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Foreign Currency Exchange (Forex)

Pound Euro Exchange Rate Rocked Amid Closure Of Nord Stream 1 Pipeline

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The Pound Euro exchange rate remained highly volatile over the past week, the pairing being rocked by Russia’s decision to close the Nord Stream 1 pipeline indefinitely. 

Euro undermined by energy concerns and bleak ECB forecasts 

The Pound Euro exchange rate initially strengthened this week, as EUR investors were spooked by the news that Gazprom would be halting all gas flows through the key Nord Stream 1 pipeline. 

Analysts fear the move by Russia could lead to European gas shortages in the winter, likely expediting a likely Eurozone recession. 

The euro then mounted a convincing recovery in mid-week trade, with the GBP/EUR exchange rate plunging to its worst levels since May 2021 amid growing confidence the European Central Bank (ECB) would raise rate by 75 basis points at its September policy meeting. 

While the ECB ultimately delivered a record 75bps hike, it was almost immediately undermined by the bank’s accompanying macroeconomic projections, in which the ECB slashed its 2023 growth Eurozone forecast from 2.1% to just 0.9%. 

The Pound, meanwhile got off to a strong start this week as GBP investors welcomed reports that incoming Prime Minister Liz Truss would be freezing energy prices, bolstering hopes for a shallower UK recession. 

Sterling then gave ground again on Wednesday as Bank of England policymakers struck a broadly dovish tone as they appeared before Parliament’s Treasury Select Committee. 

‘Dovish’ BoE rate hike to weigh on Sterling? 

Turning to next week, the spotlight will likely be on the BoE as it delivers its own interest rate decision. 

The BoE is widely expected to raise rates by 50bps points at its September meeting. Potentially leaving the Pound on the backfoot as the BoE is likely to be perceived as being behind the curve when compared with the ECB and Federal Reserve. 

There will also be a raft of high-profile UK data releases which could infuse volatility into Sterling next week, perhaps the most impactful of which will be the UK consumer price index. Could another sharp acceleration in inflation pile some pressure on GBP exchange rates earlier in the week? 

In terms of Eurozone data, the focus for EUR investors is likely to be Germany’s ZEW economic sentiment index, in which another deterioration in morale in the bloc’s largest economy could dent the Euro. 

If you’ve got a GBP/EUR currency transfer to arrange, the team at TorFX are on hand to help. Get started now to access bank-beating exchange rates and fast, free transfers.  

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).

SPI disclaims any responsibility or liability related to your access to or use of any third party content.

Foreign Currency Exchange (Forex)

Pound Euro Exchange Rate Fluctuates Amid Mixed UK Data

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The Pound Euro exchange rate fluctuated over the past week, as some mixed UK economic releases kept investors on their toes. 

Pound finds fleeting gains following broadly upbeat inflation figures 

The Pound Euro exchange rate initially stumbled this week as the single currency received a shot in the arm after Ukraine’s successful counteroffensive against Russian forces in the east bolstered hopes for an earlier-than-expected end to the war. 

However Sterling was quick to find its feet again with the publication of the UK’s latest jobs report, after July’s figures reported domestic unemployment fell to a new 48-year low and wage growth accelerated at a faster-than-expected pace. 

This upside was then reinforced by the publication of the UK’s consumer price index, after an uptick in core inflation bolstered expectations the Bank of England (BoE) could deliver a 75bps rate hike this month.  

Meanwhile the euro struggled to hold its ground, with another slump in German economic sentiment and a spike in the US Dollar taking their toll on the single currency. 

The second half of the week then saw the GBP/EUR exchange rate come plummeting back to earth. 

The Euro rallied on the back of some hawkish comments from European Central Bank (ECB) Vice President Luis de Guindos, in which he urged the bank to prioritise tackling inflation over sustaining growth. 

Meanwhile, the Pound fell victim to renewed Brexit uncertainty and a lacklustre UK retail sales print. 

BoE interest rate decision in the spotlight 

Centre stage next week will undoubtedly be the BoE’s latest interest rate decision. 

If the BoE raises interest rates by 75bps as some analysts suspect we are likely to see the Pound strengthen. 

On the other hand if the BoE opts to remain cautious and delivers a 50bps hike the Sterling could tumble amid concerns the bank is falling behind the curve. 

Also influencing GBP exchange rates will be the UK’s latest PMIs, with the Pound likely to weaken if private sector growth continued to contract in September. 

The Eurozone will also publish its September PMI next week. These could weigh heavily on the Euro if this month’s preliminary figures report the contraction in the bloc’s manufacturing and services sectors deepened. 

If you’ve got a GBP/EUR currency transfer to arrange, the team at TorFX are on hand to help. Get started now to access bank-beating exchange rates and fast, free transfers.  

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).

SPI disclaims any responsibility or liability related to your access to or use of any third party content.

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Strong US Dollar Vs. Weak Euro Creates Unique Investing Opportunities For Americans To Snap Up Spanish Property

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Author: Spanish lawyer Raymundo Larrain Nesbit Raymundo Larraín Nesbitt

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Geopolitical tensions, Europe’s energy crisis, and surging inflation are roiling the foreign exchange markets, creating extraordinary buying opportunities in Spain for house-hunters holding US dollars, argues Marbella-based lawyer Raymundo Larraín Nesbitt.

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By Raymundo Larraín Nesbitt

Director of Larraín Nesbitt Abogados

The ECB’s erratic and lacklustre monetary policy, always lagging behind the resolute path set by the US, translates into a weak euro. The Fed has no qualms to firmly hike the price of money to stave off inflation – unlike in Europe. As a result, the US dollar has hit an all-time high against the euro, even reaching parity multiple times.

In plain English, Spanish (European) property has now become dirty cheap for US investors. Savvy investors have picked up on this, and the smart money is flowing in to invest in large cities and sought-after areas, buying second homes.

Not least, is the fact that Spain is living a sweet property boom over the last two years, with resales appreciating 8.5% and offplan by 10% YOY. This is the cherry on top that sweetens the deal.

Did I mention that US nationals can benefit from a coveted Golden Visa on investing in Spanish property, allowing them unfettered access to a country in the Schengen Area, bypassing the pesky 90-180-day rule?

Bottom line, for our US cousins buying Spanish (European) property now is a win-win

At Larrain Nesbitt Abogados we have over 19 years’ experience buying, selling, and renting properties. We are also specialized in taxation, immigration & residency visas. You can contact us by email at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.

Larraín Nesbitt Abogados, small on fees, BIG on service.

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. No social-communist politician was harmed on writing this blog post. VOV.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved. Plagiarism will be criminally prosecuted.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).

SPI disclaims any responsibility or liability related to your access to or use of any third party content.

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