The following report will look at how GBP exchange rates are currently performing and the affect this may have should you be buying foreign currency. It will look at the following areas:
- GBP/EUR
- USD
- Will we see QE?
- Upcoming data releases
The below table shows the market movements for a number of currency pairings in the last 30 days:
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 2.4% | €5,820 |
| GBP/USD | 1.25% | $3,940 |
| GBP/CAD | 2.6% | CAD 8,140 |
GBP/EUR
Sterling hit a 3 week high against the Euro on Friday with mid-market rates hitting 1.2496. With the recent GDP (Gross Domestic Product) data showing that the UK economy has increased by 1% and that the UK has pulled away from a recession, GBP has had a steady increase against the Euro.
Not only is Sterling getting stronger against the Euro but also the Euro is weakening. With political uncertainty in Greece and concerns whether it will receive further funding. This paired with no one being quite sure when Spain will ask for a bailout is having a derogatory effect on Euro rates.
In my opinion this is a good time for anyone that is buying Euros but I still think these rates could get even better. I believe that the ECB (European Central Bank) is a lot more likely to ease their countries monetary problems than the BoE (Bank of England). With that in mind I believe that we could see GBP get up around the 1.26 mark, however we have seen the pound gain nearly 2.5% since last Thursday, therefore buying rates are still representing a good opportunity in my opinion.
If you have any questions or would like to take advantage of these shifts in the market then please contact 0800 328 5884 to speak to one of our specialized currency brokers.
GBP/USD
GBP/USD rates have been on the up recently, hitting a one week high of 1.6144 on Thursday, but they are slowly starting to come back down again. New GDP data in the U.S has shown an unexpected 2% increase to the U.S economy in Q3. This is largely down to government spending and decreased unemployment rates. This had a positive effect on the USD with rates falling to 1.6110.
With the U.S presidential election on November 6th we could see a lot more movement with USD due to uncertainty surrounding political stability. If you have any USD currency requirements in the near future it may be worth keeping a close eye on this presidential election. Alternatively call straight through to our dealing floor on 0800 328 5884 for an expert opinion from one of experienced currency brokers and let us update you on how this is affecting the USD.
Will we see QE?
It has been rumored for a while and looked fairly likely that we would see more QE (quantitative easing) in November but with the recent announcement of a 1% increase in UK economic growth it seems as though these plans could have been put on hold. It looks likely now that this will be looked at again after the first quarter of 2013.
Quantitative Easing is normally seen as negative to a currency as it makes the currency more readily available, so with investors and analysts alike more confident that QE won’t go ahead next month that will give the Sterling another boost, however a lot of analysts are sticking with the idea that QE will happen next month as this unexpected boost in the UK economy is largely down the The London Olympics. They believe that this could just be a temporary rise for sterling with The Olympics figures just hiding a weaker underlying economy.
If you have any questions then why not call 0800 328 5884 to speak with your personal currency broker for their expert opinion.
Upcoming data releases
Oct 29th at 9am – Halifax house prices (UK) – A high reading in this would be seen as positive for GBP whereas a low reading will normally have the opposite effect.
Oct 29th at 10:30am – UK consumer credit report – This will show whether consumers have enough to afford large expenses or whether they are borrowing to live beyond their means
Oct 29th at 2:20pm – Germany consumer price index – This measures the average price change for all goods and services purchased by households
Oct 30th at 9am – Mario Draghis speech – The ECB president will give a press conference on how the ECB see the European economy
Oct 31st at 1:30pm – Gross Domestic Product (Canada) – This is the total value of all goods and services produced by Canada
For more information about our service and the many currencies we trade please contact the dealing floor on free phone 0800 328 5884
