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Sterling rises again but for how long?

Exchange rates are like elastic bands, you stretch and stretch until suddenly, “BANG!” and your rate is gone!

I would be so pleased if I was buying a foreign currency with sterling in 2015. GBPEUR has risen almost 15 cents since the start of the year, against the Aussie and Kiwi sterling is at multi years. GBPCAD has been over 1.90 and GBPZAR is comfortably above 18! Is this going to carry on with the most uncertain election in years just around the corner?

Much of sterling’s strength is due to other currencies being weaker. Notably the Euro which has weakened to multi year lows against all currencies. The outcome of all of this could not be so rosy with the election coming up. In short if you are transferring currency in the coming weeks or months please don’t take the current rates of exchange for granted, it could end up very costly. I was working when the last election took place, sterling lost 5 cents in the weeks leading up to the election. The same was true of the Scottish Referendum. Now sterling did recover afterwards but is that really a risk to take? The distinction between those two events and next week’s election is the range of uncertain outcomes.

Even if you don’t need to buy currency just yet making some plans in advance is always sensible when it comes to finance. As a wise man once said ‘A good financial plan is a road map that shows us exactly how the choices we make today will affect our future’. 

For more information on the currency markets and other inspiring quotes please contact me Jonathan on jmw@currencies.co.uk

Exchange Rate Forecast – Incredible Trading Levels! ( Andrew Bromley )

The Pound is trading at incredibly high levels against both the Euro and US Dollar. The levels are a surprise as realistically the UK General Election in just under two weeks should be weakening Sterling. In all previous elections, including referendums, the Pound has lost on average 3% against other major currencies. I’m surprised therefore that in what will be an incredibly open ballot and with a strong chance of a hung-parliament, that optimistic levels are being tested.

Against the Euro we’ve recently seen 1.40 and above, only seen once prior in 8 years! This is a direct consequence of primarily the uncertainty in Greece, but also on the back of positive sentiment from the Bank of England’s Monetary Policy Committee. Two of the nine members of the ‘MPC’ indicated that they were starting to consider an interest rate hike, a glimmer of hope taken advantage of buy those buying currency with the Pound.

In the US the Dollar strength seems to have affected the progress towards a rate hike. The Federal Reserve had previously indicated that the Interest Rate hike will be based on strong economic data. Unfortunately incredibly low US Non Farm Payroll data (the lowest increase in jobs since 2013), poor retail sales figures and disappointing Durable Goods orders indicate that the US will not be ready for the option of a hike in June. Therefore the next window for the hike would be September. The FOMC releases a statement prior to their meeting on Thursday so may be worth having your position sorted prior…

If you do have an exchange requirement please feel free to get in touch. Markets and trading ledgers are incredibly busy as people look to eliminate the risk of markets plunging pre-election. Please feel free to get in touch should you have an exchange requirement – AJB@currencies.co.uk – 01494 787 478 Please quote this blog!

Andrew Bromley

Sterling Euro Rates and impact of Greece (Tom Holian)

Sterling Euro exchange rates have been trading either side of 1.40 during the course of last week as uncertainty increases as to whether or not Greece will be able to keep up its current debt repayments.

Next month Greece has got to pay back up to EUR1bn to its creditors and earlier this week, the government asked its public sector bodies to hand over any reserve cash to help make the payment. This is clearly a worrying sign for the country and this is what led to Euro weakness over the last few days.

The Eurogroup meeting which took place on Friday came out with no conclusion as to how Greek debt could be restructured so for the time being I think we could see further Euro weakness.

With the UK election now less than 2 weeks away the likelihood is that we’ll see another hung parliament as it appears that no party is yet close to forming a majority.

When this happened last time Sterling fell very quickly against the Euro so based on past experience we could see a huge amount of volatility during the next fortnight.

Therefore, if you need to buy Euros it may be worth looking at buying a forward contract which allows you to fix your exchange rate for a date in the future.

Tuesday is likely to be the biggest mover of the week with the release of UK GDP figures due out at 930am. This could cause big swings for Sterling vs Euro.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

 

GBP/ EUR 1 month Forecast

Sterling made gains against the Euro during yesterdays trading session after members of the Bank of England (BoE) indicated they are now sitting on the fence whether to vote yes or no for an interest rate hike. With interest rates being the single most important driver of a currency, if the BoE raised the interest rate this would give strength for sterling (more €s for the £). However an interest rate hike is not on the cards until 2016 therefore I believe Euro buyers should take advantage of the recent comments and therefore the current levels we are seeing.

What will affect GBP/EUR over the next month?

The two main drivers that will effect GBP/ EUR exchange rates within the next month are the UK General Election (Weakening Sterling) and a possible ‘Grexit’ (Weakening the Euro). Over the last month the ‘Grexit’ has been outweighing the UK Election, however as of Monday I believe the tides will turn. In the lead up to the last election, GBP/ EUR dropped by over 3 cents and I don’t think this election will be any different. Therefore my prediction is GBP/EUR will be around the 1.36 mark come the 7th of May.

Depending on the outcome of the election  will depend on what happens to GBP/ EUR exchange rate. Please click here for a full report on the possible election outcomes. If you are looking to buy or sell Euros within the upcoming months feel free to get in touch by emailing me on drl@currencies.co.uk or alternatively call 01494 787 478 and quote Dayle Littlejohn.

 

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

GBP/EUR rates dropped during yesterday’s tradng, following poor UK Retail Sales figures. The expected figure of 5.4% was not hit, causing Sterling to lose value against most of the major currencies, in particular the EUR. This drop came after Sterling breached the 1.40 barrier earlier this week, once again providing EUR buyers with some of the best levels of the past 7 years.

Sterling’s positive move over the past couple of weeks was not expected when you consider the the uncertainty that was likely to be created by the UK general election. However the on-going economic difficulties inside the Eurozone, particularly in Greece, have not allowed the EUR to gain any sustained market value and this is why we are seeing the Pound trade at such attractive levels.

Personally I feel there is scope for the EUR to improve, especially when you consider its recent history and any UK media attention on Europe in the build-up to the election is likely to cause market uncertainty, which will not be positive for the Pound.

Looking ahead and with the latest Eurogroup meeting continuing today, expect issues in Greece to dominate discussions. Whilst scaremongering is rife at times like these, there is a very real threat that unless Greek finance minister Varoufakis presents a tangible list of reforms soon, then Greece will receive no further bailout funds from the IMF and it is likely they will default on their debts. If this does happen then their future participation inside the EU is likely to come under serious pressure.

GBP/USD rates crept back above 1.50 during Thursday’s trading despite the poor UK data mentioned previously. This move is certainly a positive one for the Pound, which for a time felt like it would be marooned under this glass ceiling for an extended period. The catalyst for yesterday’s spike could have been the weak US employment & Manufacturing data which came out under expectation and helped drive the Pound’s value back up. In truth it was fairly flat market for the pair yesterday but I expect this to change as we head towards the general election.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk 

Sterling falls after UK Retail Sales (Tom Holian)

GBPEUR exchange rates fell from the highs of 1.40 at the start of the day’s trading session to touching the lower end of 1.39 as UK Retail Sales came out lower than expected.

Excluding fuel sales retail sales were up but fuel purchases saw a 6.2% fall.

To me this could just be a short term blip as in the run up to the election I would not be surprised to see positive economic data to spur on voters at the election due two weeks today.

However, with the ongoing uncertainty surrounding who will lead the country I think we could see falls for the Pound as this happened five years ago when we witnessed a hung parliament.

The Eurogroup meeting due to held tomorrow will focus on Greece and as they are currently struggling with their debt arrangements any announcements surrounding this topic could have a big impact on Sterling Euro exchange rates.

In order to avoid the uncertain period ahead it may be worth considering a forward contract as this allows you to fix your exchange rates based on current levels.

If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

 

Pound Spikes – Time to BUY with the Pound? ( Andrew Bromley )

The Pound had an incredibly strong trading day yesterday, following a positive outlook towards the UK Economy by the Bank of England. The Monetary Policy Committee (MPC) indicated that they weren’t too concerned about the low levels of inflation and subsequent rise in UK goods prices. Two ‘MPC’ members also indicated that their decision was harder this month to vote against an Interest Hike, with those comments providing the boost up to the 1.40s! I personally feel that this level is a bit ‘false’ given how close we are to the election. It is now only two weeks until the UK votes on potentially the government for the next 5 years!

If you are buying a currency with Sterling I’d strongly consider buying now. It is also worthwhile noting that if you don’t have the full funds available for your purchase (for example a property purchase abroad) then there are still options available to you. Feel free to get in contact using the details below – I’d be more than happy to run you through the mechanics of ‘forward buying’.

Those with a Dollar exchange will have been surprised with rates pushing back in to the 1.50s. I personally feel that this level is worth taking advantage of if buying the Dollar, with 1.45 / 1.46 being the target for USD sellers. The ‘Greenback’ is reacting heavily to interest rate speculation, with moves of 3 cents on average in either direction. I would be surprised if rates were hiked in July however one cannot rule it out – my personal opinion will be for a September hike.

The final currency trading heavily is the South African Rand. Levels are at their peak of 18.40 and wouldn’t surprise me if we hit 18.50. Many buyers are taking advantage so ZAR buyers should seriously consider their position!

As mentioned above, should you have an exchange requirement (now or in the future), please feel free to get in touch. Either email me AJB@currencies.co.uk or contact me directly 01494 787 478 (please quote this blog).

I look forward to hearing from you!

Andrew Bromley

1.40 Breached once more! (Joshua Privett)

Today saw incredible gains for Sterling across the board against all major currencies.  Sterling is now back and comfortably inside 1.40 against the Euro, as well as above 1.50 against the USD. The presence of rates like this to purchase, particularly with our election now only a few weeks away is staggering. The uncertainty of such a closely fought election will become telling on rates in the near future. The fact that the SNP is becoming a major player in this, with the Scottish Referendum just a short time ago causing Sterling to crash, is making Sterling weakness during the election more and more certain.

Historically, this is the period when the rates start to tumble slightly. Two weeks or so before citizens head to the polls. Today the rates moved up across the board due to positive minutes from the recent Bank of England meeting.  Their apparent surprise at the sudden representation of poor data in the American economy is why the Pound’s gains against the USD were larger other major currencies.

What some financial forecasters are beginning to ponder however, is that these rises indicate an even larger drop to follow. Frankly, these rates don’t make sense in a logical market. The certainty of no clear front runner, a necessary coalition, and the inability to forecast British financial policy beyond May, makes all this flight into Sterling from other currencies an indication of more unconventional investment policies.

The currency markets are mainly moved by banks, who speculate billions daily on shifts in currency value. Buying at the low and selling at the high to make their profit. Once thing they can do is ‘go short’. This is a term where a currency is borrowed, like Sterling, with the promise that it would have to be repayed back later. However, if Sterling loses value later, then this debt would be very cheap to pay back. The election looming makes this a very safe bet. So when these investors do decide to sell off their Sterling for profit, the snap-back in the markets will likely be extreme to say the least.

As I said these current rates are an incredible opportunity. Personally, if I had a requirement to use Sterling as a purchasing currency for Euros, Dollars, etc, then I would not hesitate a moment longer. Waiting any longer will be a gamble that could only have a small pay off, or a large loss. The rates can be pegged at these historic levels for up to 12 months, call through to the trading floor on 01494 787 478 and ask for Joshua, or email me overnight on jjp@currencies.co.uk to discuss your situation in more detail.

GBPEUR rates unstable around Greece

GBPEUR levels are holding up well and the reason for this surprise so close to the election is the Greek story. The latest is that they have initially, up to Friday to get a budget reform plan accepted by the ECB and IMF before the next lump of funds are released to them. They also have a large amount of repayments to be made next month which is another concern. The only play they have is to make this as muddy as possible which has weakened the euro.

The deadline for the next ‘update’ probably not a solution is on Friday of this week and when this happens I expect the Euro to strengthen making buying the single currency more expensive. This however could easily be the catalysts that starts the rates on a a negative trend in the run up to the election in the UK which is just 15 days away.

What I am saying is that many experts are thinking that we will now have a negative trend start for GBPEUR levels. So if you have euros to buy in the near future you have to have a very strong argument to wait. For a full break down of forecasts, live prices and tools contact myself or the team via hse@currencies.co.uk

 

 

 

GBP/ EUR Forecast. UK Election Vs Greece! (Dayle Littlejohn)

For many financial experts GBP/ EUR current exchange rates are a surprise. In recent elections around the globe the currency in question normally weakens months before. This is because of the uncertainty created. Therefore GBP/ EUR exchange rate in my opinion should be around the 1.35/1.36 mark. However in recent weeks GBP/ EUR has floated around the 1.38/ 1.39 level as Greece is counteracting any political uncertainty as they are still indicating a ‘Grexit’ could occur.

Ministers within the Eurozone including Angela Merkel from Germany, understand the importance of keeping Greece within the Euro. The reason being if Greece did decide to leave we could see a ‘domino effect’ where countries like Portugal, Spain and Ireland following suit and then in my opinion the start of the end for the Euro. Therefore this is the reason I believe Greece will stay.

Prediction

Going forward I still believe Sterling will weaken before the Election and by May the 7th GBP/ EUR exchange rate will be between the 1.3550 and 1.3650. Depending on which parties form a coalition (as its fair to say no party will gain the majority) GBP/ EUR could strengthen or weaken. For further information into the possible outcomes to who could form the government and the effects this could have on the currency markets please click here.

Going forward if I was looking to buy Euros I would be buying as soon as possible taking no risks. Where as if i was selling Euros I would be following the Greece story closely, however I would look to trade just before the election. For further information and a quote to receive award winning exchange rates feel free to email me on drl@currencies.co.uk or alternatively call 01494 787 478 and quote Dayle Littlejohn.

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