Friday 30th May 2014
Good morning. Exchange rates remain quite steady today. Pound/Euro rates have dropped a little this morning after some very impressive German Retail Sales numbers. This strengthened the Euro and made it more expensive, pushing GBP/EUR down into the €1.22’s. Pound/Dollar rates remain a little above $1.6730.
Will Pound/Euro rates go up or down June 2014?
As regular readers of my blog will now, the current high GBP/EUR rate is all to do with interest rates. The markets expect the UK to raise interest rates, and this has been gradually priced into the market over the last few months, resulting in the highest Pound/Euro rates in 18 months.
Over in Europe, the threat of deflation means that the European Central Bank (ECB) may have to cut interest rates. Next Thursday we will find out as they announce their decision. I think there is a very good chance they will cut to around 0.1%. If they do, then Pound/Euro could go higher. However should they choose to wait, then we will probably see the exchange rate drop sharply.
After their decision they will give a press conference which will give an insight into their discussions. All in all, this is a very very important week for the Pound/Euro cross. (See below for other economic information that could affect the rate.
What should you do if you need to buy or sell Euros at the best exchange rate?
Perhaps you need to convert Sterling to Euros, or maybe you have Euros to convert to Pounds. Whatever your requirements, this week is an important one and will have an effect on the exchange rate you can achieve.
Why not take the opportunity for a free consultation on the service I offer. I can explain what the market is doing, which way the rate could go, and run over the options you can look at to protect against the rate moving against you. My service is free, and I can also provide you a quote to compare with your bank or existing broker. You could be surprised how much you could save.
Next week’s data that may affect exchange rates this week.
As regular readers of my blog will know, the main thing that causes exchange rates to move is economic data releases. Below I have listed the main economic data that I think could affect currency rates this week.
Monday 2nd June 2014
The Manufacturing PMI (Purchasing Managers Index) is the main thing on the menu today. This captures business conditions in the manufacturing sector, and as a very important indicator of overall economic conditions. This is released today by the UK, EU, Germany, and the USA so expect some volatility for Pound/Euro and Pound/Dollar.
Tuesday 3rd June 2014
Nothing of note from the UK today Over in Australia we have Retail Sales numbers and an interest rate decision from the Reserve Bank of Australia (RBA). The main driver for GBP/EUR rates will be the Unemployment numbers and inflation data from Europe.
Wednesday 4th June 2014
GDP numbers are released from Australia today which could affect GBP/AUD rates. We also have GDP numbers from Europe, along with inflation data. Further afield we have Trade Balance numbers from the states, and an interest rate decision from Canada.
Thursday 5th June 2014
The most important day of the week for GBP/EUR rates. The Bank of England (BoE) announces its Quantitative Easing (QE) and Interest rate decision today. I don’t expect them to make any changes. However, we also have the European Central Bank (ECB) decision, and there is a good chance they could cut interest rates.
The market has already partially priced this in, but if they do cut the Euro could weaken and push GBP/EUR higher. If they don’t cut, Pound/Euro rates will probably drop. They will also give a press conference after the decision which could also have an impact on rates.
Friday 6th June 2014
Trade balance figures from the UK this morning could create some volatility for Sterling. There are also Trade Balance numbers from Germany. Over in the states, the main event will be the Unemployment figures and non-farm payroll numbers. Regular readers will know this release often has quite a big impact on the Pound/Dollar rate.