Tag Archives: Euro

Currency Update

Yesterday Wednesday 15th saw Greece’s troubles resurface. With Greece facing a deepening recession, the Greek Prime Minister is set to meet with his French, German and Luxemburg counterparts next week to persuade Eurozone leaders to extend the period of austerity from two to four years, essentially planning to reduce the Greek budget deficit by 1.5% of GDP annually compared to the previous agreement of 2.5%. Due to the slower pace of deficit reduction it is believed an additional £20bn of funding would be required to support Greece.

In the UK, yesterday’s jobs figures continued to defy the recession with unemployment down to 8% and the claimant count dropping by 5,900 in July. Minutes released by the Bank of England also confirmed that the Monetary Policy Committee was unanimous in its decision to leave the bank rate unchanged at 0.5% and to maintain its Quantitative Easing Asset Purchase Programme at its current level of £375bn. Unlike in previous meetings, the bank did not hint towards a bias of further rate cuts giving Sterling a further boost. It is expected that the Bank will gauge the impact of the new Funding for Lending Scheme and the completion of its current £50bn extension of QE in November before it makes a decision on more monetary easing. Today, UK retail sales also beat market expectations growing by 2.8% year on year.

The better than expected news from the UK, coupled with the Eurozone’s on-going troubles has pushed GBPEUR higher towards 1.28, currently trading at 1.2793 (EURGBP 0.7817).

Elsewhere the Pound trades between 1.56-1.57 against the US Dollar and the Euro trades at 1.23-1.24 against the US Dollar on the interbank market.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote or for advice and tailored solutions to your currency requirements.

16/08/12 10:30

EURO

The Euro has continued to come under strong selling pressure as the European Central Bank has indicated that it will not accept Greek government bonds as collateral. EURUSD has fallen from the morning high of 1.2282 to a low of 1.2144. 1.2144 representing the lowest EURUSD exchange rate since June 2010 when the rate hit a low of 1.1876.

The Pound has made strong gains against the weakening Euro hitting a high earlier of 1.2866, the highest level since October 2008. Against the US Dollar the Pound tracked the sharp falls in EURUSD with GBP falling from 1.5724 to a low of 1.5626.

20/07/12 15:20

BoE and ECB

As expected the Bank of England has increased its programme of Quantitative Easing by an additional £50bn taking the total asset purchase scheme to £375bn. The Bank also decided to hold the bank rate at 0.50%.

In Europe, the European Central Bank cut its key interest rate by 0.25% to 0.75% a record low.

On the interbank market the Pound has climbed back above 1.25 against the Euro, currently at 1.2525. Whilst the Euro has fallen back below 1.25 against the US Dollar and currently trades at 1.2440. The Pound continues to trade between 1.55 and 1.56 against the US Dollar.

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

05/07/12 13:10

Spanish Bank Bailout fund

The markets have responded favourably to the agreed bailout of Spain’s banks. Eurozone ministers have agreed to lend Spain as much as EUR 100bn to fund its troubled banks. Equities in Asia and Europe have opened higher and Spain’s bond yields have also dropped back below 6%, reducing the cost of funding Spain’s debt.

The Euro also opened a cent higher against the US Dollar, hitting a high earlier of 1.2668 and ¾ pence higher against the Pound hitting a high earlier of 0.8155 (GBPEUR 1.2262). The Euro has however since pared the majority of these gains and currently trades at 1.2550 against the US Dollar and 0.8075 (1.2384) against the Pound.

As the week progresses the markets focus will turn to the upcoming Greek elections on June 17th. Many are viewing the elections as a referendum on Greece’s membership of the European Monetary Union. If Greece renounces its bailout terms, Greece’s international partners could stop providing the rescue loans which the country depends on. That could lead Greece to default and potentially force Greece out of the Eurozone.

12:30 11/06/12

GBPEUR @ its highest level since 2008.

The Pound has appreciated following today’s Bank of England announcement that the Monetary Policy Committee has kept interest rates unchanged at 0.50% and Quantitative Easing at its current level of £325bn. Whilst this was widely expected, the possible threat of further QE always poses a threat to the value of the Pound and as such the market was reassured by the announcement and the Pound has appreciated.

Because of the continuing economic and political woes facing the Eurozone the Pound has now appreciated to its highest level against the Euro since November 2008, hitting an interbank high of 1.2496 earlier today.

Currency Matters can offer a number of products which can help you plan your future currency requirements. By using a Forward Contract it is possible to purchase currency today at a guaranteed exchange rate for settlement at a later date. A small deposit is required to secure a Forward Contract with the balance due by the agreed future value date.

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

GBPEUR 19 MONTH HIGH

The Pound has appreciated to a 19 month high against the Euro and towards recent highs against the US Dollar following the release of minutes from the Bank of England’s Monetary Policy Committee (MPC) April meeting. The minutes showed that the nine member MPC voted 8-1 in favour of keeping the Bank’s Quantitative Easing Asset Purchase Programme (QE) on hold at its current level of £325bn, with only David Miles voting for a £25bn expansion. At the previous meeting in March, two members David Miles and Adam Posen had voted for a £25bn expansion, the defection of Adam Posen to voting for no change to QE, coupled with yesterday’s higher than expected UK Consumer Price Index inflation data has reined in expectations of further QE from the Bank of England. As previously discussed, aggressive QE from the Bank of England has posed a significant threat to the value of the Pound. As this threat recedes, the Pound has appreciated.

Currency Matters can offer a number of products which can help you plan your future currency requirements. By using a Forward Contract it is possible to purchase currency today at a guaranteed exchange rate for settlement at a later date. A small deposit is required to secure a Forward Contract with the balance due by the agreed future value date.

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

11:30 18/04/12

Sterling-Euro Highs

The Pound has pushed higher towards the most recent GBPEUR highs of 1.2161 (EURGBP 0.8223) last seen on the 9th January 2012, hitting a high so far of 1.2153 before falling back slightly. The UK with its AAA credit rating is currently being viewed as a relative safe haven as investors continue to be concerned about the on-going Euro zone debt crisis. Switzerland the traditional safe haven has lost some of its safe haven status as the Swiss National Bank continues to enforce the EURCHF floor at 1.20. The Pound also continues to trade near its recent highs against the USD at 1.59.
EURUSD 1.3170
EURGBP 0.8250
GBPEUR 1.2120
GBPUSD 1.5960
GBPCHF 1.4570
EURCHF 1.2020
The following rates are shown for indicative purposes only. Please note the rate you are able to achieve will depend on the amount of currency being purchased. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
12/04/12 12:40

Greek Debt Swap Deadline

The Euro has recovered mildly ahead of Thursday’s Greek debt swap deadline. Investors have until Thursday 20:00 GMT to agree to swap their Greek bonds for new bonds worth approximately 70% less. 75% of bond holders need to accept the deal for it to pass. The European Union and the International Monetary Fund have warned that if the deal is not approved, Greece will not receive its latest bailout of €130bn, likely leading to a Greek default.

On the Interbank market the Euro currently trades at:
EURUSD 1.3150
EURGBP 0.8360 (GBPEUR 1.1961)
EURCHF 1.2055
EURJPY 106.20

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or to discuss how Currency Matters can offer you significant savings and eliminate currency risk.

10:45 07/03/12

UK GDP & BoE

The Pound has recovered back above 1.20 against the Euro and continues to trade around 1.55 against the US Dollar on the interbank market.

Despite UK Gross Domestic Product (GDP) data showing that the UK economy contracted by 0.2% in the final quarter of 2011, the initial market reaction suggests that many expected the data could have been worse.

The recent UK economic data, coupled with the European debt crisis and anaemic global growth points to the UK struggling to avoid entering into another technical recession i.e. two consecutive quarters of negative GDP growth.

Whilst many analysts are hopeful of a mild or shallow recession in the UK, the fragile outlook increases the likelihood of a further expansion of the Bank of England’s Quantitative Easing Asset Purchase Programme (QE). Moreover, minutes released today from the Bank of England’s last Monetary Policy Committee (MPC) meeting held on January 12th indicated that a number of MPC members believed it was a likely a further expansion of asset purchases (QE) would be required, possibly as soon as the next MPC meeting due on the 9th February.

Aggressive QE from the Bank of England would pose a threat to the Pounds value and is one of the factors preventing the Pound forging higher against the troubled Euro. The Pound may be able to hold against a troubled Euro but could struggle against the US Dollar.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or to discuss how Currency Matters can offer you significant savings and eliminate currency risk.

Euro woes

The Euro has continued to depreciate as markets become increasingly unconvinced with the outcome of last week’s EU summit. European bond auctions will be monitored as Germany and Italy auction €5b of 2 year bonds and €5b respectively.

Pressure was also increased on the Euro following last night’s Federal Reserve decision to hold interest rates and withhold additional stimulus at this time. The resulting falls in equity markets increasing safe heaven flows.

The Euro has fallen to its lowest level against the US Dollar since January, currently trading at 1.3040 on the interbank market. The Pound is pushing towards 1.19 against the Euro, currently at 1.1890, the highest level since February. The Pound is currently trading between 1.54 and 1.55 against the US Dollar.

The following rates are based on the current interbank market and are shown for indicative purposes only. Please do not hesitate to contact the dealing team on 01695 581 669 or info@currencymatters.co.uk for a live quote.

14/12/11 09:45