There were further loses for GBP during Friday’s trading, following a poor day on the markets yesterday. Sterling has come under pressure following the release of yesterday’s Bank of England (BoE) and European Central Bank (ECB) interest rates. As expected the BoE kept their base interest rate unchanged at a record low of 0.5% but it was more of a surprise that the ECB decided not to act. Despite the fact that the ECB have already set rates at a record low of 0.25%, inflation data in February indicated they may need to cut rates even further to counter any potential deflation concerns. This did not occur and may well have set the mood for the rest of Thursday’s trading, as GBP struggled to hold its position thereafter.
Anyone with a GBP/EUR requirement will now be keeping a close eye on Tuesday’s Industrial and Manufacturing data, to see if GBP can recover these loses, or if the EUR can start to put pressure back on the 1.20 resistance level
GBP/USD exchange rates continue to hold firm, floating between 1.67-1.68 on the exchange. Cable rates have been fairly flat for the past week, with the USD still struggling to make any major inroads against GBP. Those buying Dollars continue to find of some the best rates on offer of the past four years and despite the on-going concerns over the US economy and its growth forecasts for the remainder of 2014, I would have expected a move back towards 1.60 by now.
This move has not yet materialised and whilst we are still trading around current levels I would be very tempted to consider my position. I do still feel it is only a matter of time until the USD makes a decisive move against GBP and when it does it is likely to be quick and aggressive.
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 exchange rates with your current provider, then please feel free to contact me directly at firstname.lastname@example.org.
Sterling got a bit of a shot in the arm following service sector PMI this morning, as although the figure was slightly lower than last month, it will still very good. The news suggests that the largest part of the UK economy is still on the right track so I am not unduly worried about any big losses for the pound in the near future, and whilst we do have the Bank of England decision tomorrow I feel this will be somewhat of a non-event. With no data of note in the next couple of days for the UK it will largely depend on the data releases for other currencies so what should we be looking out for?
Overnight we have retail figures for Australia. In the last couple of days we have had very clear guidance from the governor of the RBA that further changes in interest rates are unlikely and my view has been that current levels on GBP AUD are excellent buying opportunities because I don’t see the pound surging up (as the BofE aren’t going to increase any time soon), or the Aussie Dollar tumbling again (as the RBA are now on hold). Aussie GDP for Q4 has been revised up, so if retail figures are good I think the AUD will gradually settle against the pound this week. We do have Chinese data out over the weekend, and jobs are still a big area of concern in Australia, but I think anyone holding off for another big surge in the Aussie may be disappointed.
Today we have seen good service data and retail figures for Europe and following Friday’s better than expected inflation data it is still unclear what Mario Draghi may say at the ECB press conference tomorrow afternoon. Recently he has expressed concern that the longer inflation remains at a low level, the harder it will be to turn around, so there is still an element of risk that the ECB may feel the need to act. I think it is unlikely tomorrow but I am expecting a volatile day during the course of the press conference as journalists probe for any hint of a future policy change. We have seen some Euro weakness this afternoon but anyone buying or selling Euros in the near future should be on red alert tomorrow just in case.
The US Dollar still remains very weak as the Fed remain cautious about the pace of tapering QE and Non Manufacturing and employment figures this afternoon were on the weaker side of forecasts, although recent bad weather has a lot to answer for. However Friday is the next key date with the release of the non-farm payroll figures. The creation of new jobs is one of the big measures that the Fed are using to determine an appropriate monetary policy, and so far the rate of improvement has been modest. With the issue over energy costs caused by the crisis in the Ukraine, and the ever present debt debate in the US, there are a lot of potential banana skins for the Dollar, but I feel it is only a matter of time before the economy stateside picks up enough to increase the rate of tapering, and when we get closer to the pricing in of a US interest rate hike (probably hike late next year in my view) then USD EUR rates should move back under 1.35, and sterling slip back to the early 1.60′s.
The Bank of Canada left rates on hold today and pretty much said growth in Canada had been a bit better than expected, although was broadly in line with forecasts, and inflation was likely to be below target for some time. They did acknowledge there was a downside risk to inflation which had led some to believe the BOC would cut rates, and this threat hasnt been completely lifted but I would say it is now unlikely as long as Canada and the US keep growing. Canadian jobs figures also come out on Friday, but if anyone was hoping for another sharp weakening of the GBP CAD rate then they may be out of luck in the near term- worth buying at current levels in my view.
The Kiwi has fought back a little against the pound in the last week and a combination of growth forecasts and increasing inflation concerns have allowed the NZD to strengthen as New Zealand is the main economy expected to raise interest rates at some point later this year. With dairy exporter Frontera making huge strides in China there seems little sign of the Kiwi economy waning, I think the only warnings for the Kiwi would be a sudden downturn in Chinese demand , or a huge increase in the pace of US tapering. To this end keep a close eye on this weekend’s Chinese CPI and the US jobs data on Friday. Snap up buys over NZD$2 in my view.
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Sterling exchange rates slipped yesterday on softer construction data. Although still experiencing expansion it slipped from 64.6 to 62.6 in January and house building grew at its slowest pace in four months. The real test will be the impact these figures might have on GDP data, and this could well give a slight correction to the pound. Looking at data today we have UK PMI data for February for the services sector. This is also expected to show a small decline month on month and does pose a small risk for the pound this morning, this is scheduled for release at 09:30.
Looking at the Euro – EU GDP data is released this morning at 10:00. Figures will be the final revision of Q4 2013 and expected to show an increase from 0.1% to 0.3%, something that could lend support to the Euro this morning. Retail sales are also due for release with an improvement from a negative 1.6% to a positive 0.8%
Across the pond cable rates (GBP/USD) have settled around the 1.67 level. Today we have the FED beige book which will give a report on the current US situation including business sentiment and overall economic growth. A positive report could lend support to the greenback in anticipation of Fridays important jobs data. Friday will see non-farm payroll figures at 13:30 and with a positive reading expected (although forecasted figures are often way off the mark) look for the dollar to have a strong end to the weak.
Finally looking towards the Australian Dollar. This morning’s GDP data came in better than expected and has seen the Aussie push back into the 1.85 territory. I still feel any strength for the Aussie should be seen as an opportunity for those selling AUD as I still believe the currency is set to have a tough time throughout the course of the year. Yes this morning’s figures were positive but the RBA governor stated that the dollar is still high by historical standards suggesting the central bank is still not comfortable with the position of the AUD. Anyone buying AUD I believe will find more value in the coming weeks.
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Australia leave interest rates on hold – Tension still apparent in Ukraine – A little construction data for the U.K to set the scene for the day for Sterling (Daniel Wright)
Last night Australia left their interest rates on hold at 2.5% which was expected and this has led to the Australian Dollar holding fairly steady in trading overnight and this morning.
Personally I feel any Australian Dollar movement in the coming days will be based on two factors – GDP (Gross Domestic Product) figures tonight and the ongoing situation between Russia and the Ukraine. Should things really start to get bad over there then global attitude to risk will no doubt be affected and this could lead to investors and speculators starting to drop the ‘riskier’ currencies like a stone which may lead to Australian Dollar weakness.
This morning we have the release of Construction data for the U.K which could be the first good indication as to how much the dire weather conditions have actually impacted on the economy.
The rest of the trading day is looking fairly quiet so depending on what we see from this release, this may set the scene for the rest of the day for the Pound assuming no major surprises crop up… which you can never rule out with all that is going on globally right now.
As mentioned in my post yesterday the week really starts to hot up tomorrow so if you are looking to carry out a currency transaction involving wither buying or selling the Pound then it may be prudent to contact me directly as I can help you both with timing your transfer and getting a better rate than your bank or current broker when you do decide to book out your currency.
To get in touch with me (Daniel Wright) directly then feel free to email me on email@example.com with a description of what you are looking to do and I will be more than happy to assist you personally.
GBP/EUR rates have spiked back up during Monday’s trading, following a poor end to last week for the Pound. The EUR had started to make inroads following strong inflation data on Friday and although we have seen some loses for the single currency today, Friday’s positive news seems to have dampened talk of a prospective interest rate cut by the European Central Bank (ECB) this week. With GBP/EUR rates now floating between 1.21-1.22 on the exchange, many investors will be looking closely at the upcoming economic data releases, to determine the next major move on the currency pair.
Personally I do feel the current levels still offer some fantastic buying opportunities and if we look closely at historical data, it seems as if GBP/EUR continues to find a lot of resistance around the current levels. When you also consider the fact the EUR is benefitting from improved growth forecasts, I do wonder whether we will see the Pound make any further significant gains in the short-term. We also need to consider the recent turn of events in the Ukraine as any on-going political unrest, is likely to have a negative knock on effect for the global markets.
GBP/USD rates continue to trade around 1.67 on the exchange, surprising investors and analysts alike. I do still feel it is only a matter of time until the USD makes a move back towards 1.60, so if you have any longer-term USD requirements it may be prudent to lock in your position whilst the current levels are still on offer.
Key economic releases for the week includes UK PMI Construction and Markit Services data tomorrow and Wednesday respectively, along with UK inflation data on Wednesday. However the key date for anyone with a Sterling requirement is Thursday’s Bank of England (BoE) interest rate decision and monetary policy statement, along with the ECB’s interest rate decision and Mario Draghi’s subsequent statement. These are considered key market movers and depending on how results are released compared with expectations, is likely to determine whether we see further gains for GBP over the coming days.
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 at firstname.lastname@example.org.
Good morning to all of our regular readers, we have a fairly busy week ahead for Sterling as we enter into March. on top of this, the current situation in the Ukraine is starting to impact on global attitude to risk which is starting to weaken currencies such as the Australian Dollar, New Zealand Dollar and South African Rand.
This morning saw mortgage approvals data out for the U.K and we had the best figures we have seen since November 2007 which has given the Pound a minor boost to start off the week. Sterling could well remain supported throughout the day as there is little else out for the U.K today however do be aware of head of the ECB (European Central Bank) Mario Draghi speaking at 14:00pm and some economic data for the States throughout the afternoons trading.
Overnight tonight we have the Australian interest rate decision and statement which could lead to a volatile evening for Australian Dollar exchange rates. The rest of Tuesday is again fairly quiet on the economic data front so unless any surprises crop up i would expect a fairly flat trading day however followers of the AUD should once again be wary that GDP (Gross Domestic Product) or growth figures are released overnight too.
Wednesday is when the week really starts to hot up, starting off with a flurry of data for Europe including growth figures and PMI at around 10:00am along with the inflation report hearings for the U.K at exactly the same time. Later on in the afternoon has the potential to be of interest for those looking buy or sell Canadian Dollars as we have the Canadian Interest rate decision at 15:00pm – Although no change in rates is expected all eyes will be on this release and the statement that comes with it. To round the afternoon off we have manufacturing data out for the States, also at 15:00pm and the Federal Reserve beige book out at 19:00pm which could lead to a little USD volatility.
Thursday we have interest rate decisions for both the U.K and Europe at 12:00 and 12:45pm respectively so watch out for any surprises cropping up during this period, more important for Sterling/Euro exchange rates on Thursday will be the speech and press conference by head of the European Central Bank at 13:30pm which can create some short, sharp buying and selling opportunities… if you are looking to buy or sell Euros this week and you would like to be made aware of an opportunity that arises then feel free to email me directly with a brief description of what you are looking to do on email@example.com and I will be happy to get in touch with you personally.
Friday focus turns to Switzerland, Canada and the States with a flurry of Swiss data out early in the morning, Canadian unemployment figures out early afternoon and the more often than not volatile data rel;ease of Non Farm Payrolls for the States at 13:30pm.
Non Farm payrolls and have an effect on all major currencies as not only can predictions be way out but it also affects global attitude to risk so watch out for this at the end of the week.
I personally work for a currency exchange brokerage which has won numerous awards for our rates of exchange and customer service, we are regulated by the FCA (formerly FSA) and we pride ourselves on getting better rates than not only the banks but our competition too. If you find my website of interest then feel free to email me directly with any requirements you have and i will not just price match but will make sure you get a saving if I can achieve it for you, I have helped thousands of clients save money over their current broker over the past few years and I look forward to helping you too – All you need to do is email me (Daniel Wright) on firstname.lastname@example.org and I will contact you personally.
Sterling has had a solid day to end the week against the Australian Dollar and US dollar but posted heavy losses against the Euro. The pounds losses against the Euro cam about following better than forecast inflation figures. Since reaching a one year high of 1.2270 in January, the pound has since struggled to keep consistent momentum against the single currency remaining range bound between 1.20-1.22 throughout the course of February. Again this pattern has continued with levels testing 1.22 this morning before falling below 1.21.
Recently deflation has been a major concern for Europe. This is decrease in the general price level of goods and services and is viewed as real concern in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. This has been putting pressure on the Euro, however with this morning figures showing inflation levels had not fallen at the pace many had expected has taken some of the pressure off Draghi and the ECB. If the figures had been weaker it may have left Draghi with little option but to cut interest rates, however this scenario is now less likely and hence the stronger showing for the Euro.
Looking at the USD, todays GDP release was as expected falling from 2% to 1.3% month on month. This along with Janet Yellen’s speech yesterday has pushed cable (GBP/USD) though 1.67 and just a cent below a four year high. Long term I believe the dollar will find support and would look for a push back towards 1.60. It will take a little time for Yellen to impose herself and a continuation of the FED’s approach on QE should lend support to the greenback long term. For anyone buying US dollars the current market is showing some value.
Should you have an upcoming bank to bank money exchange to arrange and you would like assistance with your transfer then please get in touch. When making your decision about the timing of your transfer it is best to get as much information as possible. To find out more about the currency service we provide and the various contracts we can offer then please get in touch on 01494 787478. Alternatively email me with a brief overview of your particular requirement and I will happily get in touch to run through your options and to discuss the current market trends. Email Mike at email@example.com