Pound to Euro exchange rates at 6 month high

Good Morning. Sterling has risen this morning in the wake of comments from Bank of England policy board member yesterday. Andrew Sentance said it may be difficult to keep inflation on target if import and services prices keep rising. These comments seem to increase the chances of an interest rate hike in the UK.

With higher interest rates, Sterling becomes more attractive to investors and the increased demand in anticipation of higher rates is what has caused the pound to gain this morning.

He added that the economy, now officially out of recession (just!), was facing opposing pressures which the central bank would have to consider in its Inflation Report next month.

The market took the comments to suggest an imminent end to the BoE’s 200 billion pound asset-buying plan, but analysts said they did little to change the view that interest rate rises will not follow until the second half of the year at the earliest.

Sterling to Euro
Rates have climbed due to the reasons above, and also due to concerns over the fiscal health of Greece and other euro zone countries. This has weakened the Euro, making it cheaper to purchase, and combined with Sterling strength, rates are 1.1585 at the tome of writing, which is by far the best levels since summer last year.

Given the fragile nature of the UK recovery, coupled with the huge debt levels we have, it’s likely that the gains we’ve seen over the last few weeks will not be sustained. Therefore, if you wish to take advantage of the best rates for many months, then contact us today by clicking the links below to register a free trading facility. You can then have a free consultation on the tools we have available to help you achieve the best possible rate, and protect yourself from a downturn in rates.

Sterling to US Dollar
The Federal Reserve left interest rates unchanged at their range of between zero and 0.25%, although one committee member voted against the action. The US central bank repeated its vow to keep rates exceptionally low for an extended period.

These low rates are helping keep the US Dollar weak, and so we also have good buying levels for GBP/USD, which is maintaining levels above $1.60.

Summary
Markets go up and down all the time. Currently we’ve had a sustained period of Sterling strength, giving buying levels clients could only dream of a little as a month ago. They key now timing your purchase so you don’t lose out. Of course, markets may continue to rise. However markets may quickly decline if we get any poor economic news.

Clients with a requirement to buy Euros or US Dollars in the coming months may not wish to take that gamble, and would be happy buying at 6 month highs, secure in the knowledge they are then protected against a downturn.

If you wish to fix a rate, you can do so for a period of up to 2 years, with a 10% deposit of the total you want to convert. This is a Forward Contract. To discuss how these work, contact us today following the links below.

Open a free trading facility, and quote BLOG for preferential rates…

Open an online Trading Account

Email Me

Foremost Currency Group

Leave a Reply

Your email address will not be published. Required fields are marked *