Category Archives: Currency News

EURO

Yesterday the Euro surged across the board after the European Central Bank (ECB) disappointed market expectations of significant monetary easing, keeping the main interest rate at 0.05% and only tweaking the deposit rate from -0.20% to -0.30%. The ECB also extended their €60 billion a year Quantitative Easing asset purchase program for an additional six months, to March 2017. Given the struggling Eurozone economy, the markets had expected a substantial increase to the asset purchase program or significant reductions to other ECB interest rates. The lack of any substantial moves by the ECB surprised the markets and the Euro responded with sharp gains against the US Dollar, Pound and other major currencies. EURUSD appreciated from 1.0506 to 1.0981; EURGBP appreciated from 0.7023 to 0.7251 (GBPEUR 1.4239 to 1.3791). The Pound followed the Euro higher against the US Dollar although not to the same extent with GBPUSD moving from a low of 1.4902 to 1.5158.

POUND FALLS, US DOLLAR SOARS.

Yesterday 05/11 the Pound tumbled in value following the Bank of England’s latest report which downgraded both the UK growth and inflation forecast and subsequently pushed out market expectations of a Bank of England interest rate rise. The Pound fell over 1% against all major currencies with GBP/EUR falling from 1.4199 to 1.3966 and GBP/USD falling from 1.5401 to 1.5203.

This afternoon 06/11 the US Dollar has appreciated strongly, more than 1%, following overwhelmingly strong US employment data. The US Dollar appreciated strongly against the Euro forcing EUR/USD down from an earlier high of 1.0892 to a low of 1.0707. The US Dollar also appreciated against the Pound with GBP/USD falling from 1.5219 to 1.5030. The US Dollar also appreciated against the Swiss Franc with USD/CHF appreciating from 0.9946, through parity to 1.0065. With the US Dollar appreciating more against the Euro than the Pound, GBP/EUR recovered from 1.3896 to 1.4065.

There is lots of global economic data due for release next week and we also have speeches from Bank of England Governor Mark Carney and ECB President Mario Draghi on Wednesday 11/11 which both have the potential to move the market.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or for a live

 

 

Pound (GBP) Falls

The Pound has fallen sharply today following weak UK inflation data. The headline Consumer Price Index (CPI) reading was -0.1% year on year in September; much worse than market expectations of +0.2%.

The Pound fell more than 1% against the US Dollar and Euro hitting a low of 1.5201 and 1.3347 before recovering approx ¼ cent towards the end of the day.

Currency Matters can offer a number of products which can help you eliminate currency risk. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or for a live quote.

Forward Contract (Fixed Date): A Forward Contract is one which is agreed for settlement at some fixed point in the future, after two working days. The Forward price is based on the current Spot price and adjusted for the interest rate differential between the currencies being bought and sold. This Forward rate may be more or less than the current Spot price. A Forward Contract guarantees the exchange rate you will receive on your future requirement. A small deposit is required to secure a Forward Contract.

Forward Contract (Variable Date): Similar to the description of the Forward Contract above, but settlement is agreed to occur between two dates, at the client’s discretion, rather than on a fixed date. This is particularly useful when you don’t know precisely when you would need to settle with your counterparty.

Market Orders: Currency Matters offer the facility to place market orders – either on a “limit” basis or on a “stop” basis. For example, you can place a limit order to buy your currency at a predetermined price, above the current rate. Alternatively you can place a stop order to buy your currency at a predetermined rate, below the current rate. We can also work orders on a “one cancels other” basis, so if you have both a limit and a stop order in place, and one is executed, the remaining order is automatically cancelled.

COMPARING CURRENCY MATTERS

CASE STUDY:

A corporate client in the UK needed to pay an overseas supplier USD 170,000.00. In this example the client saved GBP 4,581.28

  Bank Currency Matters
USD Purchased USD 170,000.00 USD 170,000.00
Exchange Rate @ 1.4820 @ 1.5433
GBP Cost GBP 114,709.85 GBP 110,153.57
Bank Fee GBP 25.00 GBP 0.00
Total Cost GBP 114,734.85 GBP 110,153.57
TOTAL SAVING   GBP 4,581.28

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.

Currency Matters

The Euro and US Dollar generally both traded lower following quieter markets during yesterday’s US bank holiday and as markets begin to shrug of concerns of China’s slowing economy increasing risk appetite. As a result GBP/USD appreciated from a low of 1.5162 yesterday to a high so far today of 1.5404 and currently trades mid-morning at 1.5380. GBP/EUR also appreciated to a high of 1.3786 after trading as low as 1.3592 yesterday. EUR/USD continues to trade between 1.11 and 1.12 and currently trades at 1.1160.

The currency markets are extremely volatile and Currency Matters can offer a number of products which can help eliminate currency risk and get you the best exchange rate available in the market.

CURRENCY MATTERS PRODUCTS:

Very simply, Currency Matters can send or receive any deliverable currency to or from any valid bank account anywhere in the world.

Spot foreign exchange:

This is the traditional foreign exchange contract where you buy a currency for settlement in two working days. Upon settlement we will make a payment according to your instructions. We will save you money by offering you a much better exchange rate compared to your high street bank.

 

Same day / next day foreign exchange:

We can offer same day and next day settlement for some of the major currencies, depending on amount and availability. We will save you money by offering you a much better exchange rate compared to your high street bank.

 

Forward Contract (Fixed Date):

A Forward Contract is one which is agreed for settlement at some fixed point in the future, after two working days. The Forward price is based on the current Spot price and adjusted for the interest rate differential between the currencies being bought and sold. This Forward rate may be more or less than the current Spot price. A small deposit is required to secure a Forward Contract. We will save you money by offering you a much better exchange rate compared to your high street bank.

 

Forward Contract (Variable Date):

Similar to the description of the Forward Contract above, but settlement is agreed to occur between two dates, at the client’s discretion, rather than on a fixed date. This is particularly useful when you don’t know precisely when you would need to settle with your counterparty. We will save you money by offering you a much better exchange rate compared to your high street bank.

 

Market Orders:

Currency Matters offer the facility to place market orders – either on a “limit” basis or on a “stop” basis. For example, you can place a limit order to buy your currency at a predetermined price, above the current rate. Alternatively you can place a stop order to buy your currency at a predetermined rate, below the current rate. We can also work orders on a “one cancels other” basis, so if you have both a limit and a stop order in place, and one is executed, the remaining order is automatically cancelled.

Please do not hesitate to contact a member of the dealing team on telephone +44 (0) 1695 581 669 or email info@currencymatters.co.uk for further information.

 

 

POUND APPRECIATES FOLLOWING STRONGER THAN EXPECTED UK INFLATION DATA

The Pound has strengthened this morning following the release of stronger than expected UK inflation data with Core Consumer Prices rising at an annual pace of 1.2% adding weight to the argument that the Bank of England should consider increasing UK interest rates which have stood at their historic low of 0.50% for more than six years.

This follows recent comments from Bank of England Monetary Policy Committee member Kristin Forbes who argued that “Waiting too long would risk undermining the recovery – especially if interest rates then need to be increased faster than the gradual path which we expect” and comments from MPC member David Miles who said there are arguments for “stating the journey now” towards a rate hike.

An increase in interest rates makes the associated currency more attractive as global investors seek yield in a global economy with historically low interest rates. Both the Federal Reserve in the US and the Bank of England in the UK are now expected to increase rates either late in 2015 or in 2016. Most expectations are for the Federal Reserve to increase rates before the Bank of England with the Bank of England more likely to raise rates in 2016.

The Pound increased to 1.5670 against the US Dollar (from 1.5598 before the inflation data) and increased to 1.4154 against the Euro (from 1.4085 before the inflation data).

GBP Higher

The Pound has appreciated following better than expected UK earnings data as earnings increased by 2.7%. Moreover, minutes released by the Bank of England showed that the Bank was unanimous in voting to hold its interest rate at 0.50% and its asset purchase facility at £375bn. Notably the Bank is now expecting UK consumer prices to pick up pace by the end of the year. This has pushed the Pound through 1.57 against the US Dollar and through 1.39 against the Euro.

EUR Rebound

The Euro rebounded strongly yesterday 02nd June amid optimism that Greece is moving closer to reaching an agreement with its international creditors and reports that the European Central Bank increased the level of emergency cash available to Greek banks by €500m. Moreover, inflation data released from the Eurozone suggested that deflation risks have subsided as the Consumer Price Index (Core YoY) beat market expectations at 0.90%.

Today 03rd June, European Commission President Jean-Claude Junker is set to meet with Greek Prime Minister Alexis Tsipras and the European Central Bank will also meet to make its interest rate decision. It is expected the European Central Bank will hold its key interest rate at the record low of 0.50% whilst possibly accelerate their EUR60bn per month asset purchase program. The outcomes of both meetings will be watched closely by market participants.

Elsewhere we have a raft of data due out of the US this afternoon including mortgage approvals, employment data, trade balance and Purchasing Managers Index data. This evening the Federal Reserve will also release its Beige Book economic report.

As a result the Euro has spiked higher against the US Dollar and the Pound with EUR/USD hitting a high of 1.1193 and EUR/GBP pushing through 0.73p (GBP/EUR below 1.37). Elsewhere, GBP/USD has traded between 1.5375 and 1.5215.

Pound Climbs following Conservative Overall Majority in UK General Election

UK financial markets rallied on Friday as election results pointed to an outright victory for the Conservative Party, wiping away the uncertainty of a hung parliament.

The Pound has rallied across the board and was up 2% against the Euro, pushing EUR/GBP down to 0.7226p (GBP/EUR 1.3839). This put sterling on course for its biggest one-day rise against the single currency since early 2009.

The Pound rose against the US Dollar hitting a high of 1.5521 before settling back to trade around 1.5450.

Whilst the short term risks of a hung parliament have diminished, longer term risks remain namely the proposed referendum on the UK remaining in the EU and the possibility of another Scottish independence referendum following the Scottish National Party’s victory in Scotland.

ECB & BoE Reaction: EUR Lower

The European Central Bank (ECB) will start its new government bond-buying programme on 9th March hoping to boost growth and lift inflation in the ailing Eurozone. The ECB plans to spend €60bn a month on buying sovereign bonds and some private sector assets with the purchases likely to last until at least September 2016.

In the UK the Bank of England (BoE) kept rates unchanged, meaning they have now been at their record low of 0.50% for six years. Whist none of the leading economists polled by Reuters expect the Bank of England Monetary Policy Committee to raise rates before the UK general election in May, there are some expectations that the BoE may increase rates sooner than currently forecast by the markets meaning that the ECB and BoE could have diverging monetary policies, thus supporting the Pound further against the Euro.

The Euro (EUR) fell to its lowest level against the US Dollar (USD) in over 11 years hitting a low so far of 1.1008 on the interbank market. The Euro also fell against the Pound (GBP) with EUR/GBP hitting a low of 0.7224 (GBP/EUR high 1.3842).