Monthly Archives: May 2012
Be aware there could be big news around the corner – U.S Dollar gathers pace and bond markets are stressed
I do not want to cause a panic but I am starting to get the feeling that we could have some major news coming out fairly soon.
The Dollar appears to be strengthening at an extremely rapid pace and is very jumpy. The last time I saw rates acting like this was in 2008 and we all know what happened then… Yes there is the argument that the Dollar is acting as such due to growing concerns over the Euro but also it just seems that there is a lot going on and a fairly consistent climb for the greenback against everything.
I’m not saying that we are definately due to see something major, but this is only my personal opinion and I just have a funny feeling about the path that currency rates have taken this week, you do tend to see a sell of at the end of a month which can present fairly big movements but i’m not sure this is all down to that.
One thing that is guaranteed is that we have a really rocky period ahead of us whatever you are looking to do.
If you have a currency transaction to carry out then you need to have a broker on your side, and an active one as well as rates are jumping around a lot without warning, so unless you are able to keep a close eye on rates all day every day then make sure you have assistance. I can help you with bank to bank transfers, we have numerous contract types available such as a limit order, stop loss and forward contracts. Feel free to contract me directly by emailing me djw@currencies.co.uk or calling me directly 01494 787 478 please ask for Daniel Wright.
Swiss Franc Forecast – CHF no longer the safe haven it was?
The Swiss Franc had benefited extremely well throughout the global economic crisis, however since the lows of 1.17 seen
against the Pound the tide appears to be slowly turning back.
Rates at present are roughly around 1.50 and it appears that the CHF is no longer as high in the rankings when it comes to investors choice of safe havens. I have also heard that the Swiss are now preparing exchange controls as they feel the Euro may collapse.
This could involve a number of options including the following:
- Banning the use of foreign
currency within the country - Banning locals from possessing
foreign currency - Restricting currency exchange
to government-approved exchangers - Fixed exchange rates
- Restrictions on the amount of
currency that may be imported or exported
Personally I feel we could see the Government raise the bar on the 1.20 artificial pegging against the Euro at the moment however this has already proved very difficult and quite costly for them to maintain. Either way, my personal opinion is to expect the Swiss Franc to weaken further in the near term, potentially being nearer to 1.60 by the end of June.
If you are currently working in Switzerland and being paid in CHF it may be worth considering the options available to you inclusive of a stop loss, limit order or forward contract to protect you from adverse market movements.
If you do have a requirement such as this then feel free to contact me directly djw@currencies.co.uk and I shall be more than happy to assist you.
Sterling back up into the 1.25′s against the Euro but down at a 4 month low against the USD as European woes continue to rock the markets
The pound has gathered momentum once more against the single currency spiking back up to 1.2541. The downside for the pound is that it has now reached a 4 month low against the USD weakening to a low of 1.5533.
The UK has had some positive data out this morning in connection with the UK’s money supply and mortgage approvals were up last month. The big news which is driving sterling though is events over in Spain. Spain’s borrowing costs have risen again and today the European commission stated that they think that bailing out ailing banks directly rather
than helping governments would be a better solution to helping Spanish banks.
The European commission has made their statement as fears over the health of Spanish banks have shaken the markets this week. The main gainer in all this mess is the safe haven of the USD. Investors seem to be fleeing to the safe havens as uncertainty continues to rock the global financial markets.
If you have Euros that you require exchanging to sterling or the USD or if you are a seller of the pound and need to by the USD, I personally feel that you should consider looking at doing your exchange either on spot or a forward contract to stop your current loss. I do not think that things will get a great deal better for you over the coming months so now may be a key time to look at your requirement and decide if you want to gamble or not.
Please feel free to contact me at bma@currencies.co.uk or call and ask for Ben Amrany from the number on the side of this page. I will be happy to discuss all the options that are available to you to help you maximise your conversion.
Will the US economy come to the World’s rescue? Important US & UK Data this and next week. Have you made provisions for the UK Bank holiday movements?
The US economy is the largest in the world and it is said that ‘When the US sneezes, the world catches a cold’, which is also true of periods when the US is faring well. Which it looks to be at present with growth figures European countries can only dream of and a falling Unemployment rate. My key releases this week would be Thursday’s US GDP data and Friday’s US Unemployment data. The US dollar is the most heavily transacted currency globally and it is fair to say USD movements affect just about every other currency around.
Focus of course remains on Greece and Europe (particularly Spain) but I doubt we will see too much movement until the Greek elections next month. The Eurozone crisis is clearly posing a massive risk to the global economy which is why the US data out this Friday is key to highlighting to what extent America can ‘pick up the tab’ on the global economy, compensating for the shortcomings of Europe.
Anyone considering any currency transactions should therefore be well aware of data at the end of this week. The US dollar one way or another effects almost every other currency out there so Thursday’s GDP and Friday’s Non-Farm and Unemployment data are well worth being aware of whatever your particular interests. Investors have recently been overlooking the fact US interest rates will be on hold for at least 2 ½ years, instead taking a view to utilise safe haven positions on the Greenback. There is some room to see the dollar strengthen further against the Euro and the pound due to this, but if considering either of these trades I would be tempted to take advantage of recent movements, (perhaps utilising a Stop), particularly EURUSD, now at a 22 month low.
The cost of the recent US domestic economic improvements is trillions in Quantitative Easing, ballooning debts and interest rates at an exceptionally low 0.25%, with no sign of change until late 2014. Should data disappoint this week funds could move either in or out of the USD as risk sentiments shift. Whatever your particular currency interests this is well worth being aware of, particularly ahead of a 4 day break for FCD plc and UK based clients.
Pound Sterling News and Upcoming Data
I still feel the pound is very precariously balanced at the moment and indeed some of the better rates for selling the pound have since fallen from the close to 3 year highs we had for sterling on a trade weighted basis. Friday 1st June we have UK PMI for Manufacturing which is predicted to show a small contraction in recent manufacturing activity thereby underlining the general slump in the state of the UK economy. As soon as we are back next Wednesday 6th and Thursday 7th we have the Construction and Services PMI data too which could create some movement on sterling. Is it time for the state of the economy in the UK to be more accurately reflected on rates? Thursday too we have the UK Interest Rate Decision which nearly always throws up some opportunities with up to half cent spikes one way or the other ahead of and post the decision.
UK BANK HOLIDAYS
The 4th and 5th of June are UK Bank holidays and as such need to be aware of if considering any currency exchanges. Not only will this put extra duration on transfer windows for Invoice payments, property completions etc, it is also a time in
which we could see movement on the markets for those perched ready to trade at the right level. It is unusual to see any major movements when financial markets are closed but with the political nature of the Eurozone crisis now clear, it is possible we could see out of hour’s statements and is worth considering. Don’t forget our contract options below, all of which I will be happy to discuss how we can tailor to suit you.
Spot - We trade on the ‘spot’. Settlement is due within a few working days and the money can be sent immediately.
Forward - We book todays rates forward for up to two years. A small deposit is required. This guarantees your rate for the duration and means you do not get caught out if the market moves against you. Very popular for property and commercial transactions.
Limit – You choose a higher level you would like to trade at and we enter an automatic order which we trade at once achieved. Guarantees you get your desired rate.
Stop – The same as a Limit but you choose a lower level you would not like to get worse than. Can be used in conjunction with a Limit and you can move them around or cancel them as long as they have not filled.
As always if you are actually planning anything in the coming weeks or months why not make us aware so we can provide a more detailed forecast and keep you informed of important events surrounding your trade. If you have any questions over the service, the content of these posts (there is no such thing as a stupid question!) or how it all works then
please let me know.
Jonathan Watson jmw@currencies.co.uk
00 44 1494 787 478
1.25 on GBP/EUR as Potential Greek exit Leaves Markets Anxious
Monday has seen GBP/EUR move back through 1.25, as the uncertainty surrounding the possibility of a Greek exit from the EU weighs heavily on investor’s minds. The markets did seem to be waiting for the Greek elections, before the next decisive move was made but with Europe’s woes continuing and seemingly unrelenting, the single currency may struggle to make up much ground in the short-term.
The negativity surrounding Europe is continuing to increase and for the first time publically, a major market segment has admitted putting contingency plans in place for the break-up of the euro. The chief executive of global insurance market Lloyds of London, has expressed his concerns and said they are now ‘preparing for that eventuality’ and would settle claims using multiple currencies.
This news is hardly likely to fill investors with confidence and at time of writing GBP/EUR had settled above 1.25, a level many analysts felt would provide resistance in the build-up to the Greek parliamentary elections in June. Personally, I feel a move towards 1.26 in the coming days is a possibility, as the uncertainty surrounding Greece continues to weigh heavily on the region.
If Greece were to exit the euro the results could initially be catastrophic for their economy and for the short-term fate of the single currency. The uncertainty that is surrounding the markets now will only increase and we could see euro weakness as investors run for cover. Personally I feel EU leaders will do everything in their power to keep Greece from defaulting, as it would set a dangerous president and the risk of contagion throughout the rest of Europe could be devastating.
If you would like to be kept up to date with all the latest market movements or have an upcoming currency requirement you would like to discuss, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
Greek elections will be the talking point for the coming week or so… and it is indeed tight! GBP USD AUD EUR NZD ZAR
Those with an upcoming currency interest may wish to keep a close eye on polls leading up to the elections, over the weekend it appears that the New Democracy party is just edging things as it stands, however I expect to see this shift numerous times in the lead up to the elections and I expect the markets to be very jittery in the next few weeks as well.
Whenever the Anti Austrerity party sticks their neck in front I would not be surprised to see the riskier currencies such as the AUD, NZD and ZAR become a little cheaper to buy and I would imagine the Dollar should strengthen too as it tends to when there are global concerns and slowing attitude to risk.
Should the New Democracy party look like they may potentially win then we may see quite the opposite, along with a little strength for the Euro.
Personally, if you have transfers to carry out I don’t feel this is a market to mess around with unless you are a serious gambler as absolutely anything can happen… Friday nights tend to be the big negative release time for Europe and you could have a weekend spoilt very easily should you be looking to sell Euros and another Spanish bank announcement comes in while the markets are closed and there is nothing you can do about it.
Regarding the Australian Dollar – The RBA Governor Stevens has mentioned overnight that we will more than likely see further rate cuts and that the Chinese slowdown is concern, however the rate cuts appear to already be priced in and it will take a while for China to really start to affect the AUD too badly. Feel free to take a look at one of our sister sites www.australiandollarforecast.com if you have a keen interest in the AUD as this is regularly updated purely with a focus on the Australian Dollar.
If you have a transfer to make and want to get the very best level of exchange (potentially saving £1000s) then feel free to contact me directly by emailing me djw@currencies.co.uk and I will not only assist you in rates but also with a very high level of customer service too, if you already use a broker then why not take 2 minutes to get a comparison just to ensure you really are getting the best deal.
This Morning’s GDP figures could weigh heavily on the pound over the next few weeks. If you need to buy USD, EUR, CHF, CAD, AUD, NZD & ZAR you may want to look at your options as we are still at some excellent trading levels.
Good morning readers,
The trading floor has gone extremely busy this morning with a surprise dip in UK GDP figures. Data has shown that the UK economy shrank by 0.3% in the first three months of
the year, more than previously thought. Last month’s initial estimate from the Office for National Statistics showed a contraction of 0.2%. The first quarter’s growth figure will be revised again next month.
Most analysts were not expecting to see a revision down so this is fairly worrying for those of you that require selling the pound. Although the markets have not yet really reacted this will weigh heavily on the pound going forward.
The pound lost up to half a cent against the Euro bottoming out at 1.2457 and the pound is significantly down over the last 2 weeks against the USD and we just hit a low of 1.5637 earlier. With no real solutions to have come out of the EU summit last night sterling will be under pressure over the next week and this could leave real scope for the Bank of England to look at further monetary easing at the beginning of June. This would more than likely do more harm than good to sterling.
If you are buying USD, EUR, CHF, CAD, AUD, NZD & ZAR I would seriously look at your options of securing your currency before the next Bank of England meeting at the beginning of June. With some fantastic trading levels against these currencies you may be prudent at securing your funds on a forward contract or if you do want to take a gamble at least place a limit in the market.
If you are selling Euros unfortunately I do not think this news will bring the pound back down to 1.20 as the issues in Europe are outweighing those in the UK. I feel that all you can do is try to exchange your funds when there is a brief spike in the market. A lot of my clients were able to do this when the pound recently fell down to 1.2350 as we were able to inform them of this small window of opportunity.
If you would like more information on any of the above contract types please feel free to email me with your requirement and a contact number so I can call you to discuss your options going forward. bma@currencies.co.uk If you would like to call me there is a number on the side of this page that will bring you through to the trading floor. Just ask for Ben Amrany
Ben Amrany
Sterling down at a 2 month low against the USD after UK data releases
There have been two data releases out this morning for the UK. The eagerly awaited Bank of England minutes showed that only one member of the MPC voted for further monetary easing (QE). We have also had a release of the UK retail sales. They did not show as much growth as was hoped. Sterling is dropping on the back of this as it may lead to the Bank of England instigating more QE over the coming months.
With events in Europe still not resolved I feel sterling will remain under pressure. We must remember that 40% of our exports are to Europe and if they are struggling this will have a knock on effect for the UK economy and the pound.
This morning we have seen sterling exchange rates weaken and it has brought the pound down to a 2 month low against the USD at 1.5675. The USD has been benefiting from events in Europe as investors have been fleeing the riskier currencies and turning to the safe havens. I said a couple of posts ago that I felt sterling will be trading down at around 1.56 by the end of this week and we are there about at the moment.
If you are considering buying the USD in the near term and are hoping that the pound will go back to 1.60 it seems very unlikely at the moment. Be cautious as in times of uncertainty like at present the USD normally strengthens significantly. If you need Dollars over the next few weeks or months and want to minimise your risk you can always book out the funds on a forward contract. You do not pay for the Dollars upfront so if you don’t have full funds available this is a really good way of minimising your risk. Email me at bma@currencies.co.uk for more information.
Are you holding Euros or any other currency and are concerned about the current direction of Eurozone events?
Are you holding Euros or any other currency and are concerned
about the current direction of Eurozone events?
With Greece looking likely to have to leave the Euro we have a range of
options to help safeguard anyone with funds in Europe. It may be of interest to
utilise a forward contract or our Segregated Euro holding account so the funds
are easily accessible if you need to move quickly. Whether in Greece or not
please speak to me to find out more about all of your options in these current
circumstances, even if you do not need to exchange soon. Being aware of all
your options at an early stage may well save you money in the long run.
As always if planning any currency exchanges we are a firm of specialist currency brokers who can assist with not only the very best exchange rates, but also
assistance with the actual mechanics, planning and strategy for your currency transfers.
CONTRACT OPTIONS – As well as
providing all the information you need and the very best exchange rates, we
also have a range of contract options that can help limit your currency
exposure.
Spot - We trade on the ‘spot’. Settlement is due with a
few working days and the money can be sent immediately.
Forward - We book todays rates forward
for up to two years. A small deposit is required. This guarantees your rate for
the duration and means you do not get caught out if the market moves against
you. Very popular for property and commercial transactions.
Limit – You choose a higher level
you would like to trade at and we enter an automatic order which we trade at
once achieved. Guarantees you get your desired rate.
Stop – The same as a Limit but you
choose a lower level you would not like to get worse than. Can be used in
conjunction with a Limit and you can move them around or cancel them as long as
they have not filled.
If
you would like to find out more about other currency rates and all of your
options, please feel free to get in touch directly…
(+44) 1494 787 478
Markets are awaiting key UK economic data which could be key for how the pound performs over the rest of the month.
Trading was fairly flat for the pound yesterday on a day of very little economic data to note. The markets may have still been taking in the news of the G8 summit where the leaders tried to show a united front over Greece by pledging to keep it in the Eurozone.
However David Cameron came out yesterday and stated that the forthcoming elections in Greece would, in effect, be a referendum on the euro and said failure to provide
clarity, could prove disastrous for the world economy.
If you are a seller of Sterling and need to purchase any major currency, Cameron’s words could be disastrous for your plans. As the UK has so many ties with Europe, a failure for
politicians and central banks to come up with a resolution could be extremely harmful to the pound going forward over the course of this year.
At present the pound has been trading at some of the best levels for months against the southern hemisphere currencies, Scandinavian currencies and even the Canadian Dollar, Israeli Shekel, Indian Rupee and Thai Bhat. This week however there is a raft of economic data that could hinder the pound, so be cautious as the gains may not continue.
Quantitative Easing Fears Persist
Over the course of this week there is a lot of data to come out that could have a big effect on sterling. Today seems to be the busiest day where we have no fewer than 5 different data releases that span from House prices and mortgage approvals to inflation figures. Tomorrow we have the eagerly awaited Bank of England minutes and on Thursday the revised GDP figures for Q1 will be released along with retail figures.
The markets will be watching these releases very closely as they will give us clues to whether the Bank of England (BoE) policymakers opt for further rounds of monetary stimulus (QE) to boost growth. I feel that if we see a dip in Inflation and retail figures the pound will weaken because the markets will believe that the BoE may look at boosting the economy through QE at the next meeting in June.
Recently sterling’s gains have been partly down to all members of the BoE voting against QE. Last week though Adam Posen a member of the BoE stated that he felt he was too quick in dropping his call for extra stimulus. So should the minutes show that Posen and any of his colleagues voted for QE we could see a weakening in sterling against a range of currencies.
If this happens I would not be surprised to see the pound down at around 1.55/1.56 against the USD while levelling out against the Euro in the near term between 1.22/1.23.
If you have an upcoming currency conversion to make please feel free to conatct me at bma@currencies.co.uk with your requirements going forward and I can talk you through the options that are available to you. If you wish you are more than welcome to call me directly from the number on the side of this page. Just ask for Ben Amrany and we can have an informal chat about the market and how we may be able to minimise your risk to currency fluctuations.
Ben Amrany
