Monthly Archives: April 2012
Sterling hits a 32 month high on a trade weighted basis against the major currencies
If you need to make a transfer into a foreign currency then now may be the ideal time to seriously consider your options. The Pound is the highest it has been against a basket of major currencies for over 32 months and with the fact that the U.K is technically in a recession you just cannot be too sure that these gains can continue.?!
Sterling Euro
With Spain notably in quite a lot of trouble and plenty of political problems within Europe you would imagine that the Euro is still in for a rocky period. Indeed all the signs are there that the Europeans will struggle in the coming few weeks and pressure will mount. There is no smoke without fire and I’m sure there is a lot more to come out from behind closed doors in the coming few weeks however do be wary.. Rates against the Euro at points today have been the best in 22 months and it is usually those that are greedy and hold out for that little extra that get their fingers burnt.
Sterling Dollar
TheDollar has also weakened of late following negative comments from the Federal Reserve in their latest press conference. Interest rates are set to stay low until 2014 and there is still the potential for further Quantitative Easing which may weaken
the Dollar. Beware though, in times of uncertainty globally (which we would see if European problems kick off) investors tend to run to the Dollar as a safe haven and the Dollar generally strengthens. Gold is also a safer haven and priced in Dollars so this may also increase demand for Dollars making the Dollar gain back ground.
Sterling Australian Dollar and New Zealand Dollar
A potential interest rate cut in the near future may weaken the Australian Dollar once more (an interest rate cut is generally seen as negative for the currency concerned). The Australian and New Zealand
Dollar have both had a tougher time lately as in times of uncertainty investors tend to avoid these ‘riskier’ currencies. Couple that with China slowing down ever so slightly and we may have a little more weakness to come.
Are you getting the best rates of exchange and level of service at present? Do you even compare?
If the answer to any of the above heading is no then I can help you… Even if you just want a quick comparison to ensure that you aren’t losing money on your currency transfers I am happy to give you that. Feel free to email me directly djw@currencies.co.uk having spent years working on the currency markets I can help you both in terms of getting great rates and with timely market updates to help you decide just when to book your currency as even the smallest movement in your favour can make quite a big difference in what quite simply are extremely volatile times.
US GDP Data Supports The Pound
US GDP data this afternoon came out at 2.2% showing the US economy is still on the road to recovery but the figures were significantly down on the 3% growth seen last quarter. The news has seen sterling push on against the Dollar rising to a near 8 month high offering a great opportunity to buy Dollars with the interbank rate hitting over 1.6250. Higher than expected consumer spending could not offset a slight cut back in business investment in the US and the data provides ammunition for both Republicans and Democrats in an election year as it is not a strong indication of growth, but does provide some evidence of economic recovery.
The global confidence helped sterling claw back some of this mornings session losses against a range of currencies and left the pound relatively unchanged from the market open (except against the USD). The next big indicator will be US Non Farm Payrolls this time next week and will be a sign of how many jobs have been created in the US and will be key to presidential election campaigns as well as global confidence and GBP USD rates. Despite entering recession the pound is presently at a 20 month high on a trade weighted basket of currencies and my suspicion is this may even rally a touch further next week but I would be surprised if we see substantial further gains until the next Bank of England meeting is out of the way which is a long time to wait in currency terms.
If you have a currency transfer to make and would like some free information and an indication of the exchange r
Spain sees credit rating downgrade leading to further Euro weakness against Pound – US GDP data due out today market volatility expected for all majors
Credit rating agency Standard and Poors have knocked down Spains credit rating another two notches to BBB+. With Spanish unemployment nearing 25% and the economy looking in great danger of becoming Greece the part two….
Spain now appears that it may be the next weight piled on the European Central Bank’s shoulders in the coming weeks and months and as mentioned before this is a much bigger situation than we have had previously and will indeed make confidence in the Euro extremely low.
If you have Euros to sell then it may be prudent to look at all the options available to you fairly quickly, if you are in the process of selling your property overseas then a forward contract may be the right option, this is where you can lock into a rate of exchange for anything up to two years in advance for just a small deposit… The deposit can indeed be taken in another currency if you have no access to Euros at this time. Email me directly if you would like more details on this djw@currencies.co.uk
U.S GDP data today
Todaywill see the release of U.S GDP figures to round off what has been a reasonably volatile week on the currency market. This data release can lead to volatility for all major currencies with the U.S being a key indicator as to how the entire global recovery is going as a whole. Poor figures could lead investors to be a little more risk adverse which may lead the them pulling out of the riskier currencies such as the AUD, NZD and ZAR meaning that they weaken and are cheaper to buy. Should U.S figures be much
better than expected it may lead to investors being more prepared to take risk and these particular currencies may become much more expensive to buy. If you have a pending currency transaction to carry out then feel free to contact me directly as I can save you money by getting you a better exchange rate and save you time and hassle with a proactive and high level of customer service too. Email me today djw@currencies.co.uk
You can protect yourself from adverse market movements by
using such tools as a stop loss order or forward contract, contact us today on
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UK ‘Officially’ Back in Recession but GBP Still Posts Gains Against EUR & USD
Yesterday’s GDP figures indicated that the UK’s economy is not quite as far out of the woods as some senior officials would like us to believe. This figure came as somewhat of a surprise, considering in general UK economic data has been steadily improving since the start of the year. Following the release of these figures the EUR saw sharp gains against sterling, pushing levels back down through 1.22 and for a while it looked as if it may continue on, eroding the fantastic buying opportunities we have seen of late.
However, by late afternoon this spike had been erased and GBP had not only moved back through 1.22 but surpassed the levels of the previous day, reaching a peak of 1.2277. In my opinion this proves just how little faith investors currently have in the single currency and the well documented problems not only Spain but across most of the EU region, mean that any move back through 1.20 is unlikely in the short-term. We also need to remember this was only the initial figure and it is due to be revised twice over the coming months, so don’t be surprised if the ‘recession’ we have re-entered is short lived.
GBP/USD levels continue to hold firm above 1.60 and today even touched briefly on 1.62, before falling away during afternoon trading. The greenback is suffering from a string of positive data in the US, including a fall in unemployment figures and a faster growth rate than predicted. This would usually indicate strength for a countries currency but as I have written previously the USD is often used as a global barometer, meaning poor economic growth leaves investors running for the relative sanctuary of the Dollar. On the flip side an upturn in the global economy (often based on data released in the US) means investor’s appetite for risk increases and they move away from the safe but usually low yielding USD and will invest in riskier currencies such as the ZAR or NZD, which fluctuate more and therefore offer more chance of a higher yield. US GDP figures are released tomorrow at 12.30 and any variation from the 2.3% prediction could see movement for GBP/USD.
If you have an upcoming currency requirement and would like the opportunity to access award winning exchange rates then please feel free to contact me directly at mtv@currencies.co.uk or call me on 01494 787 478.
U.K in a recession – Well for now anyway.. Why is the Pound still strong?
We saw surprise figures out for the U.K yesterday that many analysts and indeed everyone who writes for me on this site were not expecting. With such a negative release just why has the Pound managed to continue its rally against the majority of majors?
The figures released yesterday do not include all of the data for the first quarter of 2012, and are due to be revised twice in the next two months and by the look of things we could quite easily see these figures revised back up again in these revisions, as the majority off the data already out is construction based and there is still an awful lot of more positive data to be included.
The Federal Reserve last night carried out their monthly interest rate decision and press conference following it and managed to weaken the Dollar once more which has led to over 5 month highs for those looking to buy Dollars or AED as this curreny is indeed pegged to the U.S Dollar.
Personally, I still feel (and I know I seem to always be positive) that the Pound will have a good year this year… We may not see rapid strength but I would not be surprised to see it continue to creep up against the majority of majors, maybe taking a slight knock along the way. By no means do I expect to see us reachj the dizzy heights of a few years ago yet as there is still a huge amount of work to be done.
If you have a pending currency transaction to carry out it may be prudent to get in contact with me directly, I have worked in the industry for years and carried out currency transactions for thousands of clients, saving them money over their bank and/or current broker whilst offering an extremely efficient and proactive service. If you wish to get in touch email me directly leaving a brief message and contact number on djw@currencies.co.uk or if you are a long way off needing help then feel free to join our mailing list by filling in the form on the top right hand corner of this site.
Sterling exchange rates fall as the UK officially heads back into recession.
Sterling exchange rates have fallen this morning following the release of Q1 UK GDP in which the UK economy has posted negative growth for two consecutive quarters officially bringing the UK into recession. This is the first time this has happened since 2009 and was a little surprising with early forecasts suggesting the UK would just scrape through into positive territory at 0.1%. Following the release the market reacted immediately with the pound losing 0.5% against most major currencies. But what now for the pound?
GBP/EUR
Following the positive showing from the pound yesterday with levels reaching a 20 month high at 1.2277 the market has quickly fallen below the 1.22 mark highlighting how quickly levels can fall away. Many clients that have waited for the market to continue to rise have had a nasty surprise this morning following the UK GDP data release. The difference in the space of less than 24 hours on a £200k transfer to Euros is €2,280 when compared to the high and low, indicating just how important it is to be in a position to strike should a spike occur, as more often than not they are short lived.
To be honest I am a little surprised at the data set this morning as recently the UK had been coming out with some much more positive data of late and I genuinely believed a positive figure would have been shown. Yes there is an argument that the political uncertainty in Europe with the ongoing French elections could hamper the Euro, however I do fear this could now be the start of a short term slide and we could easily see levels back towards 1.20 and beyond. Should you be looking to buy Euros in the short term and are worried the market might slip away then e mail Mike at mgv@currencies.co.uk to discuss your options. We have many clients utilising forward contracts and locking in on their exchange for a guaranteed delivery in the future. This contract enables you to lock in a price for up to two years in advance for a nominal deposit and thus avoiding the market uncertainty. Contact me today while the market is still above 1.21 should you wish to buy Euros.
GBP/USD
As with GBP/EUR, GDP data this morning has hampered the pounds recent surge against the greenback. Cable levels earlier this week hit a 6 month high at 1.6170 but has dipped below 1.61 this morning. This week continues to be a busy week for the dollar with the Federal Reserve releasing its latest interest rate decision this evening. Rates are expected to stay on hold at 0.25% and this is unlikely to drive the market too much, although watch out for the press conference held afterwards for any insight into future directions for monetary policy. More importantly from my point of view for anyone with an interest in the dollar, you should keep an eye on US GDP data on Friday. As with the the UK data today, this could have a major impact on short term moves for the dollar, expectations are for a fall month on month from 3% to 2.6% and any deviation from this is likely to cause volatility.
GBP/NZD
Sterling has posted some of strongest gains of late against the kiwi gaining over 10 cents or 6% since February, a difference of over NZD$24k ond a £200k transfer during this period. Again being a benefactor of riskier trades due to its higher interest rates, the kiwi could well benefit should economic confidence return to the market. Should the US post better than expected GDP data on Friday this could well lead to a surge into riskier currencies such as the NZD, ZAR and AUD through the use of a carry trade. This is where clients borrow in a low yielding currency such as the JPY or CHF and will purchase currencies offering much greater yields to benefit from the increased returns. This is a risky strategy and will often take place during more certain economic periods and with the US acting as a global barometer better growth figures may lead to an increase in demand for these trades and hence a boost in demand for the kiwi, of course the reverse could happen should the data be poor!!
Other data of note for the kiwi will be the Reserve Bank of New Zealand interest rate decision later this evening – expected to stay on hold at 2.5% but any comments from the central bank following this could cause volatility, keep an eye on the release at 10:00 BST.
Should you wish to discuss any of the points raised in this blog and to discuss the contracts options available to then please email me at mgv@currencies.co.uk or call on 01494 787478
U.K back into recession!!!
Just when it all looked a little too good to be true as always something came back to completely knock the Pound this morning. Sterling had been at a two and a half year high against a basket of major currencies until 09:30am this morning when we saw Gross Domestic Product figures come out at a much worse than expected -0.2%.
What does this mean?
This is not great news at all for the U.K economy, many economists thought we would see a slightly positive figure and it looked like this was priced into the market so we have seen the Pound drop away against all major currencies in early morning trading, great news for those selling a foreign currency and terrible news for those with the need to buy foreign currency.
The Pound has not taken as much of a hit as one would have expected even following this news so I don’t think it is all doom and gloom and many other economies globally are indeed in deeper waters than the U.K but it will hold back the Pound ever so
slightly in the near term.
If you have an upcoming transaction to carry out feel free to contact me directly and I will be happy to help you get the best rate and a fantastic level of service. djw@currencies.co.uk
Last Chance Saloon before UK GDP figures tomorrow… What will happen to the Pound ahead of the most important Sterling data release this year?
Here at PSF we have been highlighting one date for everyones diary buying or selling the pound. And that is the 25th April, tomorrow’s UK GDP figures. Since the start of the year when we found out that in the last quarter of 2011, the UK economy contracted, investors and traders have been waiting with interest the 25th April as it will determine whether or not the UK is in recession.
A recession is technically two quarters of negative growth. With tomorrow’s estimate for Q1 of 2012 estimated at 0.1%, there is very little room for error. If the figures are 0.1% out in either direction we are surely to see movement on the pound. I would expect a negative figure to lead to sterling losses as in my opinion the pound is trading strongly on an assumption the figures will be positive or as expected. Strong Retail Sales for March, improved PMI surveys and other data have all seem to indicate the UK will have narrowly avoided recession.
This decision could really go either way and is in my opinion the most important piece of data to affect the pound this year. If you are looking to buy or sell the pound soon, it is critical to be aware of the possible outcome and affects on the currency. Even though the decision is tomorrow, you could be talking to us in minutes by calling 01494 787 478 or emailing jmw@currencies.co.uk. Dealing with us is totally free and at no obligation. We can quickly explain all of your options so that you can then make an informed decision abvout what you want to do.
The pound is touching fresh highs against the CAD, the Aussie, the Kiwi, the Euro, the Dollar and the Rand. The data coming out worse than expected could really pull the rug from under the pound’s feet. If you are one of the tens of thousands of readers of our blogs and are interested to learn more about all of your options ahead of this event, please feel free to call us on 01494 787 478 or email me directly on jmw@currencies.co.uk
We have saved thousands of people thousands of pounds because we can not only offer information to assist with the actual timing of your exchange, but also provide an extremely sharp commercial rate of exchange. As specialist currency brokers we have years of experience dealing with a variety of private clients and businesses who need to move money internationally. We will always go that extra mile to win business for anyone who contacts us via this site, so why not find out for free if you could be getting a better deal? We actively undercut the banks and because we work for an independent broker choose where we buy from, meaning we can undercut other brokers too. Why not make a free quote request to me directly?
Important data Today
This morning we have Public Sector Net Borrowing at 09.30 which is expected to show government borrowing increased in March. Aside from some US housing data out at 13.30 the real news on the markets will be more fallout in Europe. To be kept up to date with how all of these important events pan out please feel free to get in touch on 01494 787 478 or email me directly jmw@currencies.co.uk
I look forward to hearing from you and assisting you with the best deal
Jonathan
Another fairly solid day for the Pound and we have a big week ahead! GBP forecast I predict a positive week following GDP data
This week is one of the busiest I have seen for some time! Releases include UK GDP (Gross Domestic Product), US GDP, the US Interest rate decision plus the Japanese rate decision and Australian Inflation data.
Personally I feel Wednesday will put U.K confidence higher with news that we have indeed avoided the dreaded ‘Double Dip’ recession for the time being at least it is however going to be a close call… Expectations from major analysts is that the U.K will have grown by 0.1% in the first quarter of 2012. Any higher than this and we could see a decent climb for the Pound, if it turns out that the economy shrank then the Pound could have a shaky few days ahead.
To technically be in a recession an economy needs to have two consecutive quarters of negative growth, and in the last quarter of 2011 indeed the U.K shrank. The figures on Wednesday are for the first quarter of this year and are extremely important for the value of the Pound. The good news is that data lately for the Pound has been fairly positive therefore I would not be surprised to see Wednesday leading to a little Sterling strength.
If you have an upcoming transfer to carry out be it buying or selling the Pound or any other major currency then feel free to email me directly djw@currencies.co.uk and I will endeavor to get you a better rate than your bank or broker of choice along with a first class rate of customer service.
