Wednesday 19th November 2014
Sterling/Euro recovers to €1.25
Just a quick update this morning, as we have finally seen the Pound recover slightly after the last week in which we saw rates drop from €1.28 to €1.24.
Earlier this morning the Bank of England released the minutes to its recent meeting where they decided to leave rates on hold. Of the 9 member committee, 7 voted to hold rates, with 2 voting to raise them, which has been the case for the last few months. You can read the full minutes here on the BoE website.
Why did this cause the Pound to rise?
Given inflation numbers have been lower recently, some analysts including me thought that the 2 members that had been voting for a hike would not do so. The market had also been expecting this and it starting getting priced into rates in advance, and before the release of the minutes GBP/EUR rates were as low as €1.2440. As you can see from the chart above, as soon as the result was out Sterling exchange rates jumped to €1.25 where it now stands.
This is a key technical level so I expect rates to remain at around €1.25 in the short term.
Focus will now be on Pound/Dollar rates. Currently this sits at around $1.57, but there is some key data out in the next few days that could change this. This evening at 7pm we have the US Federal Reserve minutes, and if there are hints at an interest hike in the states we could see the exchange rate drop further. Tomorrow we have a host of inflation data and jobless claims from the states and quite simply, good economic news could strengthen the US Dollar and cause the exchange rate to drop.
Do you have an upcoming currency transaction?
If you need to convert currency then get in touch to find out more about the exchange rates I can offer. I regret we do not deal with cash or holiday money, only bank to bank transfers for amounts £5k+. You may have bought or sold a property abroad, or perhaps your business buys and sells goods from the Eurozone. Whatever your currency needs, you could save thousands by achieving a better exchange rate.