Currency Forecasts

Pound/Euro exchange rates through 1.15

Pound exchange rates have pushed through the 1.15 level to reach the highest level since April. This has now seen the pound rally 3% since the end of October, a difference of £8k on a €300k money transfer. This comes as Theresa May is to chair a special cabinet meeting on Wednesday to discuss a draft Brexit withdrawal agreement. Sources report that the text has been agreed at a technical level by officials from both sides after intensive talks this week.

Could this be the start of a significant pound rally?

This all sounds a little bit like the ‘boy who cried wolf’ at the moment with continued rumours creating significant shifts for the pound. Once again this shift has been created by rumour as opposed to hard facts. We have seen this on a number of occasions over the last few weeks and on each occasion the rumours were unsubstantiated. My feeling is that, in this instance, a deal is close. The BBC’s chief political correspondent Vicki Young said individual cabinet ministers were likely to be shown the full draft text this evening as a prelude to a full meeting on Wednesday afternoon. If a deal can be struck then I would look for the pound to push towards 1.18 in the coming days……..euro buyers watch this space.

Taking advantage of the best exchange rates

If you want to convert currency at the best rates, then it’s crucial to be in a position to take advantage of any gains in the rate, as levels are often very short-lived. This means that you need to have an account open with a broker to be able to act on a quote that is provided.

You can open a trading account with us for free, without obligation. Get in touch with us today to discuss how to get started. It only takes a few minutes to register, and you can then see our trading levels on-line 24/7 to see exactly what rate we can offer you at any time.

The rates we provide are up to 5% better than your bank or existing broker may offer. The savings could be huge so why not compare what we can offer you today.

Click here to get started.

Pound and Euro weak, USD strong

Good morning. The Pound weakened yesterday as the rollercoaster of Brexit negotiations continue. One minute a deal is imminent and the Pound rises, then other comments surface that cast doubt on a deal being agreed this week, and the Pound falls. Just this morning in the last hour the GBP/EUR rate has fluctuated from €1.1440 and €1.1480. Ultimately if a deal is not announced by tomorrow (Wednesday) then the EU will not convene a special summit. This would push things back, increasing the chances of a ‘no deal’ scenario, and pull the Pound lower.

What else is moving currencies other than Brexit?

For a change it’s not just Brexit moving the currency markets. The Euro is also weak due to concerns over Italy’s budget, which is another reason that Pound/Euro rates are close to €1.15. The EU aren’t happy with the Italian budget, but the Italians are refusing to make any changes. There are reports that if they refuse to make any amendments today, the Euro could weaken further, helping the GBP/EUR rate rise as the Euro weakens and becomes cheaper.

Elsewhere, the US Dollar is benefitting from the uncertainty in Great Britain and the Eurozone. The weakness in the Euro and Pound have helped strengthen the US Dollar. This is reflected in the GBP/USD rate which is currently around $1.29. The fact that the FED are likely to continue raising interest rates in 2019 is helping Sterling.

What is in store today for the Pound?

Today, there are a few things that I think will affect rates. The most important and obvious one is Brexit. It’s crunch time in the negotiations, and if a deal is announced expect the Pound to rise. If nothing happens and it’s looking like things will be delayed, then the Pound will give up its recent gains.  This morning at 09:30am we will also see the latest UK job market data. Unemployment is expected to remain at a record low of 4%. The markets will be watching for the key wage growth number. It’s expected that wages will have grown by 3.1%. If confirmed, it would mean wages growing faster than inflation. This in turn would mean a higher chance of the Bank of England raising interest rates, and it would probably strengthen the Pound. This is because the prospect of higher interest rates strengthens a currency due to the higher return on offer for investors.

If you need to make a transfer and would like to see what rate of exchange we can offer you, click here to make a free enquiry.

Pound volatile on Brexit uncertainty

What goes up, must come down. That’s what’s happened to Sterling over the last few days, but we are seeing a slight recovery as we progress through the day.

Last week was a very good one for the Pound. We saw GBP/EUR rise to €1.15, a level not seen for 6 months and very close to the best in 18 months. The gains were largely due to optimism that a Brexit deal would be announced at any moment.

The positivity was not to last however. Friday’s GDP numbers didn’t excite market very much, and after we had closed, Boris Johnson’s brother (a remainer) quit the government in protest at the proposed deal. If more remain supporting MP’s follow suit, then a deal becomes less likely and the Pound would drop. However at the time of writing the Pound has recovered part of Friday’s losses.

The next 48 hours will be very interesting for the Brexit and the Pound, as outlined in a good article in the Times earlier today. What the last few days show, is it’s not just the conservative party that need to agree a deal. The EU must also agree to it, and there are a few sticking points that are hindering them doing so.

What would happen to the Pound if a Brexit deal is agreed?

Assuming both sides do agree something in the next few days, it then has to be voted through parliament. Labour have already said they would vote against any deal that doesn’t give ‘the exact same benefits’ of remaining in the EU, which is frankly preposterous. So, it will depend on whether May can ensure the Conservative party along with the DUP, voting through the deal.

If all of this happens, then I think the Pound will strengthen significantly.

What would happen if a Brexit deal is not agreed?

As you can see, there are several hurdles to overcome. If a deal cannot make it over these hurdles, then we’re in unknown territory. What happens if a deal is not ratified by parliament? Will the EU agree to the proposed deal? Will there be a leadership challenge? Will there be a general election? Will May survive? Will the whole Brexit process need to be extended?

As you can see this would open a Pandora’s box of uncertainty. Markets hate uncertainty, and if a deal is not voted through, I think the Pound would fall considerably. Therefore, the next 48 hours are crucial and will largely determine whether the Pound will go up or down.

Make sure your currency requirement is protected

Those with a currency requirement should get in touch with us today to discuss their options. We can help in various ways. Our service does not just involve achieving exceptional rates of exchange, we can also offer many ways to protect against the uncertainty currently causing GBP volatility.

Speak to one of our experts today to discuss your requirements and your options. Don’t just sit back and hope the exchange rate will move in your favour; hope is not a reliable economic tool.

Make a free enquiry with a currency expert today.

 

Pound/Euro rises to €1.15

The Pound has had a very strong week, rising every day. The reasons for the gains is the fact that there is more and more optimism that a Brexit deal is going to finally be agreed this week. There are reports that the withdrawal agreement is pretty much complete, and currently being looked at by the ministers. GBP/EUR sits at €1.15 which is pretty close to the best we have seen in 18 months:

GBPEUR1Y

Would a Brexit deal strengthen the Pound further?

This month is key to how the Pound is going to perform in the coming months. If reports are true and a deal is almost complete, then the EU will hold an emergency summit this month to sign it off. If that happens, then I would expect the Pound to rise to new 18 month highs. We have however seen rates reach these levels several times in the last year, only for the Pound to drop away again.

Personally I think a deal will be agreed that could cause the Pound to rise. However, it’s important to remember that markets move on rumour, and the fact that a deal is expected is why the Pound has risen by 3% already this week. A deal may well send Sterling higher, however there is no way to know how much this is already priced in to the market. If and when a deal is announced, a spike in the rate could well be short-lived, and ultimately we might not see a surge in GBP/EUR rates that some expect.

Taking advantage of the best exchange rates

If you want to convert currency at the best rates, then it’s crucial to be in a position to take advantage of any gains in the rate, as levels are often very short-lived. This means that you need to have an account open with a broker to be able to act on a quote that is provided.

You can open a trading account with us for free, without obligation. Get in touch with us today to discuss how to get started. It only takes a few minutes to register, and you can then see our trading levels on-line 24/7 to see exactly what rate we can offer you at any time.

The rates we provide are up to 5% better than your bank or existing broker may offer. The savings could be huge so why not compare what we can offer you today.

Click here to get started.

Sterling pushes to a 6 month high, will it last?

Sterling exchange rates have have rallied 2.5% in less than a week bring the pound to its highest level against the single currency in nearly 6 months. This drive towards the pound has created, in my opinion, some very strong buy opportunities for those looking to secure euros. To highlight how this move can impact anyone buying euros, the cost today for a €300k international money transfer would be £6.5k cheaper than this time last week.

What has caused the pound to rally?

As my colleague Alastair alluded to in his post yesterday the pound found support following an article released in the Sunday Times suggesting that a Brexit deal was close. This all sounds a little bit like the ‘boy who cried wolf’ at the moment with continued rumours creating significant shifts for the pound. Just last week an article was released by the Times late Wednesday night,  report from the Times newspaper suggesting that London had agreed negotiations with Brussels to give UK financial services firm continued access to the Euro Zone. This report was unsubstantiated and following a strong start on Thursday morning the pound devalued sharply.

My point here is that if this report is to be true, then we should see the pound gain momentum and push towards 1.20, however I have my doubts. We seem to have been down this road on numerous occasions and each time, when a deal looks likely, the deal did not come to fruition and as a result the gains made for the pound were short lived. You can see by the graph below that the pound has found support on 4 separate occasions since August, worryingly each time the pound has rallied exchange rates have sharply declined within a matter of days. I for one hope we are on the right track for Brexit buit I have my dowbts and I believe the GBP/EUR seesaw is set to continue.

 

What else could impact the pound this week?

Of ocurse the main drive for the pound will continue to be Brexit negotiations. Rumours were suggesting the cabinet were due to meet this week however that no longer seems to be the case, so whether the Sunday Times article is correct remains to be seen. Brexit aside the main focus for the pound this week will be Friday with data heavily weighted to the UK. Look out for UK GDP data along with industrial and manufacturing data, all scheduled for 09:30. For anyone looking at the US dollar then the Fed interest rate decision on Thursday is also one to look out for.

Do you need to send money overseas? Are you looking for the best exchange rate? We can offer you exceptional rates of exchange that are likely to be significantly better than your bank or existing broker can offer you. We can help private clients buying or selling property overseas, and business clients that import/export or need to make or receive payments in foreign currencies. For more information or to get a quote please get in touch.