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GBP/EUR opened the London session at €1.1763, rising to an intraday high of €1.1794 to end the day at €1.1781. To put things into monetary terms purchasing €250k at the high of yesterday compared to the low of one month ago would be a saving of over £7,000.
Yesterday saw sterling gain against our two most commonly traded currency pairs GBP/EUR and Cable bringing GBP/EUR to a fresh one-month high. The gains had been caused better than expected average earnings index figures. With all economic data, volatility is often experienced if the readings deviate from the expected. In this case the figure came in at 2.3% beating the forecast of 2.1% which saw the pound strengthen as a result.
The positive data yesterday has given some suggestion that the BOE may look at a rate hike over the next few months. This would be highly positive for the UK in the long term as an increase in interest rates would boost the interest of the pound to overseas investors thus strengthening the pound.
The graph below shows GBP/EUR movement over the past month.
GBP/EUR 1 month exchange rate graph
As mentioned in my colleague James Baxter’s report yesterday, one of the main factors moving exchange rates recently seems to be geopolitical risk, due to this data release that normally have a large effect may see a slightly muted response.
For clients looking to purchase a property overseas within the next two years in may be worth considering a forward contract. This enables you to fix todays exchange rate for anytime up to two years into the future by simply placing a small margin against the trade. This will act as a great budgeting tool as you will know exactly what the property will cost in your currency. A forward will also protect you against any adverse market movement.
Get in Touch
When exchanging funds, timing has a huge part to play in the return you will receive. Market volatility is caused by a number of factors, one being political uncertainty. When keeping in contact with your expert broker at Foremost Currency Group, we can act as your eyes and ears to help you to navigate the currency markets and tailor a bespoke strategy to help with both personal and business requirements. Whether you are looking to mitigate risk or take advantage of recent gains call us on 01442892060 or alternatively follow this link to open a free, no obligation trading facility today.
Later this afternoon at 13:30 Canada will release its monthly manufacturing sales figures along with PPI and unemployment claims from the US. At 15:00 the US will release their preliminary UoM consumer sentiment figures. Finally, at 15:30 there will be a speech from BOC governor Poloz. With all of these releases any deviation from the expected will be likely to causes volatility in both AUD, USD and CAD crosses.
T: 01442 892 060