GBP – Break to the upside… finally
It’s been a long time coming but GBP/EUR finally broke out of its narrow trading range.
For the last 6 months GBP/EUR has been trapped between 1.11 to 1.14, but yesterday Sterling managed to bust through the ceiling.
It’s a result of a combination of things. Firstly, there’s been progress on Brexit with the EU and UK agreeing a transition deal on Monday. Secondly, the Bank of England (BoE) meeting yesterday saw two members vote to increase rates immediately.
However, after an initial burst Sterling gave up some of its gains as the BoE reiterated that rate hikes would be “gradual”.
For those that have been frustrated by the level of GBP/EUR, make sure you are registered and ready to take advantage of the improved exchange rate. We are watching rates continuously throughout the day and can target levels for you.
EUR – Behind the curve
There’s no doubt the Eurozone is doing well economically. The numbers have been buoyant for some time. This was reinforced yesterday by the the latest Economic Bulletin from the European Central Bank (ECB), which was upbeat.
But after many years of poor economic growth and high unemployment, the European Central Bank (ECB) is showing no signs of increasing rates.
As we know, currencies are a relative measure. So when the UK, US and China have all begun to increase interest rates, it weakens investor appetite for the Euro.
As the saying goes: in a world that’s moving forward, standing still is moving backwards.
USD – Trading blows
Yesterday the Federal Reserve (Fed) raise rates as expected for the first time this year. More importantly, the Fed forecast a steeper path of hikes in 2019 and 2020 due to an improving economic outlook.
President Trump also announced tariffs on $50 billion of Chinese imports. The Chinese are not impressed and are now expected to retaliate with a little 'plan' of their own.
The greater risk is whether this kick offs a trade war begins between the world’s two largest economies. Wide-ranging tariffs will lead to higher US inflation and lower Chinese growth, so neither country or currency would benefit.
Overall, the Dollar was weakened as investors reacted more to the tariff news than the Fed meeting.
It’s been an eventful week with some major moves in exchange rates.
We can look to take advantage of these upside moves or structure a plan to help mitigate your risk.
Current rates:
Friday 23rd March 2018 at 10:40
£1.00 GBP = 1.1431 EURO
£1.00 GBP = 1.4093 USD
£1.00 GBP = 1.8276 AUD
£1.00 GBP = 1.9469 NZD
£1.00 GBP = 1.8220 CAD
£1.00 GBP = 16.6491 ZAR
Need to Send Money Abroad?
At Clé France, many of our customers have a need for currency exchange.
We are pleased to have partnered with Key Currency to offer our customers favourable exchange rates on international currency transfers.
Key Currency is an award-winning currency exchange specialist, Key Currency Limited is authorised and regulated by the Financial Conduct Authority as an Authorised Payment Institution (Financial Services Register No. 753989) and experienced in executing high-volume transactions.
As a Clé France website visitor, you qualify for preferential exchange rates when you transact through Key Currency.
Save money on your foreign currency transfers
Key Currency can save you money by offering more competitive rates of exchange than retail banks.
Clients can typically save you 3-4% of the total transaction value, which can result in significant cost savings.
All client funds are held in segregated accounts with top-tier banks keeping your money safe and secure.
Download our "Buying A Property in France" Guide PDF document now.
For everything you need to know about French property visit www.clefrance.co.uk
