By Grace Smyth
This past week has offered up a nice hand for those of us with Sterling looking to buy Euros. Although some might argue exchange rates could be better, it’s worth remembering we haven’t been able to exchange at better levels since April 2022, and with hard times on the economy still weighing heavy, it’s a nice bit of relief for GBP. To put this into perspective, a €200,000 euro purchase is close to £3,000 cheaper than it was at the beginning of last month, so clearly a decent improvement.
As we are now in full Christmas holiday mode, naturally things begin to slow down as the world prepares for a festive break. However, it’s important to remember exchange rates are still making moves, and if you have an upcoming currency requirement you may want to consider the options we offer to help you secure your currency and avoid disappointment (just in case the festive holidays distract you a little too much!).
- Our Forward Contract allows you to lock in around current levels for the full currency amount you need, whilst only having to part with 10% of the payment. This could come in handy to help free up some funds towards some extra Christmas shopping!
- Our Limit Orders allow you to hedge your bets and facilitates you in buying your currency at a rate above current market levels. If the markets move to a level where your desired rate can be achieved, your order will be automatically ‘filled’, while our Stop Loss Orders offer the opposite. If markets begin to move down you can set a stop level to buy your currency requirements to avoid going over on budget. So you can enjoy the Christmas festivities without having to worry about missing your target exchange rate or having to spend more than you had planned for.
The week ahead
This morning the Sentix Investor Confidence Index is released at 09:30. The index is a monthly survey which is composed of 36 different economic indicators, and shows the markets opinion on the current economic situation in the Eurozone. A high reading here is seen as a positive so worth keeping an eye on if you have a Euro transfer to consider. Later in the afternoon Bank of England’s Deputy Governor Dave Ramsden gives lecture on the UK’s financial stability and the BoE’s tool kit. Although unlikely to be a big market moving event, he could offer some interesting insight on the Bank’s ongoing outlook.
In the early hours on Tuesday, the Reserve bank of Australia announces its interest rate decision which is set to remain unchanged at 4.35% but any change here could cause a stir.
Wednesday pulls focus to the US, posting Consumer Price index data at 13:30. This is an important release as the figure measures changes in inflation. However, much like the UK, improvement in this area is slow and markets are expecting the month on month figure to remain unchanged at 0.2% and up 0.1% year on year. AT 14:45 the Bank of Canada announces its Interest Rate decision with all signs pointing towards another cut from 3.75% to 3.25%. The cut has potential to weaken the Loonie but its likely that the upcoming decision has already been priced into the current exchange rates.
Thursday afternoon the European Central Bank posts its Deposit Facility and Main Refinancing Operation Rates. Followed by its Monetary Policy Statement at 13:15 and press conference thereafter at 13:45. A 0.25 basis point cut on Deposits is anticipated lowering the rate to 3%. The US also post Initial Jobless Claims and Producer Price index at 13:30.
Ending the week on a quieter day with less dramatic data releases out. The UK posts October’s GDP, Industrial and Manufacturing Production early doors at 07:00, Consumer Inflation expectations at 09:30 and Eurozone Industrial production at 10:00am. If you have an upcoming transfer, get in touch with our friendly team here to discuss how we can help you ahead of the Christmas break.