Monday, 16 November 2015

Monday, 16 November 2015

Why you need a personal broker at a time like this

Regular readers of our currency market report will be aware that the currency markets are experiencing exceptionally volatile times. With discussion of interest rates, and a possible extension of the European Central Bank’s (ECB) quantitative easing program grabbing the headlines, focus on economic data, and having a personal broker to translate the jargon has rarely been so imperative.

In the space of just 7 days last week we saw GBP/EUR levels sink to below 1.40, and peak as high as 1.4196.

What caused this movement?

The positive trend for Euro buyers was attributed predominantly to a perceived weakness in the single currency, as a result of a two pronged attack. The week was under way with a speech from ECB president Mari Draghi, in which he began to indicate that the central bank might indeed be willing to cut the base rate even further than the current record low of 0.05%. This insight into the thoughts of the central bank was the cause for an initial rise in rates, and began a trend that was to continue for the remainder of the week.

Alone, you would expect news such as this to create a noticeable movement in the markets, but coupled with the inclusion of a possible extension of the ECB’s quantitative easing program, a doubling up of monetary policy changes resulted in an escalation in the severity of the fluctuations. This was demonstrated during Fridays trading when we saw session swings of over a cent, moving higher, then lower, then higher again, before dropping once more to end the week around 1.4150.


Horror in Paris

Following the atrocities the world witnessed in Paris on Friday evening, it would be expected to see a degree of reaction in the financial markets. The general consensus is, that due to the incident occurring outside of trading hours, any knee jerk reaction has been subdued as the traders and investors have had time to digest the horror. Michael Hewson at CMC Markets expects that “Against such a fragile backdrop, markets generally take the last line of least resistance and given this vulnerability, European trading looks set to follow in Asia’s footsteps and open sharply lower”. However, how long this effect may be due to last is unknown as with “Past experience with terrorist strikes in Europe……financial market impact of even the most severe attacks to be short lived,” said Olivier Adler at Credit Suisse.

Get in touch

With the currency markets being one of the most unpredictable entities known, it is always worth having as many sets of eyes and ears on your side as possible. With our partner / dealers at Foremost Currency Group you will be assigned a dedicated account manager, who will be happy to share their knowledge of the markets with you, and explain all the options and tools at your disposal to help maximise the return on your individual requirement. Ask for Tom Taylor or Adam Bobroff, and quote the Allez-Français Blog to get preferential rates and the very best in service.

Call +44 (0) 1442 892060 or email

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