Sunday, 10 October 2010

Sunday, 10 October 2010

Currency volatility back in the news

Once again the GBP/Euro pairing was volatile this week with highs reaching 1.1807, lows of 1.1509 and an average exchange rate of 1.1686. This equates to a difference of 2.59% between high and low leading to a difference of 6,475€ on an exchange worth 250,000€. Last week saw the publication of UK GDP data which temporarily caused a positive shift in the value of Sterling. This was short lived and the value of the Pound against the Euro dropped off towards the end of the week. Sterling has been relatively strong against the other major currencies this week leading analysts to speculate that it is primarily Euro strength which is causing the movement. The value of the Euro has managed to rise even in the wake of the increased bailout of Anglo Irish Bank and the downgrading of Spain’s credit rating. Looking to the week ahead the Euro could strengthen further on the back of the announcement of Germany’s Purchasing Manager Index (Manufacturing) which is expected to be bullish. The PMIM measures the level of goods manufactured in the Eurozone’s strongest economy and therefore indicates consumer purchases and German trade levels. On Thursday the BoE announces its interest rate decision. A hawkish outlook from the Bank and a rate rise would be positive for the value of Sterling. However it is important to note that the BoE have not indicated a rate rise and dovish comments could see GBP lose more ground to the Euro. Both of these announcements could mean it is the ideal time for Euro buyers to capitalise. The points raised emphasise the volatility of the market and the necessity to remain in close contact with specialist currency exchange dealer, perhaps about the benefits of forward contracts as a way of safeguarding a rate of exchange. Small changes in exchange rates can lead to large differences in transactions so utilising the expert knowledge and professionalism of a dedicated trader can help you save thousands of pounds. Peter Elias www.allez-francais.com sales@allez-francais.com Filed Under:

0 comments:

Post a Comment