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Sterling rises against the Euro following US Inflation Data (Tom Holian)

Sterling Euro exchange rates have broken through 1.40 again during Friday’s trading session which is the 5th time this has happened since 2015.

However, on all the previous occasions this rate has only lasted for a day or two providing very short term opportunities to buy Euros at these levels.

US inflation data was published on Friday afternoon and this came out at 1.8% compared to the expected 1.7% which led to the Dollar strengthening against both Sterling & Euro.

When the Dollar strengthens this often results in Euro weakness which is why we saw Sterling breaking through 1.40 again. The reason that the data is good news for the US is that it means it may bring an interest rate hike closer to happening.

A couple of months ago there were expectations of a US rate hike in June which kept GBPUSD rates below 1.50 but over the last few weeks the data has not been quite positive enough for this original prediction to come true.

Indeed, recent Fed comments have said an interest rate hike may come but it is data-dependent. The likelihood is that it will happen this year but not yet.

The other reason for such Dollar strength is that if we look at both the UK and Eurozone, inflation is much lower in comparison encouraging global investors to buy the US Dollar.

The Greek problem is still ongoing and the uncertainty surrounding its debt problems are keeping the Euro weak. However, if and when the problem is sorted we could see Sterling Euro exchange rates fall sharply.

Therefore, if you’re buying a property abroad and want to safeguard your exchange rates then you may wish to consider buying a forward contract which allows you to fix exchange rates based on currency 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

 

 

 

Sterling Slides Following Draghi Comments (Matthew Vassallo)

Sterling’s value has plunged against the EUR during Friday trading, with the single currency spiking by almost 2 cents at the high. This move has pushed GBP/EUR rates back below 1.40, proving once again how quickly market conditions and sentiment can change. Earlier this week we saw Sterling’s recent momentum against the EUR continue and with mixed reports surrounding Greece the markets seemed unsure which direction to take.

The catalyst for today’s EUR improvement is likely to be European Central Bank (ECB) president Mario Draghi’s comments during his press conference earlier today. He told the world’s central bankers that the current economic conditions inside the Eurozone had improved and it was looking “brighter today than it has done for seven years”. These comments immediately brought market support for the single currency and although the Pound has moved back above 1.40 this afternoon, I do feel the current levels should be taken advantage of if you have EUR to buy.

Despite these losses against the EUR the Pound has held its position against the USD and with rates back above 1.55 the Pound has certainly found some support following a tough couple of months. Cable rates had moved back below 1.50 recently but with uncertainty over when the US FED will raise interest rates, along with an inconsistent run of economic data, the Pound has managed to claw its way back up to the current levels.

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

Where next for sterling. (Dayle Littlejohn)

Yesterday the Bank of England released the latest interest rate decision minutes. 9 members voted to keep the interest rate on hold however 2 members  were finely balanced whether to hike or hold. For clients who are looking to trade currency for the first time, the interest rate for an economy is a key driver to movement with the exchange rate. If the Bank of England were to raise interest rates essentially you should get more foreign currency for your £.

Governor of the Bank of England Mark Carney this week reveled he thinks inflation will be at 2% by the end of 2015. If this is the case I believe there is a strong possibility the Bank of England will raise interest rates early in 2016.

In the meantime if you are looking to buy a foreign currency in the short term retail sales figures have come in better than expected and trading as soon as possible may be wise. Having an understanding of upcoming economic data releases is important when trading. For further information feel free to email me on drl@currencies.co.uk or call 01494 787 478 and quote Dayle Littlejohn.

 

Sterling Euro Exchange Rates hit 1.40 (Tom Holian)

Sterling vs Euro exchange rates have broken through 1.40 for the fourth time this year as problems persist in the Eurozone.

There has been talk recently that the ECB will step up bond purchases in the next few weeks ahead of an expected summer slowdown.

The currently monthly plan is for €60bn and this is likely to weaken the Euro creating excellent buying opportunities and sending Sterling Euro rates above 1.40 today.

The current plan involves €1.1 trillion until September 2016 and purchasing more bonds earlier in the month has caused this weakness in the Euro.

Today the MPC confirmed a 9-0 vote in keeping interest rates on hold.

However, 2 of the members did confirm that the decision was finely in the balance which against helped to strengthen the Pound against all major currencies.

Tomorrow the UK releases Retail Sales with the expectation for 3.7% year on year.

With Marks and Spencer showing its first yearly profit rise in 4 years if we use them as a barometer then I think the figures out tomorrow will be strong for the UK and this could be positive for Sterling.

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

 

 

 

U.K records first negative inflation since records began in 1996 – European Central Bank comments lead to Euro weakness (Daniel Wright)

The morning started off with Euro weakness across the board and a minor Dollar fight back as we heard comments from members of the European Central Bank that they would be prepared to go even further if required to ensure that they achieve inflation of 2% and it looks like these comments broadly surround the QE program.

Expectations are that QE for the Eurozone will continue through September 2016 and bearing in mind that both the U.K and U.S are much deeper into their QE projects this may hold back the Euros from seeing too much strength in the near term.

Greece of course will still be an extremely important issue and any further news surrounding this issue will no doubt also have quite an impact.

Regarding the U.K and Sterling, inflation data out this morning has led to the Pound dropping against most majors other than the Euro. Inflation came out negative for the first time since records were taken in 1996 however the Bank of England had predicted that we would see this soon so it is not a great surprise.

Many are blaming Easter for these year on year figures as Easter had been fairly early this year. Usually over Easter travel costs are much higher and due to it being earlier this rise in costs fell outside the accounting period so we may see a spike back in inflation figures next month.

If you have an upcoming currency transfer to carry out involving either buying or selling the Pound for any major currency and you would like my personal assistance then feel free to contact me directly. I deal with thousands of private and corporate clients exchanging money for business needs and property purchases/sales and I would be more than happy to help you too. You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you are looking to do and I will get in touch.

A Volatile Morning for Sterling Exchange Rates (Matthew Vassallo)

It’s been an extremely volatile day for Sterling exchange rates, with huge swings against the EUR, USD & NZD. The Pound was out of the blocks following the opening of European trading, with roughly a cent and a half gained on the EUR in less than an hour. These gains were quickly extinguished however, with the EUR gaining support following poor UK inflation data. The Pound had moved back towards 1.40 against the EUR at yesterday’s high but following this morning’s dip is now sitting around 1.3850.

GBP/USD rates have dropped sharply during Tuesday’s trading, with the Greenback gaining almost 2 cents from this morning’s low. The Pound has benefited from a run of poor US data, which pushed Sterling value up, although after today’s losses it is back below 1.55 on the exchange. It was widely anticipated that the US were going to raise interest rates this summer but this move looked ever more unlikely following the poor US economic data mentioned and this is one of the main catalysts for Sterling’s recent run against the USD. However, head of the FED Janet Yellen tried to downplay fears of poor US growth and even alluded to the fact they could still raise rates this summer. Personally I think this is highly unlikely but even the mere mention of this has helped ease the recent pressure on the USD, bringing some much needed respite.

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

Where next for the pound?

Rates unexpectedly spiked up after the election but have started to fall particularly in response to the Bank of England cutting growth forecasts last week. On the sterling side the big news this week is another Bank of England report due on Wednesday, if it is anything like the news they released last week it is not looking like it would be good news for sterling! Other important news for the UK is Retail Sales figures this week but I think generally expecting the pound is going to fall this week as the feel good factor from the election wears out.

Making plans when you need to move large sums of money internationally is always sensible. My name is Jonathan and in my work as a specialist currency broker I am here to assist in the planning and execution of any international for payments for say an overseas property or business. One of the worst things to do when making international payments is to use your bank, they won’t give you the best price and the transfer time can be more lengthly than using a currency broker like ourselves.

For more information on our services please contact me Jonathan on jmw@currencies.co.uk

 

Exchange Rate Forecast ( Andrew Bromley )

 

The Week Ahead

Following a rollercoaster week for the Pound last week, this week looks to be no different! The UK releases several key items this week, which should all be handled with care…

Tuesday opens with UK CPI (Consumer Price Index) or inflation figures which will be as expected, just above 0%. The UK has suffered for several quarters with a low rise in the price of goods, especially fuel. Although the small extra money in our pockets may feel nice, the Pound suffers as the Bank of England is missing it’s 2.0% target by a fair distance. The UK CPI figures are followed by the Eurozone Inflation figures. The positive impact of EU Quantitative Easing may be seen so the Euro could strengthen as the Pound weakens…

Wednesday could be the key day of the week for both the Pound and the US Dollar as minutes are released from both countries recent interest rate decision meetings. The Bank of England met late this month following the UK General Election. The main reason that this months minutes could carry a lot of weight is on the back of positive comments last month from two of the Monetary Policy Committee members. They indicated that voting against an interest rate hike was harder, so Pound Strength could follow should similar comments be reported. Perhaps with greater impact on currencies around the world, the US Federal Reserve minutes to their recent meeting could substantially move markets. The recent Interest Rate decision in the US was made just after poor US employment data, with data being the key driver for the US Dollar movement. I therefore wouldn’t be surprised to see the US Dollar move, should the comments indicate the associated rate hike timescale.

*** Breaking News ***

Chicago Federal Reserve member Charles Evans indicated that a June Interest Rate hike is still not off the cards. The USD has subsequently strengthened this morning…

Thursday has a wider selection of slightly smaller data announcements including ‘Markit’ Business confidence figures, UK Retail Sales and US Home Sales figures. As well as this, the Eurozone releases the accounts of it’s Monetary Policy Meeting, potentially moving the Euro…

If you do have an exchange requirement, please feel free to get in touch. You can either call the trading floor directly on 01494 787 478 or email me AJB@currencies.co.uk

Have a good day – enjoy the rain if you’re in the UK!!

 

Sterling Euro Predictions for next week (Tom Holian)

Sterling Euro exchange rates have tailed off towards the end of the week as the markets take a big intake of breath after a very busy last few trading days.

Last week’s UK general election results saw the Pound climb by 4 cents overnight against the single currency as the Tories formed an unexpected majority.

There were big fears of a hung parliament which had scared off investors but the certainty caused Sterling to gain rapidly against all major currencies.

Indeed, earlier this week Sterling Euro pushed past 1.40 for a brief period creating excellent buying opportunities.

However, this was short lived as soon as the we saw the release of Eurozone GDP which came out better than expected.

Bank of England governor Mark Carney stated that the UK is likely to raise interest rates but not until 2016 as he doesn’t want to harm economic growth which incidentally has been downgraded recently causing Sterling to fall.

Next week sees the release of both UK and Eurozone data on Tuesday which will give us an insight into whether or not QE in the Eurozone has been working since its introduction.

This could provide the Pound with some gains early in the week but we could see the Pound lower against the Euro by Thursday if UK Retail Sales are lower than the expected figure of 3.7%.

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

 

 

 

Currency Overview – Exchange Rate Forecast ( Andrew Bromley )

A relatively quiet end to the week from a data release point of view, especially when compared to the Election fall-out last week!

The key points for this week from a Sterling point of view were initially the positive market view prior to the Quarterly Inflation report on Wednesday (expecting positivity towards a rate hike), and then the subsequent Sterling correction following. As per yesterdays ‘blog’, Mark Carney of the Bank of England downgraded the UK growth forecast, casting a shadow of doubt over the potential Interest Rate hike in first quarter of 2016. Carney spoke of concerns towards wage growth in the UK, indicating the large (1 sixth of employed) ‘migrant’ workforce maintaining minimal increases.

From the Pounds point of view next week is busy with two key events – Tuesday morning has Inflation figures which are regularly missing the 2% target and Wednesday has the minutes of the Bank of England Interest Rate meeting. The minutes of last months Interest Rate meeting boosted the Pound, as one of the members of the Monetary Policy Committee indicated that it was harder to vote against keeping rates on hold. If you’re selling Euros it may be wise locking in prior to this date…

Those with NZD / AUD / ZAR exchanges will either be very happy or very unhappy! A mixture of Pound Strength and USD weakness has moved the commodity currencies massively, with rates in excess of 2.1 GBP-NZD, 1.96 GBP -AUD and 19 on the GBP-ZAR! I think these are phenomenal buying levels and that a correction will be made soon – worth moving at these levels in my opinion. Those selling ZAR would be wise to target the 18 region, as the rise in political uncertainty will hamper the Rand from strengthening for a long time yet.

The USD looks towards the FOMC (Federal Open Market Committee) minutes next Wednesday for the most recent indication to their Interest Rate hike. More recent Nonfarm Payroll and unemployment data has improved, however I believe Janet Yellen (chair of the Federal Reserve) will remain ‘dovish’ (meaning with minimal impact) as they are cautious of impacting the markets too heavily. Although USD holders that didn’t move in the 1.40s will be upset with themselves, it should be noted that this period of Dollar weakness will be improving the US export figures – a feel a strong move back to the 1.50s will be seen within the next month.

If you have a currency exchange, please feel free to get in touch. There is no doubt that we will be able to show you saving compared to your current broker so either drop me an email to AJB@currencies.co.uk or call me on the trading line 01494 787 478 (please quote this blog).

Have a good Friday!

Andrew

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