GBP/EUR & GBP/USD forecast 2012/2013

Thursday 13th December 2012 

 Good afternoon everybody. In this afternoon’s post I’m going to take a detailed look at Pound/Euro rates, and the forecast for where rates may go in 2012 and 2013. I will also have a look Sterling/Dollar rates. 

I will also run over some of the options and contract types I can offer for any currency requirement you may have in the next 2 years, to help you get the best exchange rates and make the most of your currency. 

Pound/Euro stable in the mid €1.23’s 

 

The Sterling/Euro exchange rate has fallen slightly in recent weeks, but still remains firmly above the 1.20 mark. The reason for the fall is twofold, and will be familiar to regular readers as it’s been the main driver of exchange rates all year! 

Firstly we have the progress made in Europe, which the markets have taken to be positive. This has seen the Euro gain some strength and thus become more expensive to purchase. We also have the threat of the UK’s credit rating being downgraded, which has taken some steam out of the Pound. 

Some in the market are now saying that the euro could gain further support after the European Union agreed to make the European Central Bank the bloc's banking supervisor. This is positive news for the Eurozone, and so could pull rates down further. Of course things are so volatile in the Eurozone, it’s impossible to predict what will happen in the coming weeks. You can read about the new Bank rules here.

What UK news is affecting the Pound?

On the UK side, data has shown that British factory orders rose this month, although there was little reaction in the currency markets with the Pound remaining largely unaffected. Of more important to Sterling at the moment are growth prospects and credit ratings. 

In his recent autumn statement, George Osborne downgraded growth forecasts and said the country will miss debt-cutting goals. This has increased concerns the UK will lose its prized AAA credit rating. Only the UK and Germany retain good credit ratings from all major agencies. This could of course weigh on the Pound should we be downgraded. 

In my opinion however moves in the Pound/Euro rate will be driven more by developments in the euro zone in coming months rather than what will happen in the UK. Markets are waiting to see whether Spain will apply for aid, triggering the European Central Bank's bond-buying scheme that is seen as providing a backstop to peripheral debt markets. 

So which way will Pound/Euro rates go now?

In a nutshell, if things remain positive in Euros, GBP/EUR rates could fall. Should there be any unexpected deterioration of the situation in any of the troubled EU countries such as Spain, Italy, Portugal or Greece, then we could see renewed weakness in the Euro, causing rates to climb again. 

Regardless of whether you are buying or selling Euros, simply sitting back and hoping the market will move in your direction invariably means you are simply chasing the market using hope as your only economic tool. A wiser strategy would be to use tools such as Stop Loss and Limit orders, so you can take control of your requirement and allow you to budget effectively for any requirement you may have in the coming months.

If you would like a free consultation on the types of contract we offer such as Stop Limit orders, then get in touch with me today. I can discuss your requirements, let you know all your options and give you my view on the current market forecasts. In this way you can make an informed decision on what to do and when to buy your currency. Simply leaving things to chance could cost you dearly. 

Click here to send me a free enquiry, and book your free telephone consultation now. 

Pound Dollar remains near 6 week high vs. US Dollar 

 

The Pound has recently been at a 6 month high vs. the US Dollar, however fell a little today during trading. Sterling pulled back somewhat because investors took some profits after the news that the FED has announced a new round of monetary stimulus, which was expected. 

Moving Forwards, rates I think will now remain above the .60 mark against the Dollar for the rest of the year, especially if we see hints that the Bank of England wills hold off from signalling further Quantitative Easing in the UK. 

If you need to buy US Dollars at the best exchange rates, there are 2 things you should consider. Firstly, you can fix the rate now while it’s so good, using either a Spot of Forward contract. A spot contract needs to be settled in full within 2 working days of booking your rate. A Forward contract allows you to fix the current rate for up to 2 years, and only lodge 10% of the total to be converted. The remaining 90% becomes due when you want to have your US Dollars transferred. 

A second option is if you think the rate will rise further. You can place a ‘Stop Loss’ order at a level slightly below the current rate. This means if the market drops, your currency is secured at that rate, protecting you from a further decline, and giving you a worst case scenario. The advantage of a Stop Loss is that if the market continues to rise, you can continue to take advantage of any gains, raising your stop level in line with market movements. 

Click here to send me an enquiry to find out more about these types of contracts. 

Source | Foreign Exchange Rate Forecasts | http://foremostcurrencygroup.blogspot.com/2012/12/gbpeur-gbpusd-forecast-20122013.html

GBP/EUR & GBP/USD forecast September 2012

Thursday 13th September 2012
Good afternoon everybody. I'm posting a quick update on what's been happening so far this week with exchange rates. In a nutshell, it's not much! Sterling remains near a 4 month high vs the US Dollar, and is still just below €1.25 against the Euro. Let's take a quick look at each cross in turn:

Pound/US Dollar remains near 4 month high

Rates are looking pretty good for the Pound against the US Dollar, remaining around the .61 level. The reason for this is firstly more confidence in the Eurozone, which has meant investors leaving the safe haven Dollar. This in turn has weakened it slightly making it cheaper to buy.

The rate is also supported by expectations of more monetary easing by the U.S. Federal Reserve which will be announced later this afternoon at 17:30pm. This has underpinned demand for perceived riskier currencies such as the Pound, and helped push rates up a little. Many analysts said the pound could rise further against the dollar if the Fed does relaunch its bond-buying programme, which tends to weigh on the dollar, but sterling was also vulnerable to the risk policymakers will hold fire.

All in all it's a good time to look at buying Dollars, given it's at a multi month high, and not very far away from the best it's been in a year.

Sterling/Euro remains flat in the €1.24's

In contrast to the good Pound/Dollar rate, Pound/Euro has fallen in recent weeks from the 4 year high we saw in the summer.

The single currency has been lifted by growing confidence in euro zone assets after Germany's Constitutional Court gave the green light to the region's new rescue fund and the European Central Bank's bold plans to lower borrowing costs for struggling countries.

This means investors are much more confident of the Eurozone being able to weather further financial storms and bailouts, and the Euro has strengthened accordingly. A stronger Euro is more expensive to buy, and that's why rates have fallen.

Over the last few days however the market has been very flat indeed, with hardly any movement in rates to note.

Tomorrow we have the G20 meeting starting, which is a gathering of finance ministers and central bank governors and thus could add a new dimension to the currency markets. Scheduled releases tomorrow also include EU inflation and unemployment numbers, US inflation and Retail Sales figures, so we could see a little movement then.

Also the FED's actions this evening could cause some movements in rates. Keep an eye on the Twitter feed in the sidebar, which I regularly update with the latest exchange rates to see how things are moving.

I'll be back on Monday morning with my usual detailed analysts of the Sterling/Euro rate and a full breakdown of next weeks economic data.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

Click here to send me a free enquiry

Source | Foreign Exchange Rate Forecasts | http://foremostcurrencygroup.blogspot.com/2012/09/gbpeur-gbpusd-forecast-september-2012.html

Getting the best GBP/EUR exchange rates

Monday 24th September 2012
Good morning. It's the start of a new week, so as usual I will look at what has happened with Pound/Euro rates over the last week, where rates may head based on what we know about the current economic situation, and also a round up of the most important data releases this week that I think could have an impact on exchange rates.

In this week’s Report:

• Pound/Euro rates recover from 3 month low


• More QE could be on the way from the Bank of England


• Sterling/Dollar at near 13 month high


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

 Sterling vs. Euro;

 

So what's been happening?

 

Over the last few weeks the Pound vs. Euro rate has been steadily dropping as investors become more confident about the Eurozone tackling its debt problems. During this time we have seen the exchange rate drop from a 4 year high of €1.2860 down to the lowest in 3 months when we touched €1.2350. This demonstrates not only how volatile the market is at present, but also the affect fluctuating exchange rates can have on any currency requirement. In just a few weeks the cost of a €200,000 property has fluctuated by nearly £7000.00.

 

So what is causing the volatility and what can we expect to see in the coming weeks?

 

It’s really all down to confidence in the Eurozone. When we hit the highs, there were significant concerns over the Eurozone’s debt issues which had weakened the Euro significantly. In the last few weeks however, we have seen Germany give the go ahead for the regions new rescue fund and the European Central Bank laying down bold plans to lower the borrowing costs for struggling countries. This is what has caused GBP/EUR rates to fall as confidence returned to the single currency.

 

In the last week however, poor euro zone business activity data fanned concerns about a deepening recession in the region, helping the Pound /Euro rate rise back to around the €1.25 level. The Euro has fallen in value as gloomy euro zone purchasing managers' surveys suggested the European Central Bank's plan to buy the bonds of indebted euro zone countries has yet to bolster business confidence.

 

So will rates now continue rising or is this just a short lived spike?

 

Any significant gains are probably unlikely, due to the impact of the fragile Eurozone economy on the UK, which has strong trade links with Europe. We have actually seen better UK data recently, including signs of falling unemployment and a strong rise in industrial production, which suggest the economy may have recovered in the third quarter. However, Bank of England minutes released last week showed that some policymakers felt the UK economy may need more stimulus, keeping alive speculation the central bank may extend its £375 billion QE programme in November.

 

Weak fiscal numbers (such as Friday’s data showing UK borrowing is more than 25% over target) will keep the pressure on the BoE to ease monetary policy further to support growth, and more QE may well weaken Sterling as it has in the past. Governor Mervyn King gave a downbeat assessment of the British and world economy last week, and warned the euro zone could yet fall apart.

 

Summary 

 

So in a nutshell, GBP/EUR rates are being pulled in both directions; renewed concerns over the Eurozone are weakening the Euro, however concerns over more QE in the UK and how the EU debt crisis may affect our economy are holding Sterling back from making significant gains. Where rates will move in the coming weeks comes down which way this currency tug of war goes, which in turn depends on confidence in the Eurozone. Forecasts from the major players differ wildly from as high as €1.29 to as low as €1.18 by year end, illustrating how uncertain things really are.

 

In times like these, simply leaving things to chance is a very risky strategy, and you could end up with a rate much worse than necessary. You can take some control over the market by knowing what tools are available such as Stop Loss, Limit Orders and Forward contracts. Having a free consultation with us will allow you to employ a strategy that is right for you, and having a framework in place means you can budget effectively and not be caught out by unexpected swings in the rate such as we have seen recently.

 

If you need the best exchange rates send me a free enquiry now. 

 

Weekly Economic Data that may affect exchange rates

  

Monday – In the UK today we will see the latest House Prices which reflect overall economic health. In the Eurozone there are Italian Trade Balance figures, German economic assessments and Import prices. There is nothing of note from the USA other than some minor manufacturing numbers.

 

Tuesday – There are no UK releases at all today. There is a meeting between ECB president Mario Draghi and German Chancellor Angela Merkel, which could throw up some surprises and affect the value of the Euro. Staying in Europe, we have Consumer Confidence measures from Germany and Italy. Elsewhere, the USA has some consumer confidence and house price measures, and New Zealand releases its latest Trade Balance figures.

 

Wednesday – A big day for Germany today, with the latest Inflation data and Retail Sales numbers being released. We will also see the UK CBI trade survey, although it doesn’t usually affect GBP very heavily. Across the pond we have the latest US Mortgage Applications and home sales numbers.

 

Thursday – It’s likely to be a choppy day for Sterling/Euro. Starting in the UK we have the latest GDP numbers in addition to confidence and Business investment measures. In the Eurozone we see Consumer Confidence, Industrial Confidence, Money Supply and Germany unemployment. In the United States there are measures of Jobless Claims, Home Sales and Durable Goods orders.

 

Friday – There are no significant UK releases today. In Europe we have French GDP and Consumer Spending, Italian & Greek Inflation Data. In the United States there are various measures of personal Spending and inflation.

 

Getting the best exchange rates

 

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

Click here to send me a free enquiry

Source | Foreign Exchange Rate Forecasts | http://foremostcurrencygroup.blogspot.com/2012/09/getting-best-gbpeur-exchange-rates.html

US Election effect on exchange rates / GBPEUR hits new high

Wednesday 7th Novmeber 2012
Good afternoon everybody. Things have moved around in the currency markets quite a bit today. We've had the US election dramatically affect the value of the US Dollar and riskier currencies. We have also seen Pound/Euro rates hit a new one month high due to poor UK data. In my post today I'll take a look at the election, then the Pound/Euro situation. I'll also have a quick look at Thursdays central bank decisions and how this might affect exchange rates going forwards.

US Election – effect on exchange rates

It dominated the news today, so I’m sure you all know that Barack Obama has won a second term as president of the United States. There are many sources where you can read about the election, so here today I will only focus on the effect it has had on exchange rates.

 Effectively, it has weakened the US Dollar significantly, and pushed rates up above .60 before falling back away. The reason the USD weakened is the fact is was sold off fairly comprehensively once the results were known. This is because the victory for Barack Obama in the U.S. presidential election is seen ensuring easy monetary policy.

It has calmed the markets now there is more political certainty, and the fact Obama won means economic policy will remain the same and the Federal Reserve's easy monetary policy is likely to stay for some time to come. This weighed on the dollar and gave a boost to commodity currencies such as the Aussie Dollar and Canadian Dollar. Gains were limited however over a little uncertainty over Thursdays Bank of England decision, which I’ll cover in more detail in a moment. First, the Euro…

Pound hits new 1 month high against Euro 

Initially when the markets opened on Wednesday Pound/Euro rates dropped back away. This was due to the move into riskier currencies, as I mentioned in the election paragraph above. This gave the Euro some strength and it became more expensive to buy.

The drop didn’t last long though, as at 10am this morning we saw the latest German Industrial Production figures, and they were far worse than expected. The German industrial output data also lowered growth forecasts from the EU Commission, and this weighed on the single currency ahead of a crucial Greek parliament vote on reforms.

The net result? A weakening Euro and a spike of nearly one sent from the low to the high today. This shows how quickly things can change in the markets, and on a purchase of €250,000 today, the cost has varied by £1600.00 this afternoon alone.

It’s good news for Euro buyers, as rates are the best in over a month, and only a few points away from the best in over 4 years.

If you need to buy Euros in the next 6 months, get in touch with me by clicking here.

Bank of England announcement Thursday 

The next main event is the Bank of England decision on interest rates and Quantitative Easing at midday Thursday. A few weeks ago, everybody thought it was certain more QE would be announced. In the last few weeks though, better UK data has greatly reduced the chance of this happening.

Of course nobody knows for sure, and some MPC members are split on what to do.

The reduced chance is the reason the Pound has strengthened. Things can turn the other way very quickly though, so if they do announce further stimulus, expect the Pound to fall. Personally I think they will hold fire on more easing until early next year.

ECB also meet on Thursday

The European Central Bank also meets on Thursday and while no rate cuts are expected, growing evidence that they are in the midst of a recession is likely to boost expectations of more easing in the coming months. Watch out for the press conference at 13:30pm Thursday, as any comments positive or negative about the Euro could quickly affect GBP/EUR rates.

That’s all for now, remember to send me a free enquiry if you need to secure the best exchange rates

 

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

 It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

 Click here to send me a free enquiry

Source | Foreign Exchange Rate Forecasts | http://foremostcurrencygroup.blogspot.com/2012/11/us-election-effect-on-exchange-rates.html