Todays report details the factors affecting currency exchange rates for the upcoming week. For current live exchange rates click here.

Anti-climax for the Euro

In what has been nearly a month of talks with creditors, Sunday’s ‘no’ vote could mark a break-through for negotiations to take place.

Sunday’s ‘no’ vote in the referendum as to whether to accept the terms of an international bailout were hailed as ‘brave’ by Greek Prime Minister Alexis Tsipras. Many were expecting the Euro to further weaken due to the ‘no’ vote being labelled by many European officials as a rejection of further talks, however with the Euro holding strong, finishing on a day high of 1.4145 many have labelled this an anti-climax.

After the referendum results were announced, Yanis Varoufakis, the Greek finance minister resigned, having been described as someone ‘who often clashed with its (Greece’s) creditors’. Euclid Tsakalotos will take over the role as finance minister, I believe in hope that he will help Greece reach an agreement with its creditors. Tsakalotos has been described as ‘amiable’, ‘phlegmatic’ and ‘softly spoken’.

It is now imperative that the talks with creditors make some form of progress. Today is a key day for negotiations, today marking the first set of talks after Sunday’s referendum vote. Greece’s banks have been predicted to run out of cash in the next few days, which means that a decision on what kind of limited service the banks can provide, to be made by the Greek government, will hinge entirely on whether the European Central Banks (ECB) governing council decides to amend the provision of Emergency Liquidity Assistance to Greece.

Last time the negotiations with its creditors were seen to going as well, GBP/EUR exchange rates dramatically dropped 6 cents in 7 days. With negotiations now expected to start making progress and the NIESR GDP estimate to be released at 3 p.m. expect to see even more volatility this week for Sterling Euro rates. I would suggest taking advantage of these current rates with a forward contract, where you can fix the current rate of exchange, helping protect your currency from a possible fall in the exchange rates, for up to two years in advance with only small deposit necessary. Please get in contact with the any member of the Foreign Currency Direct team to discuss the options available to you on 01494 725353.

Economic data key to strengthening USD

The Institute of Supply Management (ISM) released the latest non-manufacturing index which shows business conditions in the non-manufacturing sector within the US. The index saw an increase to 56, up from 55.7. The ‘Grexit’ has caused a rippling effect throughout all major currencies, especially as the investor confidence could be at an all-time low following the results of the weekends referendum. I believe this could strengthen the Greenback as the USD is seen as a ‘safe haven’ currency. This combined with the combination of FOMC minutes to be announced on Wednesday, which could give an indication of any potential interest rate hikes on the horizon, may see the Dollar strengthen against Sterling. To take advantage of rates if you are purchasing dollars, it may be wiser to act now rather than later.

Interest rates key for AUD

Sterling Australian Dollar rates have been steadily increasing, seeing the rates hit phenomenal levels in the past month. This morning saw the release of the latest interest-rate announcement from Australia’s central bank, keeping interest rates on hold at 2.0% for the second straight month. The reserve bank has cut rates 250 basis points in recent times. With the central bank slashing rates in both March and February, it seems as though this could be sign of things to come for the Aussie. It may be wise if you are selling AUD to move now, rather than wait for any interest rate changes to further weaken the AUD.

If you would like a free quote please feel free to speak to any of the team on 01494 725353, or sign up for a free, no-obligation account here.


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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.