1.6177
• GBP/ZAR 12.8755
• GBP/JPY 121.50
• GBP/DKK 8.7075
• GBP/NOK 9.1051
• EUR/USD 1.3493

Sterling weakens ahead of BoE Inflation report

Today we have an inflation report by the Bank of England. Many in the markets expect it to be quite dovish, and pave the was for further monetary stimulus with the BoE pumping more money in the economy through Quantitative Easing. Such speculation is sterling negative as quantitative easing involves flooding the market with pounds to stimulate growth, reducing demand for the UK currency.

This has weakened Sterling and pushed exchange rates down against most currencies.

Pound remains stable against the Euro

Despite the focus on the BoE report weakening the Pound against other currencies, analysts said the key driver for investors remained the euro zone debt crisis as yields on benchmark Italian government bonds rose back above the critical 7 percent level on Tuesday. This has been keeping the Euro weak, and means GBP/EUR rates have not dropped like other currency pairs.

"Within Europe, sterling has a bit of a safe haven tinge but the bigger picture is of a slightly stronger dollar across the board," said RBS's Robson. "That's why cable is falling but not as quickly as euro/dollar is falling."

Many investors have sold the euro in favour of the pound this month on the view that UK assets are safer than some euro zone ones in light of the deepening debt crisis in that region. The weak Euro is therefore cheaper to buy, and exchange rates are close to an 8 month high as a result.

The Dollar has also strengthened due to it's safe haven status, and GBP/USD rates have fallen back into the $1.57's. This is only due to the EU crisis however, and not due to any fundamental strength in USD. Once focus shifts from the Eurozone we expect rates to recover back above $1.60.

Today's Data

In addition to the inflation report, unemployment figures from the UK today could affect Sterling. EU inflation figures may impact future EU interest rate decisions. In the USA we have various inflationary measures. There are also inflation figures from New Zealand today that could affect GBP/NZD rates.

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Pound gains vs Euro on Italy bond yields

2011-11-15T08:26:00.003Z

Tuesday 15th November 2011
Good morning. Sterling fell against the US Dollar yesterday, tracking losses in the euro against the safe-haven U.S. currency as deep-seated concerns about the euro zone's huge debt problems outweighed investor optimism over a new Italian government. This has weakened the Euro and pushed GBP/EUR rates up, but strengthened the USD pushing GBP/USD rates down. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1697
• GBP/USD 1.5914
• GBP/AUD 1.5607
• GBP/NZD 2.0540
• GBP/CHF 1.4515
• GBP/CAD 1.6212
• GBP/ZAR 12.774
• GBP/JPY 122.47
• GBP/DKK 8.7062
• GBP/NOK 9.1093
• EUR/USD 1.3598

Euro weakens on Italy bond yields

At the weekend we saw a new Prime Minister appointed in Italy, and in what was seen as the first test of his leadership, Italy sold 3bn euros of 5 year bonds yesterday. However, it had to pay more to borrow the money, a rate of 6.29%, indicating continuing unease in the markets.

Late last week, the level had soared to above 7%, the rate at which Greece, Ireland and Portugal were obliged to seek emergency bailouts from the EU. The rate of 7% is significant as that's where markets think they will be unable to repay the debts, increasing the chance of needing bailout funds.

As a result, the Euro weakened yet again and pushed GBP/EUR rates back to €1.17 this morning. The uncertainty also helped strengthen the safe haven US Dollar, pushed rates back towards $1.59.

German and French economies grow

Both the German and French economies recorded growth in the 3rd quarter, figures showed yesterday. Germany's GDP grew by 0.5%, and the French economy grew by 0.4%. Both of these were better than expected, but were overshadowed by the continuing debt problems, and so we still saw a net weakness in the Euro.

UK economy still a concern

The Bank is widely expected to cut its forecasts for UK growth, which could pose downside risks for sterling. Figures on UK employment and retail sales this week may put the pound under further selling pressure if they show the economic recovery is continuing to struggle. Markets still expect further Quantitative Easing in December or January, so the Pound remains vulnerable to more falls.

Today's Data

UK data today includes the Retail Price Index and Consumer Price index. In the EU we see GDP figures from Germany and the EU, and Economic sentiment survey from Germany and the EU, and EU Trade Balance figures. In the USA we see Retail Prices & Inflation data.

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Weekly GBP/EUR & GBP/USD and the weeks data

2011-11-14T07:00:00.000Z

Monday 14th November 2011
Good morning. As usual for a Monday, today I'm going to look at last weeks movements for our two most traded currency pairs GBP/EUR & GBP/USD. We'll also have a round up of the economic data to watch for that may affect rates for the coming week.

In this week’s Report:

• Pound/Euro rates briefly hit 8 month high
• Italy vote through austerity measures
• EU debt crisis continues to drive exchange rates
• 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 relinquished gains against a broadly recovering euro on last Monday, but its downside was limited as investors considered the pound a safer bet versus the single currency due to political instability in Greece and Italy, which are plagued by debt problems. Rates soared last week to an 8 month high, however the gains were short lived.

Some analysts recommended selling sterling citing recent weak UK survey indicators and downside risks to the economy that would hamper efforts to reduce the deficit also adding that they expected more quantitative easing from the BoE early next year, "We do not expect any significant turn in the weak sterling trend until there are meaningful improvements in the housing and banking sector, none of which have been seen yet".

Some in the market considered this a sign that investors expect the pound to fall further, while some analysts argued the figures show there is room for the pound to rise in the near future. Still, few expect significant gains in Sterling. A much stronger than expected UK house price survey last Monday failed to boost sterling much after previous week's poor UK purchasing managers' surveys on manufacturing and services highlighted the risk of recession.

Key Mid-week economic data from the UK turned out a bit of a non-event as the BoE decided to keep record low interest rates on hold at 0.5% and refrained from adding further QE for the time being. Despite domestic economic threats GBP/EUR rates hit an eight-month high as Italy's growing debt problems continued to hit the single currency. Rates rose to €1.1780, their highest since late February, and analysts suggest sterling's outlook versus the single currency continued to hinge on developments in the euro zone debt crisis.

To wrap up the week Sterling dropped some of its gains against the euro as focus remained on developments within the euro zone where Italy voted on austerity measures in a bid to convince European officials and bond markets that it can address its fiscal problems. After winning support in the Italian senate, the vote meant Prime Minister Silvio Berlusconi had to step aside for a new unity government. That prospect drove investors to unwind some of their bearish bets against the euro, lifting the shared currency versus Sterling and off the 8 month highs.

By and large last week was pretty good week for Sterling/Euro rates, and those who took advantage of its spike vs. the Euro, however volatility and uncertainty continue to surround the currency pair with developments in the Eurozone debt crisis acting as both friend and foe. At this stage Sterling isn’t too far off the 8 month highs and FWD buying Euro’s could still a viable and prudent option.

If you want the best exchange rates for Euros, make a free enquiry now.

Sterling vs. US Dollar;

Sterling had somewhat of a Jekyll and Hyde week last week. Whilst the Pound saw some major movements on the upside against an increasingly beleaguered Euro, the fortunes of the Sterling against the Greenback were almost exactly the opposite with very little movement all week long - and what little movement there was pushed the pound down against the Dollar.

Whilst the rest of the world focused on Italy and the rest of the Eurozone, the market didn’t seem to notice and react too much that year on year Retail sales in the UK were down 0.6% indicating continued sluggish consumption in the UK, prompting fears that this trend may continue to hinder British economic performance moving forward. However, on the upside for the UK the ‘National Institute of Economic and Social Research’ said on Tuesday that growth in the UK held steady at 0.5% for the 3 months to October calming speculation that the UK is heading towards another recession.

However, concerns about a very fragile recovery remained as data showed industrial output flatlined despite a modest rise in manufacturing. As expected, the Bank of England voted to keep interest rates at a record low 0.5% on Thursday and opted not to raise the amount set aside for the quantitative easing programme. Following the announcement Sterling edged slightly lower against Cable, however this was perhaps more to do with problems in the Eurozone which pushed more global funds out of other currencies and into the Greenback which is universally regarded as the world’s safe haven currency.

This Dollar strength naturally put pressure on Sterling which fundamentally still remains a relatively weak world currency, although perhaps not as weak as the Euro last week. Next week there is a raft of US and Anglo data released throughout the week although it is likely that again all eyes within the market will remain fixed on the Eurozone to see whether the crisis settles with a new Greek Premier in place and the probable exit of Berlusconi and new austerity measures implemented.

If you need the best exchange rates for US Dollars, make a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – A quiet start to the week, with the only data of note coming from the Eurozone in the shape of Industrial Production figures.

Tuesday – UK data today includes the Retail Price Index and Consumer Price index. In the EU we see GDP figures from Germany and the EU, and Economic sentiment survey from Germany and the EU, and EU Trade Balance figures. In the USA we see Retail Prices & Inflation data.

Wednesday – Unemployment figures from the UK today could affect Sterling. EU inflation figures may impact future EU interest rate decisions. In the USA we have various inflationary measures. There are also inflation figures from New Zealand today that could affect GBP/NZD rates.

Thursday – Today the UK releases Retail Sales figures. The US has various measures of jobless claims and unemployment.

Friday – We end the week with Canadian Inflation figures, and Producer Price Index data from Germany.

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Pound falls from 8 month high vs Euro

2011-11-11T08:28:00.002Z

Friday 11th November 2011
Good morning. The Bank of England didn't announce any further Quantitative Easing yesterday, but Sterling still dropped against the dollar and has also fallen against the Euro as worries about the euro zone drove investors to shed exposure to riskier currencies. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1668
• GBP/USD 1.5930
• GBP/AUD 1.5690
• GBP/NZD 2.0483
• GBP/CHF 1.4423
• GBP/CAD 1.6243
• GBP/ZAR 12.667
• GBP/JPY 123.25
• GBP/DKK 8.6828
• GBP/NOK 9.0384
• EUR/USD 1.3645

Bank of England leave interest rates and QE on hold

As expected yesterday the Bank of England left interest rates at a record low 0.5% and opted not to pump any more money into the economy through quantitative easing. Markets will now focus on next weeks inflation report which could reveal the extent of weak economic fundamentals in the UK, and this could mean more QE in December.

Pound falls vs Euro

Despite no further QE, the Pound has fallen against most currencies including the Euro. It's because of the problems in the Eurozone, and the uncertainty means investors have been shedding riskier currencies and heading for the safe haven US Dollar. This has pulled rates down slightly from the 8 month high seen yesterday.

Today's Data

Most markets are closed in the EU and US due to Armistice Day/Veteran's day. There are some inflation numbers from the UK.

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Sterling/Euro hits 8 month high on Italian Bonds

2011-11-10T08:35:00.002Z

Thursday 10th November 2011
Good morning.The Pound rose to an 8 month high yesterday against the Euro, after Italian bond yields rose to level of 7%, seen as unsustainable and taking the EU debt crisis to new levels. Sterling dell against the US Dollar however, as investors sought the safe haven status of the currency and by worries that the crisis in Britain's euro zone trading partners could push the UK economy back into recession. Rates at 08:30am are as follows:

• GBP/EUR 1.1753
• GBP/USD 1.5917
• GBP/AUD 1.5768
• GBP/NZD 2.0517
• GBP/CHF 1.4464
• GBP/CAD 1.6307
• GBP/ZAR 12.763
• GBP/JPY 123.47
• GBP/DKK 8.7469
• GBP/NOK 9.1246
• EUR/USD 1.3542

Italian Bond Yeilds weaken the Euro

Italy's cost of borrowing has touched a new record, a day after Prime Minister Silvio Berlusconi said he would resign once budget reforms were passed. The rate has risen to 7% which is widely seen as unsustainable, and Italy would not be able to repay debts at this rate. The net result is that investors fear that Italy could become the next victim of the debt crisis.

The euro fell almost three cents against the dollar and also fell against Sterling. The net result is GBP/EUR rates surging to their best since near the start of the year, and 5 points higher than just 2 weeks ago, creating excellent buying levels for those wishing to buy Euros.

If you need Euros in the next 6 to 12 months, contact us today to discuss our forward contracts, where you can lock in the current exchange rate, but only pay 10% of what you want to convert now, and the rest when you need your currency. This will protect you against a fall in the rate.

Bank of England meeting today

Today at 12:00pm the Bank of England will announce their interest rate and Quantitative Easing decisions. It's expected that the BoE will leave interest rates on hold, but there is a chance further QE will be pursued which could reverse the gains in GBP/EUR and push rates lower.

Also weighing on sentiment towards the pound, data on Wednesday showed Britain's trade deficit deteriorated much more than expected in September to 9.814 billion pounds, its widest since the series began in 1998.

The Confederation of British Industry said the risk of another recession had risen as it cut its forecasts for UK economic growth, although it believed Britain could avoid this. Consistent weakness in the UK economy prompted the Bank of England to adopt further quantitative easing last month, which is often considered currency negative as it involves flooding the market with pounds.

Today's Data

The busiest day of the week for data. Today the Bank of England announces their latest decision on interest rates. They are likely to be left on hold again, but some in the market predict there is a risk they will embark on another round of Quantitative Easing – if so expect GBP rates to fall.

In Australia we have employment figures. Germany releases inflation numbers which could drive EU interest rates. In the USA we will see Jobless numbers, a budget statement from FED.

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.

2011-11-09T08:31:00.002Z

Wednesday 9th November 2011
Good morning. Sterling rose against the US Dollar and the Euro yesterday, after the National Institute of Economic and Social Research (NIESR) said British economic growth held steady at 0.5% in the last 3 months. The news also that Italian PM Silvio Berlusconi is set to resign has weakened the Euro slightly. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1670
• GBP/USD 1.6093
• GBP/AUD 1.5570
• GBP/NZD 2.0257
• GBP/CHF 1.4454
• GBP/CAD 1.6272
• GBP/ZAR 12.710
• GBP/JPY 124.81
• GBP/DKK 8.6861
• GBP/NOK 9.0421
• EUR/USD 1.3785

UK GDP at 0.5%

NIESR's forecast of 0.5% growth yesterday helped calm fears that the UK could be slipping back into recession, though concerns about a very fragile recovery remained as data showed industrial output flatlined despite a modest rise in manufacturing.

"The forecast of GDP growth staying steady through to October from NIESR has supported sterling a little," said Lee McDarby, head of dealing for corporate and institutional treasury at Investec.

The figures helped push the Pound slightly higher against both the Euro and the US Dollar.

Silvio Berlusconi set to resign

Italian PM Silvio Berlusconi says he will not stand if Italy holds early elections, a day after promising to resign as soon as parliament passes urgent budget reforms.

"I will resign as soon as the law is passed, and, since I believe there is no other majority possible, I see elections being held at the beginning of February and I will not be a candidate in them," he said.

There are serious problems in Italy at the moment. It is a country of anaemic growth and a debt mountain of £1.6 trillion. There are fears the debt crisis will spread from Greece to Italy, and this has weakened the Euro and the reason exchange rates are significantly higher than they would otherwise be.

Today's Data

A few bits to watch for from the UK today: BRC Shop Prices, Trade Balance and Goods Balance. The Trade figures in particular could affect the value of the Pound. Not much else of interest today other than some Inflation data from New Zealand.

Tomorrow we have the BoE decision on whether to pump even more money into the economy through their Quantitative Easing programme.

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.

Get best exchange rates to buy Euros

2011-11-08T08:32:00.002Z

Tuesday 8th November 2011
Good morning. Political uncertainty is rife in the Eurozone. We have Greece attempting to put together a coalition government, and today Italys Prime Minister Silvio Berlusconi is facing a crucial vote on the budget, amid fears that Italy could be the next victim of the eurozone debt crisis. This has kept the Euro weak and helped push GBP/EUR rates and GBP/USD rates slightly higher. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1667
• GBP/USD 1.6065
• GBP/AUD 1.5557
• GBP/NZD 2.0169
• GBP/CHF 1.4502
• GBP/CAD 1.6314
• GBP/ZAR 12.723
• GBP/JPY 125.25
• GBP/DKK 8.6842
• GBP/NOK 9.0225
• EUR/USD 1.3764

Political Instability in the Eurozone

Borrowing costs for Italy's government have risen significantly due to fears it may be unable to repay its huge debts. Yesterday Berlusconi dismissed reports he planned to resign and today EU finance ministers are due to meet in Brussels for further talks on the debt crisis.

Concerns over Italy are overshadowing developments in Greece, where political leaders are wrangling over the formation of a new unity government to impose austerity measures in return for international loans. Stock markets across Europe bounced up on the chance of the Italian premier's departure but returned to negative territory at Monday's close.

Buying Euros at the best exchange rates

This has kept the Euro weak and GBP/EUR rates high. For those buying Euros, it's worth noting rates are relatively good at the moment, while only a few weeks ago trading levels were in the €1.12's. Some clients may wish to hold out hoping rates will rise further, but what do we need to see for rates to rise further?

What you need to see is strength in Sterling, or weakness in the Euro. The Pound is unlikely to strengthen any further as we have more Quantitative Easing on the way, high unemployment, rising inflation, low interest rates and stagnant growth that threatens to push the UK back into recession. So, not much here that will push the Pound higher.

On the Euro side, what else could we possibly see that would cause more weakness? We already have Greece on the brink of collapse, fears Italy and Spain will follow suit, all of which has already been priced in the market. It's these issues in the EU that are keeping rates where they are.

Strategies to employ to get the best Pound/Euro exchange rate

If you need to buy Euros then consider fixing the current rate with a Forward contract. This is where you can fix the current rate for up to 2 years, and only put down 10% of the total Sterling you want to convert. This then protects against adverse rate movements and allows you to budget.

If you do think that rates will rise further, then you should place a Stop Loss order. this is where you place an order to buy your currency if rates should fall below a pre-agreed level. In this way you can still aim for a higher rate, but have a worst case scenario should rates drop.

Employing strategies like this often help you get the best exchange rates, rather than just hope rates will move your way. Hope is not a reliable economic tool!

To discuss our best exchange rates, contact us now by clicking here.

Today's Data

Pretty busy for UK data: Retail Sales, House Prices, Manufacturing Production, Industrial Production and a GDP estimate. So lots today that could affect Sterling exchange rates. Australia releases Trade Balance numbers. From the Eurozone the only release of note is German Trade Balance figures. There are no significant US releases today.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-11-07T07:00:00.002Z

Monday 7th November 2011
Good morning. As regular readers will know, every Monday I take a detailed look at what has happened to exchange rates over the last week, in particular the GBP/EUR cross and GBP/USD cross, and also a detailed outline of economic data releases I think will affect exchange rates.

In this week’s Report:

• EU debt crisis dominates G20 Summit
• Greek turmoil continues – referendum or no referendum?
• ECB in surprise interest rate cut
• 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;

There were fireworks in the currency market last week following the announcement of a Greek referendum on the latest aid package to solve its debt crisis. With a bailout package agreed, the Euro had gained strength against the pound and at the start of the week GBP/EUR was hovering in the high 1.13’s. With the news of the referendum taking place as early as December the gains did not last long, GBP/EUR rocketed back the highs we saw a few weeks ago and for the remainder of the week we saw the rate trading around 1.16:

There was sense of relief last week as EU leaders emerged from late-night talks, hammering out the deal which would write off half of Greece's debt and give another €100bn to the country in new bailout funds. But in one stroke, that relief turned to panic as the whole agreement was threatened with disaster and markets worldwide plummeted. This was all thanks to the astonishing announcement by Greek Prime Minister Papandreou that a public referendum would be held on whether Greece should accept this latest debt deal.

The announcement was coldly received by German Chancellor Angela Merkel and French President Nicolas Sarkozy, bringing accusations the move would intensify the euro zone crisis.
On Thursday there was news the referendum had now been scrapped, amid calls for Mr Papandreou to resign. The developments have overshadowed a key G20 meeting in Cannes. Eurozone leaders fear that failure to solve the Greek debt crisis could risk it spreading to other vulnerable economies, particularly Italy.

Germany had said a referendum would essentially be a vote on whether Greece wanted to be part of the EU and that the stability of the Eurozone was more important than Greek membership. Last week’s events saw a rise in the number of forward contracts being booked as clients look to take advantage of the unexpected rise.

As we have seen over the last few weeks, the continued volatility in the foreign exchange markets has provided huge swings in the exchange rate. With all the economic uncertainties across the Europe exchange rates are likely to remain extremely unstable over the next few weeks, therefore if you are buying or selling Euros in the next 6 months, contact us today for a free consultation.

Sterling vs. US Dollar;

GBP/USD rates dropped off from what was almost a seven week high on Tuesday with Greece's shock decision to hold a referendum on an EU bailout. This news pushed investors towards the relative safety of the US Dollar which strengthened causing GBP/USD rates to fall away.

Much of the attention is back at home in the States as Obama’s Democrats battle Republicans to agree deep deficit cuts amid high U.S. unemployment - something that could hold the key to his hopes for re-election next year. For this reason President Barack Obama has ruled out any grand financial gesture for Europe at the moment but backs were raised at the White house during last week from comments made at the G20 summit.

There is a suggestion that U.S. power within the G20 has diminished with the budget woes back home and Europe appear to look toward an economically self-confident China for help. White house aide Michael Froman went on the defensive saying that "Our ability to contribute, our ability to lead and our ability to influence the outcome of these sorts of issues is not tied necessarily to having the American taxpayer pay for every problem,"

Washington has made no suggestion that it might come to Europe's aid. Instead, the White House argues Europe has the resources to help itself and whilst the U.S economy is the largest in the World, it means that Capital Hill’s views still carry great weight.

Key data was released on Friday with Non-farm payrolls and Unemployment figures published. The U.S. added 80,000 new jobs in October and the unemployment rate fell to a six-month low of 9% from 9.1%. Even though the data was positive for the economy it was less than had been forecast. These figures caused the dollar to only make minimal gains against the pound and analysts agree that job creation needs to be a lot faster to make a dent in the unemployment rate
Last week ended with GBP/USD rates hovering around $1.60 (interbank).

Worries about the fragility of the UK economy continued to weigh heavily on the cross with Sterling unable to gain any real momentum against the dollar. Lee Hardman, currency economist at BTMU said - “It is difficult to envisage it breaking higher when the UK looks like it may be on the verge of recession,".

The situation continues to hang in the balance with both the U.S and U.K. economies tied in to any sort of resolution in Europe. It is difficult to know what will happen, but what we do know is that timing is essential to making the most of your currency. If you are looking at purchasing or selling currency in the coming weeks, months or years click below to open a free, non-obligation trading facility and let a currency specialist talk you through these volatile times.

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Weekly Economic Data that may affect exchange rates

Monday – EU Retail Sales are released today which reflect how confident consumers are about the economy. Other than that there are some German industrial Production figures. There is no UK data today.

Tuesday – Pretty busy for UK data: Retail Sales, House Prices, Manufacturing Production, Industrial Production and a GDP estimate. So lots today that could affect Sterling exchange rates. Australia releases Trade Balance numbers. From the Eurozone the only release of note is German Trade Balance figures. There are no significant US releases today.

Wednesday – A few bits to watch for from the UK today: BRC Shop Prices, Trade Balance and Goods Balance. The Trade figures in particular could affect the value of the Pound. Not much else of interest today other than some Inflation data from New Zealand.

Thursday – The busiest day of the week for data. Today the Bank of England announces their latest decision on interest rates. They are likely to be left on hold again, but some in the market predict there is a risk they will embark on another round of Quantitative Easing – if so expect GBP rates to fall. In Australia we have employment figures. Germany releases inflation numbers which could drive EU interest rates. In the USA we will see Jobless numbers, a budget statement from FED.

Friday – US Markets are closed for Veterans Day. The UK releases various measures of inflation.

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EU Cut interest rates, Greek farce continues

2011-11-04T08:29:00.002Z

Friday 4th November 2011
Good morning. Sterling rose against the Euro yesterday and also rose from a 2 week low against the US Dollar, helped by the European Central Bank's surprise decision to cut interest rates, which supported riskier assets. There is also uncertainty in Greece where there will now not be a referendum on the bailout, as the prime minister said he would scrap the move if the conservative opposition party voted to pass the bailout package in parliament. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1587
• GBP/USD 1.5999
• GBP/AUD 1.5420
• GBP/NZD 2.0183
• GBP/CHF 1.4165
• GBP/CAD 1.6213
• GBP/ZAR 12.5804
• GBP/JPY 124.84
• GBP/DKK 8.6226
• GBP/NOK 8.9615
• EUR/USD 1.3803

ECB cut interest rates

The European Central Bank (ECB) surprised the markets yesterday when they cut eurozone interest rates to 1.25% from 1.5%. The new ECB president Mario Draghi told a news conference that growth in the eurozone was likely to remain weak. He said that Europe's financial crisis and a slowdown in global growth meant the euro area faced an "environment of high uncertainty".

Usually an interest rate cut would weaken a currency due to the lower return on offer, however in the current volatile market, the move actually supported riskier currencies, and the development that there will now not be a referendum in Greece actually strengthened the Euro slightly, and exchange rates dropped back in the €1.15's.

Greece farce continues

The second day of the G20 meeting today will see the Greek prime minister George Papandreou face a confidence vote in parliament. The opposition have called for him to quit after his decision earlier this week to hold a referendum on the bailout sparked a turmoil on financial markets and upset both Germany and France.

Yesterday however he said he would scrap the move if the conservative opposition party voted to pass the bailout package in parliament. However, there are fears that he may lose the confidence vote and Greece may have to hold fresh elections, a move which may further delay the implementation of a Greek bailout package.

The mess in Greece caused some turmoil in the markets. Initially after the interest rate cut GBP/EUR rates rose but after the news from Greece, rates fell back away again as the threat of a referendum on whether Greece stays in the Euro subsided and calmed the markets.

Sterling still at risk however due to poor economic outlook

Despite the latest rise for Sterling, analysts said that the Pounds prospects are not looking very good, with the National Institute of Economic and Social Research lowering growth prospects.

They said there is now a 50% chance of a new recession and that is likely to ramp up expectations of more quantitative easing from the Bank of England in coming months. The Monetary Policy Committee will meet next week and the chances are it may consider more easing.

More QE would weaken Sterling and lower exchange rates.

Today's Data

The G20 meeting continues today. From the Eurozone we have further inflation numbers, this time the Producer Price Index. In Canada there are Unemployment and Building permit figures. In the USA we will see Non-farm payroll & unemployment data.

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Eurozone in crisis ahead of Greek vote

2011-11-03T08:30:00.003Z

Thursday 3rd November 2011
Good morning. Sterling rose slightly against the US Dollar and Euro yesterday, as the Greek referendum took centre stage and weakened the Euro. Markets' focus turns to monetary policy meetings in the U.S. and Europe today, and also the G20 meeting where Europe's escalating debt crisis is set to be the main subject of discussion. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1623
• GBP/USD 1.5923
• GBP/AUD 1.5551
• GBP/NZD 2.0281
• GBP/CHF 1.4121
• GBP/CAD 1.6210
• GBP/ZAR 12.8013
• GBP/JPY 124.20
• GBP/DKK 8.6462
• GBP/NOK 9.0396
• EUR/USD 1.3700

Eurozone in crisis ahead of Greek vote

The eurozone has been plunged into renewed turmoil by Greece's decision to hold a referendum on the EU's offer to bail out its stricken economy. EU leaders fear that should Greece deliver a "no" vote it may plunge the country into a disorderly default and spread financial contagion to Italy and Spain. The developments have weakened the Euro and pushed rates higher in the last few days.

Last month the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) said they had reached agreement with Greece on reforms to put the nation back on track. They have now however suspended the next bailout of €8bn in and called on Athens to decide whether or not to remain in the eurozone.

Eurozone leaders fear that should Greece deliver a "no" vote it may plunge the country into a disorderly default and spread financial contagion to Italy and Spain.

EU Interest Rates today

At 12:45pm we have the ECB interest rate decision. Rates will probably be left on hold, but in the press conference afterwards watch for any sign rates may be cut in the coming weeks. Any negative comments could weaken the Euro and push GBP/EUR rates higher.

China's EU aid in doubt

China has said it cannot commit to investing in the European Financial Stability Fund (EFSF) until the situation with Greece has been clarified. European leaders hoped that China would buy EFSF bonds, injecting capital in the region's financial markets. The EFSF was one part of a three pronged rescue plan put together to solve eurozone's debt crisis.

UK at risk of falling back into recession

There is a strong chance the UK will fall back into recession even if eurozone leaders find a resolution to the debt crisis. NIESR said that whatever the outcome of the G20 meeting, the UK could well return to recession by the end of 2012. This could of course weaken Sterling and push rates lower.

Today's Data

Australian retail sales are released today. There is the G20 meeting also that may throw up a few surprises. In the USA there are jobless numbers. In the EU we have an interest rate decision followed by a press conference – this often causes swings in GBP/EUR rates

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Sterling vs Euro forecast hits 1 month high

2011-11-02T08:25:00.002Z

Wednesday 2nd November 2011
Good morning. Sterling rose to a 1 month high against the Euro yesterday after Greece's decision to hold a referendum on an EU bailout. This highlighted concerns that the debt crisis is far from over and weakened the Euro. This also pushed investors towards the relative safety of the US Dollar which strengthened causing GBP/USD rates to drop. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1618
• GBP/USD 1.6010
• GBP/AUD 1.5376
• GBP/NZD 2.0073
• GBP/CHF 1.4135
• GBP/CAD 1.6244
• GBP/ZAR 12.782
• GBP/JPY 124.97
• GBP/DKK 8.6430
• GBP/NOK 9.0200
• EUR/USD 1.3776

Sterling hits 1 month high vs Euro

Only a week ago there seemed to be a resolution to the debt crisis when EU leaders voted through measures to help Greece. This had strengthened the Euro and pushed GBP/EUR rates down in the low 1.13's. However it now seems that the prospect of a swift end to the euro zone's debt crisis is not as secure as first thought, after the Greek Prime Minister called a referendum on the latest bailout package, drawing calls from within his own party to step down.

This caused the Euro to weaken again, highlighting how volatile the currency markets are to any bad news. The euro fell against sterling pushing rates to their highest in nearly a month.

Against the US Dollar however, the bad news from the EU pushed investors back to the safe haven US Dollar, strengthening it and making it more expensive to purchase. Also adding momentum to the pound's slide against the dollar was an unexpected contraction in UK manufacturing activity. This has drawn attention to concerns about the economic outlook despite slightly better GDP figures yesterday. This weakened the Pound slightly.

The UK economy may be on the brink of recession according to data showing manufacturing contracted at its fastest pace in more than two years. There are further PMI figures today and if the are also weak, this will likely weaken Sterling further.

Today's Data

Today we see the minutes from the US decision to hold interest rates. Staying in the states we also see mortgage applications, employment data, and at 16:30 there is an interest rate decision. There is little UK data today other than PMI construction. There is a lot to watch out for from the Eurozone: German unemployment in addition to German and EU inflation data.

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Pound vs Euro exchange rates rise November 2011

2011-11-01T08:25:00.004Z

Tuesday 1st November 2011
Good morning. Sterling has surged against the Euro, rising by nearly 3% since last week, and has now sitting in the mid €1.16's. The Pound is being driven by external factors: investor perception about the US Dollar and Euro, in addition to the intervention by the Japanese has pushed the dollar higher and strengthened Sterling. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1666
• GBP/USD 1.5967
• GBP/AUD 1.5445
• GBP/NZD 2.0027
• GBP/CHF 1.4192
• GBP/CAD 1.6138
• GBP/ZAR 12.851
• GBP/JPY 124.68
• GBP/DKK 8.6811
• GBP/NOK 9.0108
• EUR/USD 1.3687

Sterling rises against Euro November 2011

The Pound has risen well against the Euro so far this week, with European markets opening lower this morning, following an announcement yesterday on a Greek referendum on the latest aid package to solve its debt crisis. Eurozone leaders had agreed a €100 billion loan to Athens and a 50% debt write-off last week, however the announcement of a referendum has cast doubt on whether the deal will be able to go ahead.

This has weakened the Euro, and made it cheaper to purchase. Sterling vs Euro exchange rates have surged as a result, and we are now sitting not far from €1.17, when only last week rates nearly dropped into the €1.12's.

If you need to buy Euros, you should consider locking in the current rate with a Forward contract. this is where you can lock in the current rate for up to 2 years, but only lodge 10% of the total amount of Sterling you need to convert. You will then be protected against a drop in rates. Click here to send us a free enquiry about Forward Contracts.

UK Gross Domestic Product today

This morning at 09:30am we will see the UK's GDP figures. This will show how the economy is growing and we expect a 0.3% gain in the 3 months until September. If the figure is lower than this however, then expect Sterling exchange rates to drop.

The other concern is further Quantitative Easing by the UK. This could also weaken the Pound, and so we think the gains in GBP/EUR will be short lived, making it even more important to contact us to discuss forward contracts if you need to buy Euros in the next 6 months.

US Dollar weakens

US brokerage firm MF Global has filed for Chapter 11 bankruptcy protection after revealing £4bn of eurozone debt exposure. MF Global worried markets last week after disclosing a $191.6m quarterly loss. This saw its shares fall by two thirds, and its credit rating cut to junk.

The result for exchange rates is the Dollar weakened pushing GBP/USD rates higher, however the issues in Europe have now swung the pendulum the other way: weakness in the Euro drives investment towards the US Dollar, and this has created strength this morning pushing rates back below the $1.60 mark.

Today's Data

Australia releases House Price data and there is also an interest rate decision. In the UK we will see Gross Domestic Product figures – these are important as it shows at what rate if any the economy is growing. There is some minor construction data from the USA.

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2011-11-01T08:25:00.001Z

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Weekly GBP/EUR & GBP/USD and the weeks data

2011-10-31T07:00:00.001Z

Monday 31st October 2011
Good morning. It's Halloween, and it will be interesting to see if the markets are still 'spooked' over the debt crisis, or if last weeks late night agreement will help stabilise the Euro and 'raise Greece from the dead'. Today we will have a detailed look at the movements in Sterling/Euro and Sterling/US Dollar over the last week, and the forecast and predictions for where rates may be headed.

In this week’s Report:

• EU summit agreement strengthens Euro, pushing GBP/EUR lower
• GBP/USD hits 7 week high on dollar weakness
• Uncertainty over further QE keeps Sterling at risk
• 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;

All eyes were focused on the outcome of the EU Summit meeting last week. GBP/EUR started the week around the €1.15 level, and stayed relatively steady until Wednesday’s EU leaders meeting in Brussels; they agreed to expand the Euro zone’s main bailout fund to 1 Trillion Euros. Banks also accepted a 50% ‘hair cut’ of Greece’s debt. Following the announcement we saw a drop of nearly 1.5% with a low of the day being €1.1326 as the Euro gathered strength and became more expensive to purchase.

Earlier in the week, Sterling didn't react very much on Tuesday after comments from the Bank of England Governor Mervyn King; King said they had come very close to restarting QE in September but held off to see if volatility would subside, before taking the decision to resume in October. Recent economic data has shown a darkening outlook forcing people to cut back on spending.

The real volatility started mid week, with EU Leaders agreeing to expand the single currency's bailout fund to 1tn euros and to take measures to recapitalise banks. Under the terms of the Brussels deal, banks must raise more capital to protect themselves against losses resulting from any future defaults. Markets seemed to react positively to the news, with the Euro gaining strength and exchange rates reached the low 1.13’s as a result.

In addition to the Euro and riskier currencies rising, Banks also performed well, underlying the fact that global investors think the deal will finally help to end speculation on what will happen over Greek debt.

A Co-ordinated approach is going to be needed for all involved within the Eurozone. The debt crisis is a double-edged sword for sterling/euro rates – as a risky currency closely tied to the Eurozone, the Pound has gained a little strength on the news. However, the Euro has also gained and the net result is lower exchange rates.

As the Euro has fallen and there are further concerns over how this latest round of QE will affect the cross, it will be interesting to see how the GBP/EUR will react and which currency will be shown to be the strongest or even the most resilient to slow economic growth.

With uncertainty remaining over the direction of Sterling/Euro, if you need to buy or sell Euros, send us an enquiry now by clicking here, and find out how to get the best exchange rates.

Sterling vs. US Dollar;

Sterling steadied against the Dollar on Friday, staying just shy of a seven-week high, with markets taking a breather following a huge rally in riskier assets the previous day after a deal was struck on Europe's debt crisis. Sterling entered Friday steady at $1.61 versus the Dollar, not far from a peak of $1.6140 hit on Thursday when equities and riskier currencies rallied after the Eurozone deal and as solid U.S. growth data eased concerns about the global economy. Analysts have said that a weekly close around $1.6140 may signal the potential for further gains towards $1.63.

A survey by GfK NOP (National Opinion Polls) on Friday showed British consumer confidence fell to its lowest level since February 2009, adding to evidence that the economy risks returning to recession. Bank of England policymaker Paul Fisher said on Thursday there was a significant chance the UK could suffer another recession and more asset purchases could be necessary after the current round is completed.

"Dovish comments from BoE's Fisher yesterday morning held back Sterling’s gains versus the Dollar, and Sterling underperformed during the recovery in risk sentiment," commented analysts at Lloyds.

Earlier this month the BoE embarked on a second round of Quantitative Easing aimed at stimulating lacklustre economic growth. QE involves flooding the market with pounds which is seen as a negative for the currency as it dampens demand. This may be the case, however some analysts stated that despite a weak UK economic outlook, Sterling would remain supported against the Dollar due to the fact that further QE in the UK has already been announced, while speculation over more monetary easing from the U.S. Federal Reserve has picked up in recent weeks.

If anyone is left scratching their head as to why the Greenback has toppled, they should ask themselves one question: why would I buy the US currency? If we look for the basic appeal of the unit, we lack yield (the Fed base rate is on hold until mid-2013), growth is on par with the lacklustre global pace, the money supply has been flooded and the world’s largest economy is considered the lender of last resort for the rest of the world.

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Weekly Economic Data that may affect exchange rates

Monday – A new week. UK data starts with Consumer Credit, Money Supply and Mortgage Approvals. In the EU we have Unemployment data and Inflation numbers. Australia has some Private Sector credit data. In Canada we will see Gross Domestic Product figures.

Tuesday – Australia releases House Price data and there is also an interest rate decision. In the UK we will see Gross Domestic Product figures – these are important as it shows at what rate if any the economy is growing. There is some minor construction data from the USA.

Wednesday – Today we see the minutes from the US decision to hold interest rates. Staying in the states we also see mortgage applications, employment data, and at 16:30 there is an interest rate decision. There is little UK data today other than PMI construction. There is a lot to watch out for from the Eurozone: German unemployment in addition to German and EU inflation data.

Thursday – Australian retail sales are released today. There is the G20 meeting also that may throw up a few surprises. In the USA there are jobless numbers. In the EU we have an interest rate decision followed by a press conference – this often causes swings in GBP/EUR rates.

Friday – The G20 meeting continues today. From the Eurozone we have further inflation numbers, this time the Producer Price Index. In Canada there are Unemployment and Building permit figures. In the USA we will see Non-farm payroll & unemployment data.

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/Euro lower after deal. Outlook/Forecast

2011-10-28T08:26:00.003+01:00

Friday 28th October 2011
Good morning. Sterling hit a 7 week high yesterday after the EU rescue deal, but fell sharply against the Euro. The EU agreement bolstered market sentiment, strengthening the Euro significantly against the Pound, and it also buoying equities and perceived riskier currencies such as Sterling. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1349
• GBP/USD 1.6076
• GBP/AUD 1.5065
• GBP/NZD 1.9651
• GBP/CHF 1.3882
• GBP/CAD 1.5946
• GBP/ZAR 12.4197
• GBP/JPY 121.87
• GBP/DKK 8.4467
• GBP/NOK 8.7084
• EUR/USD 1.4161

EU rescue deal strengthens the Euro

In negotiations in Brussels on Wednesday, euro zone leaders struck a deal for private banks and insurers to accept a 50% loss on their Greek government bonds, and agreed to beef up the region's rescue fund by €1 trillion. Yesterday this had a significant effects on exchange rates, with big swings for major currency pairs.

The Euro gained strength as the markets seemed to like the deal. This pushed GBP/EUR rates quite a bit lower in the mid €1.13's. The news also strengthened riskier currencies such as Sterling. As a result the Pound was up slightly against the US Dollar.

Safe haven currencies like the Dollar weakened, as market sentiment increased and investors moved away from the safe haven US Dollar. This pushed GBP/USD rates to a 7 week high briefly breaking the $1.61 barrier.

"The fact that EU leaders, who have disappointed on so many occasions before, have agreed a framework and avoided a disorderly, involuntary Greek default has been taken by the market as a positive," said Gavin Friend, currency strategist at nabCapital

Risks to Sterling remain

Earlier this month the BoE embarked on a second round of quantitative easing to try and boost growth. QE involves flooding the market with pounds which is seen as a negative for the currency as it dampens demand. A Confederation of British Industry distributive trades survey on Thursday showed the decline in UK retail sales eased off in October, although the underlying trend remained weak.

It also followed a survey on Wednesday showing British factory orders fell at their fastest pace in a year in October, which stoked fears the economy may tip back into recession.

However, some analysts said despite a weak UK economic outlook sterling would remain supported against the dollar due to the fact further QE in the UK has already been announced, while speculation over more monetary easing from the U.S. Federal Reserve has picked up in recent weeks.

Today's Data

A quiet end to the week with no data of note from the UK or EU. Most data is US based including inflation data and consumer sentiment information.

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EU Deal agreed, GBP/EUR rates fall

2011-10-27T08:26:00.003+01:00

Thursday 27th October 2011
Good morning. Leaders from all 27 European Union nations have finally thrashed out a deal to solve the crisis started by concern over how Greece would cope with its debts. We'll look at the details of the deal shortly, but in short the net effect is a stronger Euro, pushing GBP/EUR rates lower by a point already. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1424
• GBP/USD 1.5999
• GBP/AUD 1.5190
• GBP/NZD 1.9805
• GBP/CHF 1.3992
• GBP/CAD 1.5983
• GBP/ZAR 12.5133
• GBP/JPY 121.42
• GBP/DKK 8.5032
• GBP/NOK 8.7618
• EUR/USD 1.4002

Eurozone deal agreed

The eurozone have finally agreed a deal on expanding the bailout fund and banks taking losses on Greek debt in exchange for recapitalisation. The news last night was greeted positively by the markets, with shares gaining in Asia overnight, and the Euro gaining strength of around 1% against the US Dollar, and around 0.6% against Sterling, pushing GBP/EUR rates lower.

The reason Pound vs Euro rates didn't fall more is because Sterling has also strengthened slightly on the news, due it's close ties to the Eurozone and the fact it's a risky currency.

Greece, the Irish Republic and Portugal have all required bailouts and this last week of talks was prompted by fears the crisis would spread to the larger economies of Spain and Italy. I'm actually surprised there was a resolute announcement last night, as we were expecting more of a woolly agreement with no clear details being shown for a few weeks.

However, late on Wednesday night and early on Thursday morning, the EU leaders meeting in Brussels agreed to expand the eurozone's main bailout fund to 1 Trillion Euros. Banks also accepted a loss of 50% on Greek debt, and they must raise more capital to protect themselves against losses resulting from any future defaults.

EU leaders said measures to restore confidence in the bloc's banks "are urgently needed and are necessary in the context of strengthening prudential control of the EU banking sector".

It will be interesting to see if this is the final word on the crisis, or if it is just another temporary measure that will not last. For the moment markets like the news, and as a result Pound Euro rates are falling.

Today's Data

Inflation figures today are released by Germany. Staying in the EU we will see Money Supply data. Of course the on-going debt crisis will continue to be the main driver in the value of the Euro. In the UK there are consumer confidence figures. In the USA markets will be closely watching the numbers released at lunchtime: Gross Domestic Product, Home Sales and Unemployment data.

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How will EU debt summit affect exchange rate forecast

2011-10-26T08:27:00.003+01:00

Wednesday 26th October 2011
Good morning. The Pound fell slightly yesterday, as riskier currencies such as Sterling came under pressure amid uncertainty as to whether policymakers will take major steps to tackle the euro zone debt crisis. It was announced yesterday that meeting of EU finance ministers which was to have preceded the leaders' summit was postponed, throwing doubt over a resolution. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1500
• GBP/USD 1.6021
• GBP/AUD 1.5427
• GBP/NZD 2.0088
• GBP/CHF 1.4036
• GBP/CAD 1.6226
• GBP/ZAR 12.6774
• GBP/JPY 121.55
• GBP/DKK 8.5599
• GBP/NOK 8.8482
• EUR/USD 1.3926

EU debt summit - how will this affect exchange rates?

European Union leaders are gathering again today for an emergency summit in Brussels hoping to finalise details of a plan to tackle the eurozone debt crisis. There are fears that the Greek debt crisis could spread to Italy and Spain, and this has caused market turmoil in recent weeks and months.

It was announced yesterday that the meeting of Finance ministers scheduled for today had been cancelled, rumoured to be because of disagreement between the main powers. The leaders summit will still take place, but it's uncertain what if anything will be agreed today.

There were already some points of agreement reportedly reached at the weekend by EU officials, and there is a detailed report on this on the BBC site here. With regards to the currency markets, if an agreement is reached that the markets like, then it will likely strengthen the Euro and also riskier currencies such as the Pound. If however there is continued disagreement and no plan agreed, it's likely the Euro and Pound will remain weak, and safe haven currencies such as the US Dollar will strengthen.

Sterling also at risk on BoE comments

Sterling didn't react very much yesterday after comments from Bank of England Governor Mervyn King, who testified in front of the House of Commons Treasury Select Committee, explaining the Bank's decision to resume asset purchases this month.

King said the Monetary Policy Committee had come very close to restarting QE in September but held off to see if volatility in financial markets would subside, before taking the decision to resume in October. Recent data has underlined a darkening economic outlook which could force consumers to deleverage and cut back on spending. This could weaken the Pound further, but markets are purely focused on the EU debt summit at the moment, which is why there was not as much reaction as would normally be the case.

Today's Data

The debt summit of EU leaders will take centre stage today. Other than that, the only UK data today is the CBI industrial trend survey. In the USA there are various releases regarding Home Sales. New Zealand has an interest rate decision and trade balance figures that may affect GBP/NZD rates.

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Pound steady ahead of EU debt summit meeting

2011-10-25T08:23:00.003+01:00

Tuesday 25th October 2011
Good morning. There was cautious optimism in the currency markets yesterday, with European leaders expected to hammer out a solution to the debt crisis over the next few days. This helped push Sterling to a 6 week high against the US Dollar, but it fell against the AUD and Euro slightly. Today we'll take a look at how the EU debt summit may affect Sterling exchange rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1496
• GBP/USD 1.5985
• GBP/AUD 1.5277
• GBP/NZD 1.9891
• GBP/CHF 1.4095
• GBP/CAD 1.6013
• GBP/ZAR 12.627
• GBP/JPY 121.62
• GBP/DKK 8.5576
• GBP/NOK 8.8346
• EUR/USD 1.3901

Markets steady ahead of EU debt summit

At the summit at the weekend the EU neared an agreement and they came closer to a deal to leverage the euro area's rescue fund. This helped calm the markets slightly. However a final decision was put off until the second meeting tomorrow, and significant differences remain over the size of losses holders of Greek government debt will have to book. It's a volatile time and tomorrows decisions will have a big impact on exchange rates for Sterling against other currencies.

"Sterling does look vulnerable, especially against the dollar in the coming days and months. The UK is exposed to the euro area and markets are trading on hope rather than any concrete action from euro zone policymakers," said Raghav Subbarao, currency strategist at Barclays Capital.

"A lot of the good news has already been priced in, so there is a risk of disappointment in the euro and currencies tightly correlated to the euro. Whatever they announce on Wednesday, it is unlikely to translate immediately into policy."

Most analysts expect Sterling/Euro rates to fall if an agreement is reached, as it will strengthen the Euro and make it more expensive to purchase.

What about the Pound vs other currencies such as the Australian Dollar?

Many investors see a rough ride ahead in coming months after Bank of England policy committee minutes last week hinted that more quantitative easing may be needed to prop up the UK economy. QE involves flooding the market with pounds and increasing the central bank's balance sheet, a move which is usually bearish for the currency.

Due to this, we expect rates to dip against the AUD in the coming weeks, especially as the antipodean currencies gain strength due to a rise in commodities. We said GBP/AUD fall nearly a point during trading yesterday, despite a boost for riskier currencies such as Sterling.

Today's Data

UK Mortgage approvals are released today, in addition to current account data from the ONS. There are consumer confidence figures from Germany. Further afield we have an Interest rate decision in Canada, and Housing Prices and confidence data from the USA.

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Weekly GBP/EUR & GBP/USD and the weeks data

2011-10-24T07:00:00.002+01:00

Monday 24th October 2011
Good morning. As always on a Monday, today we take a detailed look at the last weeks movements in GBP/EUR, GBP/USD and the weeks economic data.

In this week’s Report:

• EU debt crisis continues to affect GBP/EUR rates
• European Leaders hold summit to discuss solution
• Further Quantitative Easing possible for the UK
• 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 began the week at a five-week low versus the Euro on speculation the European Union will decisively address the region's debt crisis this week. Sterling fell as low as 1.1360, its weakest since early September.

Surprise inflation data showed UK consumer prices rose 0.6% last month. That took the annual rate of consumer price inflation to 5.2%, a three-year high. The higher inflation was due to soaring utility bills and not really a sign of increased economic activity. Instead rising prices are likely to further depress consumer spending while fiscal austerity measures also impact growth prospects and further complicate the task ahead for UK politicians and policymakers keeping concerns about stagflation very much alive. Stagflation combines rising prices and slow economic growth, historically a mix of weak growth and high inflation is negative for a currency.

On Wednesday the BoE's October meeting minutes showed policymakers voting unanimously to resume quantitative easing (QE), and considered injecting even more than the 75 billion pounds agreed. In a speech, BoE Governor Mervyn King defended the decision to launch another round of quantitative easing, citing a slowing world economy, especially in the euro zone, as threatening the recovery of the UK economy. “The minutes reinforce the view that the BoE is really concerned about the international environment and they stand ready to do more QE rather than less," said Kiran Kowshik, currency strategist at BNP Paribas.

Sterling received a late boost on Friday as rumours of a divide between France and Germany emerged ahead of an EU Summit designed to deliver a solution to the debt crisis. Despite the climb, Sterling and other perceived riskier currencies could be vulnerable to shifts in risk sentiment in the run up to the EU summits which Policymakers hope will make progress in tackling the euro zone debt crisis however remain deeply divided.

So, what now for Sterling and Euro? Well, The Bank of England seems to be prioritising growth, which leaves the door open for more QE, which risks devaluing the currency further. The EU summit which took place yesterday and concludes on Wednesday could result in a deadlock and if there is no resolution to the Eurozone debt crisis we could see the Euro fall.

Do you need to buy or sell Euros? Contact us today.

Sterling vs. US Dollar;

The start of last week saw Sterling fall 0.25% against the US Dollar after Germany surprised the market by saying that there are no quick fixes to the Eurozone debt crisis.

Sterling was also weighed down by a report from Ernst & Young’s ITEM Club, which urged the Bank of England to cut interest rates to virtually zero from a current record low of 0.5%, saying that the recovery has completely stalled and that additional QE is pointless, since prior attempts failed to stimulate business investment. A separate report from the Centre for Economics and Business Research (CEBR) said that the central bank was right to expand asset purchases, warning that Britain would be at a virtual standstill until the start of 2013.

The Pound slipped further following the release of UK inflation data on Tuesday. The year-on-year UK consumer price index accelerated to 5.2%, caused mainly by the recent increases in the cost of gas and electricity. Core CPI, which strips out volatile food and energy prices, rose to 3.3%, up from 3.1% in August.

Towards the middle of the week we saw a complete reversal in Sterling’s fortunes, as investors moved towards riskier assets. After a dovish report from the Bank of England, Sterling rose on the view that a solution to the eurozone crisis would be presented at the weekend’s EU summit.

Sterling’s gains were only short-lived however, as troika leaders warned that time is running out for Greece, urging the next tranche of bailout funds be paid soon. The warning saw risk appetite fade and sent investors into the safer US dollar.

GBPUSD closed the week at a 6 week high after the Pound soared against the Dollar on Friday, rising by over 1%. Sterling was buoyed by reported demand from a UK clearer and pushed higher along with the euro and equity markets.

Last week saw all financial markets driven by continued speculation over the European debt crisis and this week promises to be extremely interesting, with a plan for the EFSF and bank recapitalisations due by Wednesday at the latest.

Do you need to buy or sell US Dollars? Contact us today.

Weekly Economic Data that may affect exchange rates

Monday – Today markets will be reacting to the EU debt summit held at the weekend. Also from the Eurozone today we will see a host of inflation figures that could affect interest rates in the short term. Industrial New Orders are also released from the EU, so expect volatility in GBP/EUR prices today.

Tuesday – UK Mortgage approvals are released today, in addition to current account data from the ONS. There are consumer confidence figures from Germany. Further afield we have an Interest rate decision in Canada, and Housing Prices and confidence data from the USA.

Wednesday – The only UK data today is the CBI industrial trend survey. In the USA there are various releases regarding Home Sales. New Zealand has an interest rate decision and trade balance figures that may affect GBP/NZD rates.

Thursday – Inflation figures today are released by Germany. Staying in the EU we will see Money Supply data. Of course the on-going debt crisis will continue to be the main driver in the value of the Euro. In the UK there are consumer confidence figures. In the USA markets will be closely watching the numbers released at lunchtime: Gross Domestic Product, Home Sales and Unemployment data.

Friday – A quiet end to the week with no data of note from the UK or EU. Most data is US based including inflation data and consumer sentiment information.

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Sterling up against Euro on EU summit concerns

2011-10-21T08:23:00.002+01:00

Friday 21st October 2011
Good morning. The pound fell slightly against the US Dollar yesterday, but continued it's volatility vs the Euro, and rose a point to nearly €1.15. This was because of doubts the EU summit this weekend would go ahead, and whether or not they would reach a deal on leveraging the euro zone rescue fund. This weakened the Euro and pushed GBP/EUR rates up. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1479
• GBP/USD 1.5779
• GBP/AUD 1.5416
• GBP/NZD 1.9901
• GBP/CHF 1.4044
• GBP/CAD 1.6023
• GBP/ZAR 12.919
• GBP/JPY 120.98
• GBP/DKK 8.5440
• GBP/NOK 8.8584
• EUR/USD 1.3740

Pound gains vs Euro on EU bailout doubts

Yesterday the volatility in GBP/EUR rates continued, as investors questioned how much progress would be made on resolving the EU debt crisis at the EU summit this weekend. There was a German media report that said they had not ruled out postponing the meeting.

This weekend will be very important for the future of the Eurozone, and analysts said that the Pound's value against the Euro would continue to be dictated by what happens with the Euro, and that the pound could suffer more against the US dollar if EU leaders are seen to be unable to agree on the euro zone bailout fund.

This weakened the single currency and helped push GBP/EUR rates higher. There were also some better UK retail sales data released yesterday, however it didn't do much to affect the value of the Pound, with events in the Eurozone continuing to take centre stage.

Today's Data

Australia releases import and export data which could affect GBP/AUD rates that have been dropping from the $1.60 level in the last few weeks. Germany has various confidence measures, and as the largest economy in the EU this could impact EUR prices. Finally, the weekends summit in the Eurozone could also have an effect.

On Monday I will be posting a detailed outlook of GBP/EUR rates, GBP/USD rates and all the weeks economic data that you should watch out for if you are buying or selling currency.

Getting the best Exchange rates

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Sterling up against Euro on risk sentiment

2011-10-20T08:32:00.005+01:00

Thursday 20th October 2011
Good morning. Sterling rose yesterday and hit a 1 month high against the US Dollar, and was also up against the Euro. It was nothing to do with any particularly good data, rather it has been supported by better risk sentiment. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1477
• GBP/USD 1.5711
• GBP/AUD 1.5453
• GBP/NZD 1.9838
• GBP/CHF 1.4233
• GBP/CAD 1.6064
• GBP/ZAR 12.683
• GBP/JPY 120.44
• GBP/DKK 8.5436
• GBP/NOK 8.8596
• EUR/USD 1.3684

Sterling up on risk sentiment

Gains in European stock markets, and optimism that progress would be taken by euro zone policymakers towards solving the debt crisis pushed up sentiment towards the pound yesterday. Investors are returning to riskier currencies on the better EU outlook, and this helped the Pound gain against other currencies.

However, analysts are still saying that while there are signs that progress on tackling the euro zone debt crisis will be made this weekend, a comprehensive and a durable solution was unlikely and the UK would remain vulnerable to financial tensions in Europe.

The other factor that could pull the Pound back down is the risk of further stimulus by the Bank of England, especially after yesterdays BoE minutes hinted more asset purchases may be needed to help Britain's ailing economy. In the minutes yesterday it showed that policymakers voted unanimously to resume quantitative easing (QE) this month, and considered injecting even more than the 75 billion pounds agreed. They did discuss up to £100bn in easing, and this signals that further QE may be on the cards. This will likely keep any gains for Sterling limited.

Today's Data

UK Retail Sales figures are released today in addition to Nationwide Consumer Confidence, showing how confident consumers are about the economy. There are also inflation figures from Europe. Stateside we have various measures of unemployment.

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 lower on inflation data and BoE minutes

2011-10-19T08:28:00.002+01:00

Wednesday 19th October 2011
Good morning. Sterling fell yesterday after inflation was higher than expected. We have the Bank of England (BoE) minutes today which analysts also expect to be dovish, so the Pound is bracing itself for a possible further drop. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1411
• GBP/USD 1.5764
• GBP/AUD 1.5290
• GBP/NZD 1.9716
• GBP/CHF 1.4153
• GBP/CAD 1.5932
• GBP/ZAR 12.525
• GBP/JPY 120.92
• GBP/DKK 8.4917
• GBP/NOK 8.8114
• EUR/USD 1.3814

UK Inflation data weakens the Pound

The rate of Consumer Prices Index (CPI) inflation yesterday hit its record high in September, rising to 5.2% from 4.5%. This was higher than expected, and the latest RPI measure is the highest annual rate since June 1991.

The Bank of England had already predicted that inflation would top 5% this year as a result of higher utility bills, but it expects price rises to slow in 2012 and 2013. Despite the high numbers, many economists agree with the Bank of England that inflation may soon start to fall.

Usually when inflation is high, it signals interest rates may rise to combat it. Higher interest rates create demand for a currency and it would usually strengthen. In the current climate however with interest rates at record lows, the high inflation numbers actually weakened the Pound. This is because stagflation (high inflation with low growth) means rates have to stay low, and as a result Sterling weakened and fell against other currencies.

BoE minutes today

At 09:30am today the Bank of England release the minutes to it's latest decision to hold interest rates and pump £75 billion into the economy with Quantitative Easing. Because analysts expect the minutes to be quite dovish, this has also had an impact the Pound, weakening it and pushing exchange rates lower. The minutes show what was discussed and how the voting went.

Sterling vs Australian Dollar

The Australian dollar gained against the Pound yesterday, on reports that France and Germany were ready to sharply boost the eurozone's rescue fund amid a solid performance on regional equity markets. This combined with the weaker pound has pushed GBP/AUD rates down from it's highs in the last month, and this is expected to continue while the Pound remains under pressure.

Moody's downgrade Spain

Moody's has downgraded the rating of Spain's government bonds. The ratings agency cut Spain two notches, two days after Standard & Poor's took the same decision. Moody's said it had cut the rating because there had been no credible resolution to the eurozone debt crisis.

There has been little effect on the currency markets, because there has been so many downgrades of the main economic zones, the currency markets now seem to be paying little attention any more.

Today's Data

Today is quite important for Sterling, as we see the BoE minutes to their recent decision to pump £75bn into the economy. We will see what was discussed and how the vote went, and may well impact on the value of the Pound. There are further inflation numbers from the USA today, but no data of note from the Eurozone.

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Pound up against Euro, but gains may be short lived

2011-10-18T08:29:00.002+01:00

Tuesday 18t October 2011
Good morning. Sterling fell against the US Dollar yesterday, tracking losses in the Euro. The weaker Euro however helped push GBP/EUR rates up by nearly 1%, after comments from German officials tempered optimism that a European Union summit this week will produce a comprehensive plan to tackle the euro zone debt crisis. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1495
• GBP/USD 1.5750
• GBP/AUD 1.5546
• GBP/NZD 1.9978
• GBP/CHF 1.4178
• GBP/CAD 1.6135
• GBP/ZAR 12.673
• GBP/JPY 120.91
• GBP/DKK 8.5568
• GBP/NOK 8.8865
• EUR/USD 1.3700

Euro weakens pushing GBP/EUR rates higher

The German Finance Minister yesterday dampened demand for the euro when he said Sunday's summit of EU leaders will not present a definitive solution for the region's significant debt problems. This weakened the Euro, making the single currency cheaper to purchase.

His comments helped boost GBP/EUR rates up from a 5 week low. However the Pound dropped against other currencies such as the US Dollar. The comments spooked investors and we saw a flight back to the safe haven US Dollar, which usually strengthens when there is global economic uncertainty.

Sterling at risk of falls due to poor data

Despite the gains seen yesterday, it's worth noting this is nothing to do with any strength in the Pound, rather it's Euro weakness pushing up rates. Many analysts said there was little reason to buy sterling given weaknesses in the UK economy and loose monetary policy.

The ITEM Club yesterday downgraded its growth forecasts for the UK, which didn't do Sterling any favours. We now await data on UK inflation and retail sales which are expected to show the economy's recovery remains frail, so this could mean the current spike in GBP/EUR rates are short lived.

Some analysts said this week's data may have limited impact on sterling given that the UK central bank has already moved to bolster the economy with more quantitative easing, which involves flooding the market with pounds and thereby decreasing demand for the currency.

Today's Data

Retail Price Index, Consumer Price Index, and CBI trend survey are all released for the UK today. All of this can impact future interest rate movements and so can affect GBP. In the EU we see Economic sentiment figures. US data comprises inflation data.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

2011-10-17T07:00:00.000+01:00

Monday 17th October 2011
Good morning. As regular readers will know, on a Monday I take stock of movements in GBP/EUR & GBP/USD over the last week, with forecasts on what may happen in the coming week. I will also list the most important economic data to watch for that may affect rates.

In this week’s Report:

• Poor economic figures hurt Sterling
• G20 discuss EU debt crisis
• Downgrading of Banks continues
• 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 lost over 2% against the Euro last week as it fell from above 1.16 on Monday, to end the week struggling to remain above 1.14. The main data releases couldn’t have been more confusing when trying to gauge the current state of the UK economy with jobs figures on Wednesday showing that the UK unemployment rate is at its highest since 1994, rising above 8%, followed by data on Thursday that showed the trade deficit figures for August were narrower than expected.

The improvement in trade figures was a result of £0.2billion increase in exports, reaching their highest levels since records began in 1998, and a £0.2billion fall in imports, and is something the Bank of England have been hoping for since the credit crunch took hold in 2008 as increased exports should stimulate growth in the economy (and potentially create more jobs...)

Unfortunately news from the Eurozone was pretty downbeat. At the beginning of the week there were concerns that Slovakia would be the only 1 of the 17 member nations not to ratify the increased European Financial Stability Facility which is where every Eurozone member (including the smallest nations like Slovakia) are putting together a bailout fund of €440billion. It was thrown out in the first vote but went through in the second round on Wednesday and the Euros performance was visibly better afterwards, gaining another cent against the Pound, and moving nearly 2% against the US Dollar to reach a 1 month high of 1.3890.

Even the downgrading of Spain’s sovereign debt rating by ratings agency Standard & Poors, just a week after another of the big agencies Fitch had done the same couldn’t stop the Euros rally.

Looking ahead the Pound will most likely be driven by goings on within the UK as opposed to further afield. We know now that the bailout fund for the Eurozone has been approved it doesn’t look like the EU or IMF are willing to let the Euro fail, especially after there were more rumours today that Greece would be receiving another bailout before the end of October.

It therefore looks like the Bank of England could be solely responsible for which way the Pound moves as we get closer to Christmas since they announced a further £75 billion quantitative easing on 6th October. If this turns out to be the only time then the Pound may start to find its feet as we move through the 4th quarter. However, MPC member Charles Beans said in a national newspaper last week that the Bank of England would expand its asset purchase programme if necessary meaning any further concerns about the UK economy could swiftly be followed by more QE, and potential further falls in the value of Sterling.

With this in mind make sure you are in touch with the Foremost Currency Group about your Sterling/Euro currency requirements to help you avoid any adverse market movements.

Are you looking for the Best Exchange Rates for Euros? Contact us now.

Sterling vs. US Dollar;

Last week saw the markets start to settle following the frivolities of the previous week. After cable reached a 10 month low of 1.527 (Interbank) the previous week’s trading after the Bank of England initiated a £75 Billion program of quantitative easing (QE) the Pound seemed relatively buoyant at the start of last week finishing the day almost 3% higher against the Dollar.

Under normal circumstances the market would normally expect the currency of an economy that enter a QE program to remain consistently weak for some time after the event happens. However because most of the other major banks are themselves considering QE it has not weighed as heavily on the Pound this time around.

After Sterling's impressive rebound on Monday the currency was again stopped in its tracks following poor growth data with traders stating that Sterling was still vulnerable to further selling off. Fundamentally Sterling is still a weak currency and a weak cable cross is beneficial to the UK export market which is often commented on by the BoE governor ‘Mervin King’. Sterling’s recovery against the Dollar was always going to be limited as the US Dollar remains a safe haven currency for investors whilst there is uncertainty within the world markets.

The Dollar slipped on Wednesday against all the major currencies including the Pound after investors scaled back on long term positions in the Dollar as it was broadly seem that the exposure to the market was too great and the risk was too high. This knocked the Dollars performance and Sterling gained over 1 % against the greenback despite damning UK employment figures being released the same day. The figures showed that unemployment claimants are on the rise and worryingly almost a quarter of 16-24 year olds are now out of work.

The end of the week saw the Pound continue to gain against the Dollar after a sharp rise in the performance of the Euro which saw the Dollar slip. Traders encouraged caution over cable as there are still risks to the downside, not least that there is still the threat of further QE. However for now sterling seems to be content with riding on the back of other currencies performances, albeit good or bad and until Sterling’s fundamental show consistent signs of improvement the status quo is unlikely to change.

Unfortunately for currency purchasers this uncertainly makes life a bit trickier. Whether you are buying or selling it is important to keep up to date with market movements to ensure you maximise your position in this difficult market.

Are you looking for the Best Exchange Rates for US Dollars? Contact us now.

Weekly Economic Data that may affect exchange rates

Monday – We have a fairly quiet start to the week, with no data of note from the UK or EU. Any further developments regarding the EU debt crisis however could still affect rates. From the USA we have some industrial production figures.

Tuesday – Now we get going with UK fundamentals: Retail Price Index, Consumer Price Index, and CBI trend survey are all released today. All of this can impact future interest rate movements and so can affect GBP. In the EU we see Economic sentiment figures. US data comprises inflation data.

Wednesday – Today is quite important for Sterling, as we see the BoE minutes to their recent decision to pump £75bn into the economy. We will see what was discussed and how the vote went, and may well impact on the value of the Pound. There are further inflation numbers from the USA today, but no data of note from the Eurozone.

Thursday – UK Retail Sales figures are released today in addition to Nationwide Consumer Confidence, showing how confident consumers are about the economy. There are also inflation figures from Europe. Stateside we have various measures of unemployment.

Friday – On to Friday, and Australia releases import and export data. Germany has various confidence measures, and as the largest economy in the EU this could impact EUR prices.

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

G20 meet to discuss EU debt crisis

2011-10-14T08:21:00.002+01:00

Friday 14th October 2011
Good morning. Despite Trade Balance figures for the UK being better than expected, Sterling fell against the US Dollar as both the Pound and the Euro weakened after the European Central Bank said that the sovereign debt crisis could damage the euro's reputation. I would have thought that obvious, but there was still market reaction to the statement. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1443
• GBP/USD 1.5759
• GBP/AUD 1.5452
• GBP/NZD 1.9828
• GBP/CHF 1.4152
• GBP/CAD 1.6073
• GBP/ZAR 12.368
• GBP/JPY 121.21
• GBP/DKK 8.5169
• GBP/NOK 8.8737
• EUR/USD 1.3771

UK Trade Balance better than expected

The UK's trade deficit narrowed in August official figures have shown. Analysts said the stronger exports may boost the economic growth figures, however there were limited gains for Sterling on the news.

Howard Archer, chief UK economist at IHS Global Insight, said the August figures were "appreciably better than expected". The latest trade figures come a week after the Bank of England announced that it would inject a further £75bn of new money into the UK economy through another round of quantitative easing.

G20 Finance ministers to meet over Eurozone

Finance ministers from the G20 group of nations are meeting France later today to continue efforts to find a solution to the EU debt crisis. Greece remains the focal point but there are also fears that the crisis could spread to other countries such as Spain and Italy. This comes a day after the ECB warned that the Euro's reputation is at risk due to the debt crisis.

This weakened the single currency a little pushing GBP/EUR rates up, but as the UK is also exposed to the debt problems, gains were limited and today rates remain in the mid €1.14's.

Other news yesterday from the Eurozone was that Spain has had it's credit rating cut. Standard & Poor's reduced Spain's long term rating by one point saying there was weak growth and high levels debt. This is only one week after rating agency Fitch also cut Spain's rating.

There were other downgrades yesterday of the creditworthiness of UK banks Lloyds and RBS, and also UBS. This shows that there are real concerns both over the health of UK and EU banks. The markets have reacted very little however, probably as there have been so many downgrades all over the world, it's the same for everyone and so there has been no real effect on exchange rates.

Sterling vs Australian Dollar

The Pound had been making some gains against AUD in recent weeks. Antipodean currencies tend to weaken when there is global economic uncertainty, as they are perceived as risky. When there is volatility investors tend to unwind Carry trades and return to the safe haven currency, weakening AUD.

As some risk has returned to the markets following better US Data, we have seen GBP/AUD slip back slightly of late however. Generally Australia largely avoided the recession, and it's higher interest rates have been keeping it strong and exchange rates low relative to where they have been in recent years. If we see an interest rate cut in Australia in the coming months then we could see the rate increase more, but while there is so much turmoil in the markets investors will remain wary of the AUD.

Today's Data

Lots of EU data today. Trade Balance figures from the EU are released at 10am, followed by various measures of inflation. In the US, retail sales will show how confident consumers are in the economy.

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.