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Buying rates for Euros and Australian Dollars testing new highs, but GBP/USD lagging behind (Joshua Privett)

Thursday, November 24, 2016 10:33
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The Pound has had a fantastic two weeks to say the least after what had been heavy drop after heavy drop on buying Euro and Dollar rates of exchange. We are now entering a period of stability following a stint where in two weeks the market has moved more than the last three months combined for GBP/EUR, GBP/AUD and GBP/USD.

Buying Euro rates in particular have been the main beneficiary from this recent movement, being hit by a Trump Presidency from two angles which explain the 7% plus gains since November 9th.

Due to the special relationship between the US Dollar and the Euro, a stronger Dollar tends to draw capital away from the Euro. Whilst Trump is a wildcard his very public support for a US interest rate hike in December is fueling heavy Dollar interest, with investors in the Euro diverting their attention to the other side of the Atlantic. The Euro thus deflates as disinterested parties go elsewhere.

Furthermore, the expectation of a change in the US stance of a hostile Obama to a supportive Trump for the UK leaving the European Union has also buoyed market confidence in a better result for the UK in upcoming negotiations.

Now that the Autumn statement has passed, with Hammond’s praise of positive impact of the Bank of England’s interest rate cut and increase in monetary stimulus suggestive that further emergency stimulus is not necessary in the UK since the vote, the Pound can move forward at its gradual pace of improvement barring any political surprises.

Without much economic data out between now and the beginning of December when the cycle begins once again with a fresh look at November, buying Euro and Australian Dollar rates will likely continue to benefit from a stronger Pound.

Apart from the unknowable factor which is the Supreme Court’s decision over the role of Parliament in the Brexit to be decided on December 10th, red flags and flashing sirens are abound for anyone with a GBP/EUR, GBP/AUD, or GBP/USD requirement in the latter part of December.

Profit taking and protective trading will likely see the Pound undercut quite heavily as markets relieve themselves of riskier currencies ahead of the Christmas period when trading winds down. A more muted version of this actually happens every Friday, so feel free to have a look at rates on Friday afternoon to see if this materializes and get a better understanding of how markets are functioning at the moment.

In the meantime, Sterling buyers may be wise to move quite quickly if the time period for your transfer does not allow for you to wait for this latter December period.

Conversely Euro and Australian Dollar buyers may be wise to monitor market rates over the next few weeks, particularly in the run up to December 10th.

If you are planning a currency purchase involving the Pound, it is certainly worth your time contacting me on to order to explore the options open to you to seize any peaks which emerge on GBP/EUR, GBP/AUD and GBP/USD, and to safeguard your transfer from any unexpected turns in global politics and the financial world.

I offer my customers a proactive service to make sure you remain a well informed purchaser and avoid being ‘last to the party’ when attractive levels for buying or selling suddenly emerge. I also work for one of the UK’s leading currency exchange brokerages who provide highly competitive currency exchange rates.

I will answer your email as soon as I am able to since time can very regularly be of the essence when it comes to currency queries. Please feel free also to contact me 01494 787 478 during office hours (8:30-6pm) and ask the reception team to be put through to my line (Joshua).


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