Pound Sterling Forecast

The pound had another bad day yesterday losing a cent vs. both the euro and dollar. Sterling remains a concern for investors following GDP figures for the UK at 09:30 yesterday. Month on Month data was a touch better than the expected -0.6 at -0.5, while year on year data remains in line with expectations at 1.5% growth. This bought the UK’s economic plight to the forefront of traders and investors minds as it highlights how unlikely an interest rate hike is, subsequently reducing demand for the pound.

Today there is a host of data due out that is worth keeping an eye on:

For the UK we have the CBI trade survey this morning, which may give us an insight into short-term trends in the UK retail and wholesale distribution sector.  It may give us a clue about how retail sales figure will look in April.  Because the retail sector is so important to the UK economy this data carry’s a fair bit of weight and a figure that varies from expectations could cause volatility.

Overnight we have UK consumer confidence, expectations are for a low figure, so a positive release could offer some support to sterling.

From Europe we have consumer confidence figures early on in the morning.  With all the problems in Portugal and other countries like Spain and Italy still under scrutiny, it will be interesting to see if this uncertainty is filtering through to confidence figures.  For more information on how this could affect the euro, get in touch via the form on the right.

From the US today we have mortgage application figures, key to the struggling housing sector, and unemployment data.  Both highlight areas of the US economy that are struggling and could have a negative effect on the USD.  However, greenback exchange rate movement may not be as clear cut… with the US currency benefitting from safe haven movement as a result of the problems in the Middle East, and the knock on effect to oil prices, this could overshadow any US data.

Later in the evening speeches from FED reserve presidents Fisher and Bullard, could both influence investor sentiment and cause exchange rate movement.

If you have a currency exchange to make between any currency pair the Pound sterling Forecast experts will be happy to offer their opinion on market movements and advice on the most suitable contract for you requirements.  For more information, fill in the form on the right of this page.

The fall in the value of the pound as witnessed graphically on PSF’s new currency graphs on the right, highlights the uncertainty and concern over the UK economy and subsequently currency at present. 

The pound was riding high on speculation of an interest rate increase in May, however, that has now been priced in for august and as a result sterling has lost value across the board.

The problems in Portugal in theory would have more of a negative effect on the euro, but the pound has in fact suffered because the UK is set to contribute a large sum to a bailout.  So as that looks more and more likely the pound has lost value against the single currency.

Data out today from the US, showed personal consumption and pending new home sales both better than expected this lent support to the USD. With interbank levels having breaching the 1.60 mark during trading it was interesting to see that by close in the UK, GBPUSD had recovered above this important physiological level, suggesting and underlying support for the pound vs. the US currency.

If you are currently holding foreign currency and considering bringing funds back to the UK, or if you are based overseas looking to make an investment or purchase in the UK now may be an excellent time to secure funds.  For more information, or to speak to a currency expert you can fill in the form on the right.

The pound has continued its run of bad form in early morning trading, dropping against most majors, as an interest hike in the U.K appears to be sailing even further away, this is not great news for those of you looking to purchase a property overseas or make an important business transaction.

A member of the BOE stated that they now expect inflation to drop to 1.5% in 2012. Adam Posen stated that the Governments austerity drive and a weak economy would lead to a decline in consumer spending.

This now suggests that we may be further away from a hike in interest rates in the U.K and for those of you that are not aware a hike in rates is generally seen as positive for the currency concerned as it makes it much more attractive to investors, so these comments alone have now led to further Sterling weakness.

We have athe GDP revision out tomorrow morning which is the next release of note so do keep your eyes peeled for that one, if you have a transfer to make or a genreal enquiry about a specific currency pairing then please do feel free to contact me directly by filling in the enquiry form on the right hand side of this page and I will be more than happy to help.

The bank of England have just released the minutes from their last meeting and indeed there has been no change in the voting regarding an interest rate hike.

Some investors may have speculated that potentially one more member of the BOE may have voted in favour therefore the fact that they didn’t has led to weakness straight after the release.

This does now essentially push the probability of a rate hike in the U.K further back and for those of you that are not aware a hike in interest rates generally leads to strength for the currency concerned as it then becomes more attractive to investors.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Public sector borrowing last month was £11.8bn, a record for the month of February, while UK CPI inflation hit 4.4% and Retail prices hit a 20 year high at 5.5% .  The pound has risen against a host of major currencies as a result.

Inflation figures are way above the Bank of England’s 2% target, and this has increased speculation that we may see an interest rate hike in May.  Personally I think it’s more likely to be in the second half of the year, but the figures certainly make it a difficult decision for the Monetary Policy Committee members at the bank of England who have to make the decision.

The official government borrowing figure, provided by the Office for National Statistics, was nearly double the £6.9bn forecast by economists and analysts.

Public sector net borrowing now stands at £123.5bn for the financial year so far, and while today’s figure of 11.8 is awful, the government remains on course to meet the £149bn borrowing total forecast for the full year. While the latest months borrowing may be a cause for concern, the fact that the government is still on target, is viewed as good news for the UK economy and subsequently sterling.

The pound has lost a fair bit of ground vs. the Euro recently, but has spiked up in the last few days against the US Dollar, currently trading at a 13 month high.  If you need to move Euro’s in the next few days, or dollars over the next few months, now may be the perfect time to reserve a rate.  For more information or to speak to a currency specialist, fill in the form on the right.

EARLY MORNING GAINS

The pound has just gained against most major currencies this morning as the inflation figures for the UK have come out higher than expected. This has led to further speculation that the Bank of England may raise interest rates in the coming months.

UK BUDGET

 Wednesday the Chancellor will present his first budget portraying it as the ‘budget for growth’

Osborne first outlined plans in October to slash some £80 billion of public expenditure over five years, and has already lifted VAT from 17.5% to 20% in a bid to raise an extra £13 billion for the country’s coffers this year. We believe more painful measures are still to come, including spending cuts on services like welfare and a rise in the retirement age.

But what will the general public think of the budget and how hard will it affect everyone? With the cuts expected to be vigorous let’s just hope they don’t hamper economic growth over the course of this year because if economic growth does decline we could see the pound be the main loser.

The budget kicks off at 12.30 and it will be interesting to see how the markets react to each announcement that comes out.

You may find placing Stop losses and limit orders during the course of the hectic day your best option. Utilising these tools may stop your currency transfer being more expensive than you had budgeted for if things go the wrong way during the budget.            

Bank of England Minutes

Just before the Chancellor makes his budget speech tomorrow the Bank of England’s MPC minutes are also released. The currency markets will be watching with great anticipation as the minutes are analysed in an attempt to gauge the current MPC’s sentiment. If we get a much closer vote of 5-4 then I would expect to see the pound gather momentum as expectation will be rife that a rate hike is just around the corner. However if we get the same 6-3 vote then it will lead us to believe that we may not see interest rates rise until Q4 and this could make tomorrow an extremely bad day for the pound. If the latter happens then I would expect to see the pound linger in the early teens against the Euro and early 1.60’s against the US Dollar.

Tomorrow could be one of the most volatile days in the calendar year for the pound if the budget and minutes combined do not paint a pretty picture.

Good morning readers and I hope you had a great weekend!

This week is due to be key for the Pound with some extremely important data releases due out over the next few days.

Tomorrow we see a busy morning with inflationary and public sector net borrowing data out at 09:30am. Should we see inflation continuing to increase then it opens the door slightly wider for a rate increase as this is one of the routes the Bank of England can take to tackle high inflation, along with this if the countryis now borrowing a huge amount this may knock the Pound back slightly.

Personally it wouldn’t surprise me to see reasonably high figures for inlation but along with this high borrowing too although I would expect the Pound to be up against most major currencies by close of play unless we have any other surprises pop up.

Wednesday is just as important as we have the Bank of England minutes due and all eyes will be on just how many members of the BOE voted in favour of a rate hike, should we see still 3 of the 9 members in favour the markets may not see too much movement howver any change to this figure (higher leading to strength and lower weakness) then I would expect an extremely volatile day.

A rate hike is generally seen as positive for the currency concerned and markets move on rumour as well as fact, the BOE appears to keep on pushing back the potential hike in the U.K and other economies are starting to look like they may be pushing up rates earlier which isn’t great for Sterling.

Finally, Thursday sees retail sales confirming how much was spent on the high street last month, with most of the adverse weather out of the way in the U.K now I expect these to be slightly better.

In short, I can see a better week for Sterling and indeed some better levels of exchange come the end of the week.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Sterling and indeed most majors have had an extremely volatile week with the problems over in Japan and it has proved once again that if you have a pending currency transaction of any significance then it is exactly the same holding off and hoping for the rates to move in your favour as it is walking down to the local bookmakers and putting £1000 on a horse to win the Gold Cup today!

Personally I feel we may see a recovery for the Pound in the near term however as we have seen over the past few months things keep on popping up to knock it back again, just as rates start to look achievable.

Selling Euros or Swiss Francs?

This is a fantastic time to be bringing these two currencies back into Sterling and personally I cannot see it getting an awful lot better, should you be looking to do this then let us maximise your rate even more and save you potentially £1000s, just fill in the enquiry form on the right hand side and I will personally get back in touch with you shortly.

Buying Australian or New Zealand Dollars?

We have seen a short term spike back in the right direction for those of you looking to do this, a limit or stop order may be the tactic with these currencies as there may be a little more to come from the market, however you never know, contact me directly for more details.

The pound is enduring a volatile session on the currency markets today, with loses of 1% vs the USD, 0.35% vs the EUR and almost 2% vs. the JPY.

From a sterling point of view we’ve also had some negative economic data. UK house prices fell 1.4% from December, in January according to Department for Communities and Local Government (DCLG) figures. This has also contributed to sterling weakness.

On stock markets across the world we are seeing big losses as the Japanese disaster has a ripple effect across financial markets. This is having a knock on effect to financial markets as more transactions take place and higher volumes of currency are exchanged. This looks set to continue as events unfold in Japan.

Currencies used in carry trades (high yielding ones like the AUD, NZD and ZAR) are also volatile as many speculators are unwinding their Yen based positions. This is weakening the ZAR and AUD and strengthening the JPY.

If you ave any questions regarding how your requirements could be affected, feel free to fill in the form on the right.

Upcoming Data

Today will be a busy day on the markets with lots of data releases around the Globe. Most important for the USD is the interest rate decision at 6.00pm. Rates are expected to be kept on hold but the unexpected can always move the market so feel free to stay in contact with us in the lead up to the decision.

If you have a Euro requirement today’s releases involve employment change and investor sentiment in Germany both released this morning. For the UK we have Nationwide consumer confidence and housing data both at 9.30.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.