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
- What now for the US dollar?
- AUD, ZAR, NZD
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 | 2.25% | €5,620 |
| GBP/USD | 1.85% | $5,960 |
| GBP/AUD | 2.1 | AUD 6,560 |
Sterling exchange rates recovered a fraction yesterday after falling below the 1.23 mark against the pound for the first time since the beginning of June on Tuesday. Positivity for the pound was seen following far better retail sales figures for September after they rose 0.6% on the month, beating forecasts for a 0.4% increase.
Recently the trend for GBP/EUR has been heavily against the pound since the four year high of 1.288 in July. In the 3 months since this the pound has lost nearly 4.5% – this means a high low difference in this period on a £200k transfer of over €11,700 proving how volatile the markets are at the moment. Today the volatility could continue and anyone with a focus on sterling should watch out for public sector net borrowing figures this morning at 09:30.
At currencies.co.uk we aim to achieve the best market price we can for our clients and this means keeping in regular contact with updates on current market trends. By helping clients time their exchange it can make a huge difference on the final cost of the currency purchase, should you have an upcoming currency exchange whether this be a property completion, business transaction, inheritance to name just a few, then please contact the office on free phone 0800 328 5884 to get the best deal on your exchange.
Best exchange rates for GBP/EUR
Current market movements for the Euro to me represent a good opportunity, particularly if you are selling Euros. I personally believe the market has priced in expectations for further quantitative easing in the UK and I feel the GBP/EUR range will struggle to breach the 1.22 mark. My general feeling for the Euro is that should Spain request a bailout, and I believe they will, this could lead to some further short term support for the Euro as it will bring much needed confidence to the Euro zone; however I feel the Euro is starting to reach its peak. Longer term I believe this market confidence is unsustainable and believe it will only be a matter of time before problems in Europe resurface and ultimately pressure will be placed back on the Euro. For this reason I would expect GBP/EUR to move back towards 1.25 by Christmas.
Where now for the US dollar?
GBP/USD rates are back above 1.61 just two cents from the year high of 1.63 seen just one month ago. I personally feel the dollar is a good buy at this price as I believe the pound is likely to come under continued pressure as we head towards November’s Bank of England meeting. Personally I can see further extensions of quantitative easing something that will keep the pound under pressure and I see the market remaining relatively stable around the 1.60 and little upside for the pound.
As for EUR/USD – I believe any announcement from Spain will be the major influence for this pair, however current prices at 1.31 are the strongest since May and some 9% stronger than rates at the end of July. Should you have a need to convert Euros to dollars and you would like to take advantage of these favourable rates please contact your broker.
AUD, NZD and ZAR
Recently trends for these three currencies have been very much in Sterling’s favour. We hit a 3 month high against the AUD and NZD earlier in the month with both showing gains in the regions of 6% since the lows of August. Substantial gains have also been seen against the ZAR with rates at the highest level since March 2009 last week. Rates have fallen nearly 3% since, however are still some 5.5% better than early August.
Market conditions for these three currencies are particularly volatile at the moment as they are heavily influenced by commodity prices and levels of investor confidence. With investor confidence relatively low, clients have been selling riskier assets (including the AUD, NZD and ZAR) to look for safer options. Should Spain request a bailout I believe this will give investors a much needed boost in confidence levels and also risk appetite. As a result you could see a drive towards these three currencies due to the higher yields they offer. An increase in demand means the more expensive a product will become and should demand increase for the AUD, NZD and ZAR then anyone buying these currencies in the weeks to come may have a nasty surprise. To avoid this situation and to take advantage of the recent attractive prices please contact the office on 01494 725353
For more information about our service and the many currencies we trade please contact the office on free phone 0800 328 5884
