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Euro Exchange rate forecast vs Sterling prior to Eurozone GDP figures (Tom Holian)

Pound Sterling vs the Euro has started this morning in a positive fashion in the run up to both Eurozone GDP and Eurozone inflation data.

It is rather unusual to see so much important economic data coming out at the end of a month as typically this is a quiet period with most data released in the first and second week.

Expectations for Eurozone GDP are for a fall from 0.6% to 0.3% and I think we could see the Euro weaken against the Pound especially if we also see a fall in inflation levels at 10am.

Eurozone unemployment data is also due to be published and with so much data I would be amazed to see GBPEUR rates remain in a tight range. Therefore, later this morning I expect to see some very big movements for Sterling vs the Euro.

Tonight at 9pm we see arguably one of the biggest events for Europe in a long time when the European Banking Authority releases the results of the European Banking stress tests.

This will involve looking at a total of 51 banks with assets in excess of €30bn each. They will be put under test conditions and with the release of the information not due until 9pm this evening as it’s outside of trading hours I’m suspicious that this could cause a lot of volatility for Sterling vs the Euro.

If you need to either buy or sell Euros over the next few weeks and you’re worried about the mass of economic data due out and its impact on GBPEUR rates then you may wish to consider buying a forward contract which allows you to fix an exchange rate for a future date.

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

I look forward to hearing from you.

 

 

Pound loses value with profit warnings from UK companies (Joshua Privett)

The Pound took a sudden and severe hit which continued as the morning wore on, as UK companies were already showing concerning results since the announcement of the Brexit.

Profit warnings came out from the likes of Shell, Rolls-Royce, BAT and the UK stock market took quite a serious hit as a result. With the UK’s dependence on its financial services this correlated into lower confidence in the Pound, seeing a sharp sting for anyone considering buying a foreign currency.

Even with higher profits for Lloyds the lowered confidence in the UK was apparent with their announcement today that they would be cutting a 3000 more jobs and 200 more branches on top of their previous commitment to cut 9000 jobs and another 200 branch closures.

Whilst some companies performed well, the overall tone was negative, as the first look at concrete performance figures since the announcement of the Brexit shows the UK economy is struggling. A survey was released last Friday showing business confidence down to similar levels seen during the financial crisis. But concrete figures such as what was seen today are inscrutable and is why we saw a more sustained fall on the likes of buying Euro and Dollar rates than last week.

Euro buyers however, may see a turnaround in the short-term before the more voluminous data sets from last month are released during the first few weeks of August.

Late on Friday the Eurozone will be releasing the results of their stress tests on European Banks. Normally this is not a big market mover but some of our regular readers will note the particular attention paid to Italian Banks since the beginning of the month.

They have alluded to their rapidly deteriorating debt crisis, with now 1 in 6 loans deemed ‘junk’. These stress tests, like the concrete figures for the UK economy today, will likely put an exact figure in front of markets to understand the sheer scale of the current problem.

With the spotlight back on the Euro we may see rates reach more attractive levels late on Friday and by early Monday. There is a reason why the news is being released so late – to mitigate market reaction.

I strongly recommend that anyone with a Euro or Dollar currency requirement, whether in the short or long-term should contact me overnight on jjp@currencies.co.uk to discuss a strategy for you transfer in order to maximise your currency return.

In this current market there are many potential variables and ‘forks in the road’ to be wary of, and there are a number of options in using a currency exchange specialist to minimise the exposure of your transfer to these potentially violent currency movements.

I have never had an issue beating the rates of exchange offered elsewhere, and these current buying levels can be fixed in place for anyone buying a foreign currency in the future, and are worried where rates may journey to in the meantime. 01494 787 478

 

How much lower could the pound fall?

Sterling is much weaker following the Brexit, at present around 10% versus both the Euro and US dollar. At times it has been around 13% lower than the pre-Brexit highs. So just what is next and could the pound fall lower? We will very soon have an answer and any clients considering buying or selling the pound should not be feeling too complacent at the moment. Next week is the Bank of England Interest Rate decision where there is a very high chance the Bank of England will look to cut interest rates or even discuss a new Quantitative Easing program. The last time the BoE launched a QE program and had cut interest rates GBPEUR exchange rates dropped to almost parity at 1.02!

I am not suggesting that this is the kind of fall we will see next week but i am suggesting the potential for events next week to cause some big swings from the status quo. The outlook for the pound is one of great uncertainty and despite there being some good news around, we haven’t yet even begun to fully understand what the Brexit vote has done to the economy. It will take many months before we know exactly what is happening but the initial flash readings of business sentiment have so far not suggested it is good news all over.

Brexit is not in itself a bad thing and I am not taking a view on the Brexit here. What I am doing is highlighting the impact on the economy, financial markets and business need certainty to conduct their operations and at the moment it is something we are lacking. If you are considering a currency transfer involving buying or selling the pound we are not here to just provide information but can also help with the planning and execution of any transactions you will need to make. If you need to transfer more than £10,000 worth of currency (including bringing large volumes back to the UK or to buy pounds with) I am very sure we can get you a better deal than your bank or current provider.

We aim to proactively manage our client requirements so we don’t just help them save money on the exchange rate by beating the competition, we also offer strategy on the best times to consider entering the market. If you have a transfer to consider please call me Jonathan on 01494 787 478 or get in touch via email on jmw@currencies.co.uk and I am sure I can offer some useful information and a rate which will save you money.

Positive GDP figures do little to boost Sterling, is it all doom and gloom from here? (Joseph Wright)

Followers of Sterling exchange rates got a bit of a surprise this morning after UK GDP figures came out better than expected . According to the Office for National Statistics UK GDP rose 0.6% in the second quarter of this year, and with the ‘Brexit’ occurring right at the end of the 2nd quarter it may be the last reading of an economic improvement for some time in the UK.

Those hoping for an improvement in the value of Sterling may be feeling a little deflated at the moment, as this morning’s GDP figures will be the last recording of how the UK economy was performing prior to the ‘Brexit’. Many had hoped for an upward spike in Sterling’s value off the back of the figures coming out better than expected by analysts, but that hasn’t happened and my personal feeling is from this point onward it may be some time until Sterling is boosted off the back of good economic performance in the UK.

As recent as last Friday the UK released Service and Manufacturing data for the first time since the ‘Brexit’. Those economic news releases make it difficult to remain optimistic as the uncertainty surrounding the UK has begun to damage the economy, with economic activity falling to it’s lowest level since 2009 according to those figures released.

With today’s positive news doing little to nothing for Sterling’s value I’m expecting any further negative news releases to impact the Pounds value quite heavily.

Those concerned over the falling rate of Sterling’s value may wish to consider making their conversions sooner as opposed to later, as prior to the ‘Brexit’ many renowned analysts predicted parity for GBP/EUR exchange rates, and GBP/USD has already fallen to a 31 year low with potential for the pair to fall further.

The next key date for Sterling will be the 4th of August, many are expecting an interest rate cut by the Monetary Policy Committee on that date and should that occur, it’s likely the Pound will fall further so pencil that date into your diary.

If you are planning to use GBP to buy or sell a foreign currency it may well be worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call in directly and ask reception for Joe on 01494 787 478.

 

 

 

Will UK GDP Figures Boost Sterling’s Value? (Matthew Vassallo)

Sterling exchange rates continue to hang in the balance, ahead of this morning’s UK Gross Domestic Product (GDP) figures. With an improvement on the previous figure expected, we could see Sterling start to put pressure back on 1.20 against the EUR and 1.32 against the USD. However, there is also an argument to make that the improvement has now been factored into the current market and we are only likely to see an aggressive move if the official reading comes outside of the 0.5% growth expected.

It’s a strange time for those clients holding Sterling, with the initial fallout from the Brexit now digested by the markets. Whilst the Pound has gained some traction following some political stability in the UK and the Bank of England’s (BoE) decision not to cut interest rates this month but there is still a feeling that we see further slippage at any time. The Pound remains extremely fragile and I do not expect any sustained improvement, or increased investor confidence under current market conditions. It is far more likely that the Pound’s value will be boosted by other factors, most prominently any downturn in other economies, such as the Eurozone. If investor confidence wains over the coming months, which is highly likely due further economic problems on the horizon for Greece & Italy, the EUR will start to lose value. This in turn will benefit the Pound but I do not see any major advances against either the EUR or USD in the short-term.

It may be prudent for those clients holding GBP to protect themselves ahead of the BoE’s next interest rate decision on August 4th. With a rate cut highly likely in my opinion and a possible increase in monetary policy (QE), the recent gains seen for Sterling could be short-lived.

If you have an upcoming GBP 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 on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk   

Sterling exchange rates in for a testing August? Will we see Sterling weakness? (Daniel Wright)

Following on from a fairly turbulent few weeks Sterling has found itself reasonably stable against most major currencies over the last week or so but will that trend continue?

The key issue is what happens next with the Bank of England and whether or not we do see an interest rate cut at the next Bank of England interest rate decision a week on Thursday.

It does look more likely now that we will be seeing a cut which may lead to a further drop in the value of Sterling. An interest rate cut is generally seen as bad for a currency as it makes it less attractive to investors. We have indeed seen only this morning that a few banks have confirmed that they will potentially start to charge their business clients to hold money should the Bank of England end up entering into the realms of negative interest rates.

On top of this, as we enter August we will start to see the release of economic data for July (the first full month since we voted out) which will start to really show the initial signs of what the referendum vote meant for the economy.

A lot of businesses and the general public held back following the result of this vote so it would not be a great surprise to see economic data next month to be fairly poor and Sterling to feel the brunt of that so the next few weeks are a time to approach with caution.

There are plenty of other issues to be aware of around the world inclusive of the Italian Banks, the U.S election and the horrendous acts of terror that keep on happening, so be aware that at any time the markets can move rapidly and in any direction.

On Friday evening we also have banking stress tests released on Friday night at 9pm which is one to really look out for. The fact that this data is being released outside of trading hours suggests to me that we may well have quite a lot of problems that have been discovered and that they do not want the market to over react upon the release, therefore they are giving the market the weekend to calm down before trading. All European banks are being tested so be aware that this may lead to big market swings when the Asian markets open on Sunday night.

Should you have a currency exchange coming up in the near future and you want to make the most of your money then feel free to get in touch with me at any time today or this week to discuss the options available to you, including a forward contract where you can lock in a rate for anything up to a year in advance for just a small deposit.

Should you be in the process of buying a property, sending money overseas for your business or exchanging currency for any other reason then it is well worth getting in contact with me (Daniel Wright) the creator of this site directly. You can email me on djw@currencies.co.uk with a brief description of your requirements and a contact number and I will be more than happy to deal with you personally.

GBPEUR short term forecast (Dayle Littlejohn)

Since the UK public voted to leave the European Union, GBPEUR exchange rates have plummeted. Presently a €200,000 purchase is now costing an extra £14,000.

Pre Referendum UK GDP numbers are set to be released Wednesday morning. The numbers are set to show a slight improvement which should help sterling’s position, good news for euro buyers.

Eurozone GDP and Consumer Price index numbers are to be released Friday morning. The prediction for GDP is for a slight decline. However the Consumer Price Index numbers I believe will show a slight improvement due to the amount of quantitative easing the ECB is pumping into the European economy. Therefore I believe both data releases will counter act one another.

Looking to next week the UK release their latest interest rate decision. This has been a hot topic since the referendum vote and many leading economists believe a cut is just around the corner. If you have euros to buy in the next 3 months I would purchase before August 4th, if you are selling euros I would hold off and see how the Bank of England plan to act in regards to monetary policy.

The currency company I work for enables me to buy and sell pounds at rates better than other brokerages and high street banks. If you are buying or selling pounds this year feel free to send me the currency pair (if you are not trading GBPEUR) and the reason for your trade (company invoice, buying a property) and I will email you with my forecast for the currency pair drl@currencies.co.uk.

Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn

 

Will the Pound continue to fall? (Joseph Wright)

Those currently following Sterling exchange rates will have noticed the swings in exchange rates last week, as the Pound continues to find it’s new trading ranges since it fell so steeply in the immediate aftermath of the ‘Brexit’ vote, an decision made by the British public that has shocked the world.

Many of the major currency pairs are trading in a more volatile fashion than normal when compared with Sterling, which is presenting investors or others with a Sterling currency requirement with some difficult decisions to make. This is where we try to help our clients with timing their trades, and considering that on Friday the GBP/EUR pair hit a best monthly level of 1.2038, and then subsequently dropped by over a percentage point off the back of negative news, it just shows how important timing your trade is and how volatile trading conditions can be at the moment.

Fridays drop was for a simple reason, we received the first piece of financial data that offered us an insight into how the UK economy is performing and the news was negative. Economic activity has fallen to it’s lowest level since 2009, and some analysts are predicting that the UK economy could contract by almost half a percent in the third quarter of this year.

Moving forward I’m expecting the financial data to continue to disappoint on release, mostly due to the uncertainty created by the ‘Brexit’. This is likely to apply pressure on the Pound as the year goes on so it may be an idea to consider exchanging your Pounds sooner rather than later if you’re a Sterling seller.

If you have an upcoming currency requirement involving the Pound it’s worth your time getting in contact with me (Joseph Wright) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call in and ask reception for Joe on 01494 787 478.

 

Is the pound likely to recover? (Dayle Littlejohn)

Many economists pre referendum predicted if the UK were to leave the European Union the pounds exchange rates would plummet and economic data would deteriorate. One month later it seems the majority of economists were right.

Last week UK Prime Minister Theresa May started her talks with German Chancellor Angela Merkel and French President Francois Hollande. Talks seemed to ok with the German Chancellor however the French President made it clear, for the UK to trade for free in the single market, they would have to accept the free movement of people. This was the main reason the UK decided to leave the EU therefore one leader is going to have to back down and I believe it will be Theresa May.

The latest release of Markit’s purchasing Managers index has fallen to the lowest levels since April 2009. Manufacturing PMI fell to 49.1 from 52.1 and Markit’s Services PMI plummeted to 47.4 from 52.3. The data release suggests the UK are heading for another recession and therefore an interest rate cut and further stimulus (quantitative easing) is inevitable.

Looking ahead the UK have their next interest rate decision on the 4th August. With the PMI data release this week and the Monetary Policy Committee statement that they would loosen monetary policy if required, the pounds future for the remainder of the year is looking bleak. I expect sharp falls after August 4th.

Very simply if I were trading GBP into a foreign currency in the next 6 months and I had the sterling available there’s a good chance I would trade before August 4th. However the other currency you are buying might change my opinion.

If you have a currency exchange to make involving the pound it makes sense to explore all of your options. Here at Pound Sterling Forecast we understand every client’s situation is different, therefore we devise a strategy that meets your needs and requirements. As for exchange rates we can beat any UK brokerage or bank and I look forward to proving this to you. The clients I deal with are high net individuals, businesses and property buyers and sellers that are trading £10,000 to the multi millions.

Feel free to email me with the currency pair you are trading (GBPEUR. GBPUSD, GBPAUD) and the reason for the transfer (transfer of wages, property purchase) and I will respond with my forecast and the process of using our company. drl@currencies.co.uk

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

PMI Data causes huge Sterling falls against the Euro (Tom Holian)

The Purchasing Manager’s Index published yesterday morning showed the biggest fall in the UK’s economic activity since April 2009 and the rate to buy Euros has fallen.

The data from the PMI published by Markit showed a fall to 47.7 and manufacturing and service sectors both showed a big fall.

The figures can directly be attributed to the impact of the EU referendum vote and the Brexit has caused this big drop in activity.

UK business was clearly adopting the wait and see approach and this has been reflected in the data.

Chief economist at Markit Chris Williamson has suggested that the economy could even contract by 0.4% during the third quarter which if this is the case could cause huge problems for Sterling exchange rates in the future.

This negative data could prompt the Bank of England to make changes to monetary policy when their next meeting takes place on 4th August.

BoE governor Mark Carney has already spoken out on a number of times suggesting that the central bank will do what it needs to in order to settle the British economy in the wake of the Brexit vote and if we see a change when the meeting takes place then this could also cause problems for the Pound.

Later this week on Wednesday the UK releases GDP data for the second quarter. The data will include the Brexit period so again any signs of things slowing down could see the Pound fall vs the Euro.

One potential shining light next week for anyone buying Euros is that of the European banking stress tests which are due to take place on 29th July at 9pm.

Suspiciously the data is being published outside of business hours as I think the expectation is for some banks to fail.

A total of 51 banks across Europe will be put under test conditions and my expectation is that the banks in Italy in particular could struggle. They currently owe EUR550bn of which almost half of that is due to French banks. Therefore, any problems could see a reversal of fortune for the Euro.

If you have a currency transfer to make and are not sure what to do 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

I look forward to hearing from you.

 

 

 

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