Getting the best exchange rate is aided by an understanding of what is driving rates and the service of a specialist currency broker. You can see below movements in the last month affecting Pound Sterling rates when buying £200,000 of three majorly traded currencies buying at highs and lows:
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 3.58% | €8,882 |
| GBP/USD | 3.68% | $11,560 |
| GBP/NZD | 3.32% | NZD 13,684 |
Pound Sterling Focus
To address the lack of growth and jobs in the economy the Bank of England has used Quantitative Easing to provide a shot in the arm. Also known as printing money QE generally has a negative effect on the currency concerned. With mixed but generally negative tones being set for the pound by economic data releases more QE seems inevitable and this morning we may see some indicators as to when this may be.
DATAWATCH – Bank of England Minutes 09.30 am TODAY
Today we find out the minutes from the September Bank of England Interest Rate setting meeting. Today will provide insight as to how many MPC (Monetary Policy Committee) members voted (or didn’t vote) for QE. If you have a transaction involving the pound this morning could be crucial. To avoid disappointment speak to one of our experienced team today on our Freephone number 0800 328 5884.
Will GBPEUR get to 1.30?
Anyone with an interest in GBPEUR will have noticed the rate fall significantly in the last 8 weeks. From a high of 1.2860 the rate has fallen over 5 cents to the low point seen last week of 1.2330. The rate came back above 1.24 yesterday on renewed Spanish banking fears but for the time being the best levels appear to have passed.
We have been warning clients the rate was likely to drop and this makes this morning’s data even more important. Even with the on-going uncertainty in Europe the recent good news for the Euro means it is unlikely we will see a return to the best levels seen this year.
GBPEUR is still trading at the 3 and a half year highs touched this Summer and with the uncertainty still ahead for the UK and the pound I feel this represents a great buying opportunity. All too often GBPEUR has bombed in recent years following poor UK data and returning confidence for the single currency. I think we are in such a situation again and would not be surprised to see a move towards the 1.20 mark soon. Anyone who missed out trading at rates in the 1.25-1.27 range could very easily soon be kicking themselves for not having traded when rates were at 1.23-1.25 as well.
Whilst I personally think the rate will slowly fall, Spanish banks were again in the news yesterday. Eurozone horror stories will undoubtedly pepper headlines, but on balance Mario Draghi’s confirmation the ‘Euro is Irreversible’ and his intent to do ‘everything to preserve’ it, means for me 1.30 is well out of the question and 1.20 will I believe be the next key milestone. To avoid disappointment whatever your requirements make an enquiry here today.
Will GBPUSD get much better?
High expectations of QE for the US were met last week as we regularly highlighted via our market reports. The question now is how long will these excellent GBPUSD levels last? Well in my opinion not much longer. The confidence presented to the market by the Fed decision will not disappear overnight but with continued Eurozone uncertainty and slowdowns occurring in most major economies, the prospect of further USD strength as a result of global uncertainty seems high. Historically the wave of confidence following QE decisions by the Fed have been short lived and with the current global economic conditions considered, I think this could happen soon.
‘If you are buying Dollars I would not hang around too long in case things change. The looming US election and ‘fiscal cliff’ (a series of spending cuts and tax hikes due for 2013) are bound to create much volatility on the Dollar and as we saw last week this will affect all currencies, not just the Dollar.’
Will GBPNZD get to 2?
A slight return to riskier assets following the Fed decision last week saw the Kiwi make some gains against the pound but yesterday’s news that Australia may be looking at further monetary easing, as well as new reports of an end to the commodities boom in New Zealand’s biggest trading partner have halted Kiwi gains and provides more room for losses.
At 10.45 tonight we have GDP (Gross Domestic Product) for New Zealand which is predicted to show a slowdown. I feel a move back towards 2 is more likely the Kiwi highs of sub 1.90 seen earlier this year.
Breaking NEWS – Bank of Japan announces Stimulus
Another week, another round of monetary easing! 10 trillion JPY was pledged to the stagnant Japanese economy last night by the Bank of Japan. This has weakened the currency by 0.5% in early morning trading so speak to us if you have Yen trades to consider.
Dealing with us is completely free and at no obligation. Our contracts options allow you to forward book rates for up to two years, and insert stops and limits into the market to ensure your exchange doesn’t become too expensive. Call now on 0800 328 5884 or click here to open a free no obligation trading facility in minutes
