Monthly Archives: May 2011
KIWI Dollar goes from strength to strength
The pound has hit an all time low against the New Zealand Dollar falling below 2 Dollars to the pound. The rate actually hit a low of 1.9981 as the Kiwi Dollar seems to be strengthening against a host of currencies at present. The prospect of rate hikes, a growing economy, and higher commodity prices have led to calls from exporters for the MPC to weaken the currency.
The strength behind the Kiwi seems to be about strong New Zealand fundamentals at present and the improvement and resilience of the economy has been much better than you would have been expected a month or two after the (February 22) earthquake.
New Zealand have had a stream of bullish economic data recently and yesterday’s merchandise trade data, which showed a surplus of $1.1 billion in April, the highest monthly surplus on record. It has helped the Kiwi to strengthen by nearly 15% against the USD this year.
So looking forward for anyone with a requirement to buy NZD over the coming months the forecast does not paint a pretty picture with potential future interest rate hikes in New Zealand. If however you are looking at moving a lump sum back to the UK, US or Australia then now could not be a better time. If you would like assistance in getting more for your money when making your money transfer then please feel free to contact me on bma@currencies.co.uk and I can explain the mechanics of trading with us and we can have a chat about potential future movements for any currency pairing.
Pound and US Dollar weaken, a Euro Stabilises
The pound has taken losses this morning falling half a percent against the euro and similar amounts vs. the Kiwi Dollar, Norwegian Kroner and other scandinavian currencies, and almost 1% against the Swiss Franc.
Despite these losses sterling is still holding up above the 1.15 interbank level against the Euro and is up for the day against the Indian Rupee, Israeli Shekel, Turkish Lira, Thai Baht and Hong Kong Dollar. if you need to make a transfer to any of these currencies, current rates may provide a good opportunity to secure funds.
The US Dollar has lost ground following poor GDP figures yesterday which came in below expectations and poor unemployment figures. The US currency has benefited from risk aversion recently where investors have purchased dollars as a safe haven investment because of the problems in Greece and the know on effect to bond, and equity markets.
Despite serious concerns being raised over Greece again yesterday (see my post 26/5/11) the Euro has stabilised today and made gains on the pound and US Dollar. Clients looking to sell Euros may want to take advantage of this positive moment. If you have a requirement over the next week or so, it’s worth considering the negative impact that recent problems in Greece Portugal and Italy have had. We could see further single currency weakness in the days ahead.
Sterling Euro Spike – gains for the pound today
Sterling euro exchange rates are closing in on the 1.16 interbank level today, following comments from ECB Economist Otmar Issing who said that Greece is ‘insolvent’.
This has weakened the euro and seen flow into the British pound. Couple this with poor GDP figures from the US – further reducing the chance of an already slim interest rate hike in the states. The pound has benefitted in flow from USD to GBP as well and is up half a percent in trading today.
The pound has made good gains against a number of other currencies as well including the New Zealand Dollar GBPNZD, Canadian Dollar GBPCAD and Mexican Peso GBPMXN. If you have a currency requirement in these or any other currency pair, contact a specialist dealer by filling in the form on the right. The currency dealer will be able to explain how you can save money on your transfer and benefit from the very best exchange rates.
GDP Data for the U.K today is key – Purely a revision of quarter one however a large difference to predictions may lead to big swings
Good morning readers, an early start for Pound followers this morning, GDP figures for the U.K are released at 09:30am and as mentioned above, although they are not as important as the initial release, any major change to expectations could easily lead to high volatility.
Expectations are for no change to the first release and for GDP for quarter one to stay at 0.5% so a drop would be worrying and and increase great news.
Gross Domestic Product data generally means whether or not the economy grew or shrank over a period of time (usually measured on an either monthly, quarterly or yearly basis) and should an economy have two quarters of negative growth this leads to them officially being in a recession.
I do not believe the U.K will be heading back this way anytime soon, however there have been many surprises pop up over the past few years, personally it wouldn’t surprise me to see figures as expected if not slightly better this morning, and potentially some Sterling strength today.
If your business carries out regular transactions involving currency exchange, you are buying or selling a property abroad or have any other currency requirement be it large or small, fill in the enquiry form on the right hand side of this page or email me directly djw@currencies.co.uk and I will be more than happy to save you a substantial amount over using your bank.
Sterling losses across the board this morning
The pound has endured a poor start to trading this morning taking losses vs. the Euro, Aussie Dollar, Kiwi Dollar and Swedish Kroner to name just four.
This movement comes despite Public Sector Net Borrowing figures coming in better than expected this morning. It appears that the markets are focusing on other factors such as the ‘risky nature’ of the pound at present. Stock markets dropped yesterday on concerns over a Greek debt restructuring and this has moved investors away from risky assets like the pound and into safe have currencies like the US Dollar. Couple with this potential cost to the UK economy of the volcanic ash cloud coming over from Iceland, and the recent spike in the value of the pound could well be reversed over the coming days.
If you have an upcoming currency transfer and would like to see what specific forecasts are for your currency pair, fill in the enquiry form on the right to discuss your options with an experienced currency specialist.
GDP figures key this week – Euro weakness today following general concerns and poor PMI data this morning
The Pound has had a mixed start to the week so far, Making gains against the Euro, Australian Dollar and a host of other currencies whilst dropping against the Dollar, Yen and Swiss Franc.
It is a mixed market at the moment and really hard to call, GDP ( Gross Domestic Product) figures are key this week and we see this data out for Germany tomorrow morning, the U.K on Wednesday and the States on Thursday afternoon. GDP measures how much an economy has grown or shrunk over a period of time. These particular releases are revisions from the first quarter of 2011, and any changes to what has been predicted or was released originally could well lead to a lot of volatility.
Certainly worth keeping a close eye on the three and it sets us up to have an interesting week, we also have public sector net borrowing out for the U.K tomorrow morning at 09:30am which is bound to give us some talking points… watch this space for the effects that the releases do have.
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.
A Week Of Milestones
Two important milestones for Pound Sterling Forecast this week, and a great big thank you to those of you regular readers who have told your friends about us.
Firstly, after just one year of creating the Blog we have today hit 100,000 unique visits, meaning 100,000 seperate people have been on the site, this is with no advertising and I am hoping it can only be down to the informative content pitched at a level everyone can understand, sometimes quite rare when talking finance as I am sure you are aware.
The second milestone is that the three main contributors to the site – Myself (Daniel Wright) Aidan and Ben have just reached 10,000 foreign exchange deals between the three of us, turning over hundreds of millions of Pounds for our company.
This should fill you with the peace of mind that if you have an upcoming transaction that you are looking to carry out, we are the guys to do it… We work for an FSA regulated company (Foreign Currency Direct) authorised as a payments institute and we specialise in saving you money over the banks like we have done for the past 10 years.
Please continue to promote Pound Sterling Forecast, any comments or suggestions for improvement are welcomed from you, the reader and if you need to send money overseas or bring money back, we deal in amounts from £500 to multi million pound transactions for private and corporate clients, just fill in the enquiry form on the right hand side of this page and one of us will be straight in touch providing this is within office hours, if not then at the next opportunity we get.
Minimal data out todayso I expect a quiet one for the Pound
Thanks and have a great day,.
Sterling flat in thursday trading
The pound has remained relatively stable today with minimal movements on the market. GBPUSD rates remain close to 2 month lows, and we’ve seen large volume trades from the greenback to sterling as clients look to maximise returns on this transfer.
There is a lack of sterling focused economic data on the market tomorrow, so we could see speculation drive rates GBP rates. We do have German inflation data out at 09:00 and Canadian consumer price index data (inflation) out at 12:00. if you are looking to move Euros or CAD, one of PSF’s specialist brokers will be able to assist, so fill in the form on the right for more information.
Overall I’m expecting UK based analysts to be focusing on GDP data out next Wednesday. This may shed some light on the likelihood of an interest rate hike in the UK currently priced in on consensus, for November.
BOE Minutes, Consumer Confidence, Retail Sales, FOMC Minutes, NZD and Milk and lots more news on GBP,EUR,USD and NZD by Daniel Wright
TODAY’S CURRENCY FORECAST
“Confidence in the U.K is close to an all time low again – can you really see the Pound rallying in the near future?”
Market Summary
This report will take a look at the cost of sending money overseas and factors that could affect your currency transfer, focusing on:
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Bank of England Minutes & Unemployment
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Euro News
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Federal Reserve Minutes (USD)
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Milk prices lead to NZD strength
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Today’s data
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Breaking news – Consumer Confidence
The table below shows the percentage movement of exchange rates over the yesterday along with the extra currency you could have bought if buying with £200,000.
| Currency | % change over yesterday | Difference in £200,000 |
| GBPEUR | -0.8% | €1820 |
| GBPUSD | -0.6% | USD $1940 |
| GBPNZD | -0.84% | NZD 3450 |
Bank of England minutes and Unemployment
Yesterday morning saw the release of the Bank of England minutes from the latest interest rate decision, where rates were kept on hold at the start of this month. Members of the Monetary Policy committee remained unchanged in their votes for no rate hike at a level of 6-3.
This led to a little Sterling weakness as it pushes the likelihood of a rate hike in the U.K back a little further, for non-regular readers an increase in rates generally leads to strength for that particular currency, as it makes it more attractive to investors due to getting a higher return for their funds.
Adding to Sterling’s woes yesterday were particularly poor unemployment figures, coming out pretty much as expected but still showing a claimant count rate of 4.6%. This assisted with the losses seen over the trading day and once again shows how important it is to stay in close contact with a currency broker as movements on the market can be highly expensive.
Euro News
Many clients have been asking me of late just what is going on with the Euro with the well documented troubles with numerous European economies… personally I feel there is a lot more to come, however we have been thinking this for quite some time now.
Should things blow up and Spain for instance step up and require assistance, I would not be surprised to see rates head back towards 1.20. However, The ECB are extremely good at making the best of a bad situation in press conferences and announcements, and with a potential rate hike once again in the near future for Europe, rates could easily drop closer to 1.10 before they start their climb again.
To get a clear explanation of the factors affecting your rate going forward either email me at djw@currencies.co.uk or fill in the enquiry form on the right of this page.
Federal Reserve Minutes (FOMC)
Last night saw the release of the FOMC minutes, similar to the Bank of England minutes, along with a speech by Head of the Fed Ben Bernanke. It appears the U.S are also some way from a rate hike and many predictions now are that it will not happen until 2012, however should they continue to see rising oil and commodity prices they may need to rethink further down the line.
Fonterra Milk Auction helps NZD
The New Zealand Dollar made some good headway against the pound yesterday following milk auctions showing an increase in price of 16% since the end of last year.
This may surprise some of you but with milk being New Zealand’s main commodity this should mean that there is more money coming in and in essence the economy should perform slightly better as a whole therefore increasing the value of the New Zealand Dollar.
Today’s Data
Today we see two data releases of note, firstly for the Pound and then shortly after a speech that may affect the Euro.
At 09:30am we see retail sales for the U.K, an increase in sales is expected due to extra bank holidays and the royal wedding in April.
At 10:00am head of the European Central Bank Jean Claude Trichet speaks, giving his current stature on the economy in Europe as a whole and his plans on monetary policy going forward, usually Trichet is fairly positive about the Euro however last time he spoke he actually managed to weaken the Euro for the first time in a while.
Don’t take the risk if you have a pending transfer be it buying or selling the Pound as the current market is not one to gamble on unless you are a big risk taker. At least place a Stop loss or Limit order to protect yourself from adverse market movements, fill in the form on the right hand side of this pagewe will greatly explain how these tools can help you.
Breaking News – Consumer Confidence
Overnight Consumer Confidence came out for the U.K and had sank to a worrying low of just 43, merely 4 points above the record low seen in February. Consumer Confidence is measured on a mark of 50 and anything above suggests people are confident about the economy and its performance going forward, below means the opposite. It is thought that the lack of jobs is one of the key drivers to this.
IMF Chief Resigns
IMF Chief Mr Stauss Khan has also resigned over night, he still firmly stood his ground that he was totally innocent, however he could not continue his role under the current circumstances. This could lead to a little volatility this morning as speculation increases as to who will replace him and uncertainty remains.
Sterling exchange rates fall after Bank of England minutes
The pound has lost a little ground across the board this morning, after the Bank of England minutes have been released showing no change in voting. This reduces expectaion of interest rate hikes in the UK, typically a rate hike would strengthen the pound, so this is not great news for sterling.
Unemployment figures released at the same time showed slightly better figures than expected, in all areas except claimant count which came out above expectations.
This movement could continue this morning, but rates this afternoon will depend very much on US mortgage applications at noon (UK time) and the Federal Open Market Committee meeting this evening. This determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth, therefore, it can cause volatility. The US have been slow to address budget deficit issues, so in theory if no reference is made to some sort of solution, the USD could weaken.
On the euro side of things focus and concerns on the debt issues in Greece and Portugal appear to have subsided (or been brushed under the carpet with another bailout – depending on your personal interpretation). Any new issues could cause EUR weakness, but at present the single currency appears to be holding relatively firm across the board.
For more information on any of the topics or data discussed in this report, you can contact the author Aidan Meikle, directly at ajm@currencies.co.uk .
