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Buying rates for Euros testing new two-month highs (Joshua Privett)

Thursday, November 24, 2016 11:01
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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 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.

Buying Euro rates in particular have enjoyed the attention of a more promising marketplace for Sterling holders, being hit by a Trump Presidency from two angles which explains the 7% plus gains following his confirmation as President-elect.

Due to the special relationship between the US Dollar and the Euro, a stronger Dollar tends to draw value away from the Euro. Indeed Trump is a wildcard but his very public support for an interest rate hike in the States in early December is driving even greater Dollar interest, with investors in the Euro diverting their attention across the Ocean to greater opportunities…they hope. The Euro thus deflates as disinterested parties go elsewhere.

Furthermore, the expectation of a change in the US stance of a hostile Obama swapping to a supportive Trump for the UK’s upcoming negotiations with the EU is bolstering confidence in Sterling.

Now that the Autumn statement has passed, with Hammond’s praise for the UK economy’s resilience to such a shock disbarring suggestions that further interest rate cuts may be warranted in the UK, 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’s performance figures, buying Euro will likely continue to benefit from from the current narrative fueling 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 rife for anyone with a GBP/EUR requirement in the latter part of December, or indeed waiting through this period.

Speculator activity has a high probability to impact the Pound’s value, with traders having to move their funds into stable currencies when the banking sector winds down for the holiday period. The Pound for very obvious reasons is very low on this list of desirable currencies with a high likelihood to hold its value and should lose significant value through decreased demand.

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 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 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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