Pound continues to gain against EUR & USD

Good Morning. GBP/EUR has broken through €1.14, which is the highest level for 5 months. Better housing data and fears over some EU economies have caused the gain. Rates @ 08:15am are as follows:

  • GBP/EUR 1.1400
  • GBP/USD 1.6410
  • GBP/CAD 1.6841
  • GBP/DKK 8.4830
  • GBP/HKD 12.737
  • GBP/HUF 305.00
  • GBP/JPY 148.61
  • GBP/ZAR 12.134
  • EUR/USD 1.4394

Pound vs Euro
Last week and indeed the start of this week, we have witnessed a positive performance for Sterling exchange rates increasing by just over 3% against the single currency. In real money terms this would have seen an increase of over €5000 when transferring £200,000 if traded at the peak of the market. These figures show the importance of keeping in touch with our professional currency brokers here at The Foremost Currency Group who can help to maximize your currency requirement with information to try and conduct your transfer at the best possible time for you.

The increase came off the back of the UK GDP estimate which showed a prediction of a 0.3% increase for the fourth quarter of 2009, a figure that if realised would take the UK officially out of recession. The official release for this is due on the 26th January and any change from this predicted figure could cause volatility in the markets for Sterling exchange rates.

The week ahead sees a host of economic data releases with the most important being the UK unemployment figures and the Bank of England minutes both released at 9:30am on Wednesday. The minutes will summarise the discussion by the MPC (Monetary Policy Committee) at this months meeting and any further talk of quantitative easing could cause Sterling weakness. This coupled with the likelihood of increased unemployment levels could see the pound suffer this week and recent gains wiped out.

With such a potentially volatile week ahead it could be wise to consider a forward contract with us here at FCG, where with a small deposit you could lock a rate for up to two years in advance eliminating the risk of adverse market movement which could make your purchase of Euros that much more expensive. If you have yet to open a trading facility with us to gain access to our commercial rates of exchange click here to open an account today.

Pound vs US Dollar
A shortened week in store for the US due to Martin Luther king holiday on Monday but nevertheless an important one.

US Initial Jobless claims will grab the headlines this week; this is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labour market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Therefore, a decreasing number should be taken as positive or bullish for the USD.

It is expected to be below expectations so we may see some Dollar strength on the back of this creating a new window of opportunity for those needing to purchase Dollars.

Producer price index figures will be released on Wednesday and this measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. This can be a main indicator of inflation and to whether The US could raise interest rates. On the Flip side if it comes out negative we could see the US raise taxes and also more quantitative easing?

Combating this is easy here at FCG we have a STOP/LIMIT contract which can protect you form sudden rises/falls within the market. Speak to your account manager today to find out more.

Another Movement for the Markets this week will be the BOE Minutes the minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. If the BoE is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the GBP.

This Could Counter balance potential positive news for the Dollar from ‘Jobless Claims’ data earlier in the week and potentially push Sterling up against the single currency.

If you are currently holding on to US Dollars and have thought about moving them back across the pond, now maybe a good time. We have a number of contracts which can safeguard your Currency Requirement. For E.g. if you are selling a property and will not complete for another 6 months a ‘forward Contract’ can combat the rising exchange rates giving you peace of mind and not having to worry about the rising GBP/USD rate.

When you get in touch, ensure you mention you heard about foremost currency group through our Blog. Simply quote ‘Blog’

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