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Buying Euro and Dollar rates collapse from mass Pound panic sell-off (Joshua Privett)

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Like clockwork Euro and Dollar buyers have been hit repeatedly on Friday afternoons, with the actions of currency speculators drilling at the foundations of the Pound as we enter the weekend period. However, this time the fall was much more serious.

Traders at high street institutions search for a stable currency with which to allocate their profits for the weekend. For obvious reasons, since the Leave vote the Pound hasn’t been high on this list of safe currencies which are expected to hold their value until traders return to their desks on Monday.

So we regularly see the Pound lose its value in this period as its demand falls flat, but those with a Euro and Dollar buying requirement would have been shocked on Friday to suddenly be looking at GBP/EUR rates at 1.16 and GBP/USD below 1.30 when only the day before both were close to 6 week highs.

The reason for this exaggerated fall was a more agitated marker than normal. Thursday’s indications from the Bank of England that another interest cut in the UK was likely in the next 3 months meant the commonplace, and largely gentle, Friday sell-off of the Pound evolved into a flood of investors seeking to relieve themselves of Sterling, and quick.

Normally, on Monday we see a recovery in Sterling’s value against the likes of the Euro and various Dollars. When traders return to their desk the readily available and cheap Sterling suddenly presents a tempting opportunity. Which hopefully will provide some sollace to Euro and Dollar buyers who will have to see 1.16 and 1.29 on their screens all weekend whilst markets are closed.

Monday should show a small improvement for anyone with a GBP/EUR, GBP/USD or GBP/AUD requirement in that case.

Following this, on Tuesday we have data from German producers which should reflect the marginal slowing of the German economy as shown in its other data sets seen this month. There is a strong potential here to garner further respite for Euro buyers if the Eurozone’s powerhouse economy continues to come into question.

However, Wednesday should present alarm bells for anyone using Sterling to purchase a foreign currency. Public sector borrowing figures will be released showing how much the UK borrowed during August. With the step-up in emergency financial stimulus from the Bank of England, and the sudden need to form new departments and hire new staff to implement a Brexit this is expected to skyrocket £11bn higher than what was produced in July.

The confirmation of news such as this would be enough to cause a similar panic sell to what was seen on Friday.

So it seems that Euro buyers have the greatest opportunity to gain at the beginning of the week, whilst US and Australian Dollar buyers may see only marginal improvements, before all three major currency are expected gain signficant expense on Wednesday with the weakening of the Pound. The important question at the moment is not really whether this will happen, but how severe will it be?

If you are planning a Euro or Dollar purchase over the next few months then this announcement from the Bank of England has changed the landscape of your purchase. We are currently still 2.5 cents higher on GBP/EUR and GBP/USD than we were in the middle of August, with the potential for some recouperation of Friday’s losses over the next few days. Should any opportunities emerge during this period, it may be wise to secure them for an imminent purchase, or one a few months down the line in order to safeguard your budget.

There are a number of ways to ensure that any desired levels you are aiming for during this period are seized immediately.

With a saturated market it is important not to be ‘last to the party’ given that any rush to buy Euros or Dollars will make them a more expensive prospect through higher demand.

To discuss how to maximise the potential available over the next few days you can contact me over the weekend whilst markets are closed on [email protected] and I will reply to you as soon as I am able to.

I have automatic purchase orders, and rate alerts at my disposal to help my customers secure attractive exchange rates, and I have never had an issue beating the rates of exchange on offer elsewhere. If you are not a regular reader, I will also mention that you can fix rates of exchange for a pre-determined period of time as they are that day if you are planning a purchase for later in the year.

Euro or Dollar sellers can also get in contact to discuss how best to secure the likely opportunities on offer later in the month. You can also fill out the form below and I will contact you as soon as I am able to.

[contact-form]


Source: http://www.poundsterlingforecast.com/2016/09/18/buying-euro-and-dollar-rates-collapse-from-mass-pound-panic-sell-off-joshua-privett/


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