Monday 28th September
The last week has been an interesting one for currencies, with the GBP/EUR exchange rate fluctuating between €1.39 and €1.35. Since last month, it’s now fallen 8 cents. This means purchasing €350,000.00 today is costing you around £15,000.00 more than last month, which really illustrates how important it is to get your timing right, and have tools in place like ‘Stop Loss’ orders to protect against sharp drops in the market like we have seen recently.
What has been causing the volatility in currency prices?
As I explained in my last post, the main reason for the fall in GBP/EUR rates last week was due to a strengthening of the Euro, which has now become more expensive to buy. The European Central Bank opted not to extend their stimulus programme, and have also said interest rates will not be cut. This has supported the Euro and is the main reason for rates dropping away.
Also the global economic uncertainty has meant that the UK are no longer likely to tighten monetary policy, and this has halted the rise in the value of Sterling. I’d expect the USA to raise interest rates later this year, and the UK may follow them, but not until the latter part of 2016 in my opinion. (The rumour of an interest rate hike generally strengthens a currency due to the higher return on offer for investors).
What could happen to exchange rates this week?
Below I’ve listed the main data releases I think will affect currency rates for the coming week. For those looking at GBP/EUR, there are lots of inflation figures from the UK and EU, and also UK GDP figures that could affect the rate.
For GBP/USD, look for hints on interest rates from FED member speeches later today.
If you have a currency transfer to make, would like a quote, or simply a chat about what is moving exchange rates, click here to send me a free enquiry today.
Monday 28th September 2015 – Very quiet other that data from the USA – Inflation numbers, Home Sales and Speeches by FED members could all affect GBP/USD. So far rates have risen today, but the general trend in Pound/Dollar rates is likely to be down
Tuesday 29th September 2015 – There is a speech by Bank of England governor Mark Carney, and he may give clues on UK interest rates that could affect the Pound. Also in the UK today we see Mortgage approval numbers and a measure of Consumer Confidence. Elsewhere, Germany has inflation figures, the USA also releases Consumer Confidence figures.
Wednesday 30th September 2015 – We have the latest GDP figures today that could affect Sterling. European data includes Germany releases Retail Sales numbers and Unemployment figures, along with EU wide unemployment figures and inflation. The FED’s Janet Yellen gives another speech – watch for any hint on US monetary policy.
Thursday 1st October 2015 – There is data on manufacturing today from Germany, Europe and the UK, in addition to an ECB monetary policy meeting, all of which could affect GBP/EUR rates. The USA has Manufacturing and Construction data due in the afternoon.
Friday 2nd October 2015 – We end the week with Jobs day in the USA, with Non-Farm Payrolls one of the key releases that could affect the US Dollar this week. The EU releases inflation numbers.
If you would like to know how any of the above data could affect exchange rates, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today.
I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it’s certainly worth getting in touch to see what I can do for you.