Pound Sterling Forecast

Good Afternoon,

The pound witnessed some excellent gains against the Euro today spiking at 1.2098 before dipping back down to 1.2054 at time of writing.

The main reason for the movement is mainly due to events in Greece. It seems that time is running out on Greece to implement their austerity measures and Greek politicians are arguing as to how to cut their public sector GDP by around 3 billion Euros. The politicians need to sign this off otherwise they will not receive the 130 billion Euro bailout package
that is due.

France & Germany have come out with very hard comments pressuring financially troubled Greece to quickly complete deals to cut its debt and impose more unpopular austerity measures.

For clients that need to buy or sell Euros now is a very tricky time. With the amount of uncertainty out there at the moment I would suggest if you are buying Euros to capitalise on the uncertainty and achieve some of the best levels we have seen for a year or so.

Today’s movement of nearly a cent from high to low goes to show that even the markets don’t know what is around the corner and if there is a resolution for Greece soon (In my opinion there will be) you should act quickly as the rate can drop very quickly once the pound has spiked.

With the interest rate decision out on Thursday if the dreaded QE does happen then sterling could easily dip below 1.20 once more. It was only a few days ago that sterling exchange rates hit a low of 1.1899. Don’t get caught out holding out for a little bit more to get your fingers burnt. Please feel free to contact me at bma@currencies.co.uk and we can discuss your requirement and the options that are available to you.

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I look forward to speaking with you.

The pound has continued its mixed performance according to on going international sentiments. I think it is fair to say that the poor state of the UK and its finances is hampering any kind of major comeback. On the data front the key market  mover will be whether or not we see QE this Thursday, but there is also a host of other data including Manufacturing and Industrial Production data as well as Trade Balance data. House price data this morning showed a small 0.6% increase in the last month according to Halifax, although they are down 1.8% on last year. Last weeks PMI data was generally positive but I think the underlying sentiments show that the UK is suffering. The recent run of not so bad data may mean any further QE is on the backburner for the time being however.

Against the Euro the pound is still touching the excellent highs seen for most of the year. Aside from the above data the key news story will surely be the outcome over Greece. I feel focus will be on not only Thursday’s QE decision but also whether or not the ECB cut rates on Thursday. There is definitely the chance of some big movements around this time as investors second guess the outcomes. It is worth noting that GBPEUR has been range bound at 1.19-1.2150 in the last month which is not massive when you consider the continued pressures on both currencies. We may well see the rate break out of this range this week depending on the outcomes of the above events.

Whichever way the market moves we can help secure preferential and commercial rates of exchange. For a full discussion of all the events affecting your trades please feel free to contact me direct on jmw@currencies.co.uk