Daily Archives: May 6, 2010
Pound Sterling Forecast right so far…. Ok guys – it’s nearly crunch time… Just what lies ahead for the Pound this year?
Good evening to those of you watching the election with a vested interest, it is bound to be a night of ups and downs and is going to play a major part in the value of the Pound going forward in my opinion.
This site has only been running for two months and so far myself and my fellow authors have manged to get things pretty much spot on in previous posts… I stuck my neck on the line weeks ago saying I thought the Pound could only gain ground against the Euro in the short term and i’m pleased to say I was right… at the same time feeling sorry for those who have sold property abroad and whilst waiting for completion have seen money slowly go down the drain due to exchange rates.
I also said I thought that David Cameron would win by a majority and Sterling would continue to rise following the election… this prediction is well and truely in the balance and many will be watching eagerly until the early hours to see the outcome.. I know I will!
The phones on our trading floor have been busier than they have been in months this week and it has led to some very early mornings and late nights to keep up with the demand for currency transfers from my clients.
All being well for those with foreign currency to buy the tories will win by majority and the Pound should (however nothing is ever set in stone) gain ground against all major currencies – a hung parliament in my opinion will have the opposite effect.
Political certainty is one of the four factors that affect the value of a currency along with economic stabilty, acts of terror and acts of god so if you have a upcoming need to buy or sell the pound it is imperative you keep in touch with an expert on the markets.
Have a great evening and I hope the result goes the right way for you!
How the election could affect GBP Exchange rates?
The general election has caused a great deal of volatility for sterling exchange rates over the last few weeks. Anyone with a currency requirement will have had a close eye on the market I’m sure. While anyone selling foreign currency may not have been too happy, if you are looking to purchase foreign currency no doubt the current spike makes things a little more attractive.
IN the most basic terms I’m expecting the following GBP movement based on the election
- Hung Parliament - Sterling weakness, with the pound dropping 2% percent max across the board
- Conservative Majority – Sterling strength, I don’t expect more than 1.5% gains across the board
* My own disclaimer is that this obviously is a very crude analysis! With all currency transfers you need to consider the other side of the transaction i.e. in GBPEUR, the issues affecting the Euro, like the Greek crisis, but as a rule of thumb it’s a good guide in my opinion.
How to manage your transfer
It is always incredibly difficult to pick the peak of a spike, especially when it is based on a general election. In such a situation it’s best to try to take a step back and look at the return you are currently getting. Ask yourself, “if rates move in the wrong direction, can I afford to take pay the extra?” If you can and you are a risk taker, it may be worth seeing how things pan out with the election. However, If you tend to be more prudent and the return on your currency at present is acceptable, it may be worth booking a rate today.
Either way, if you want to find out a little more about the contract types available, and the ways in which you can hedge your bets (book 50% today and 50% after the election for example), then email me ajm@currencies.co.uk or fill in the enquiry form on the right of this page.
