Monthly Archives: August 2012
Why September is a Key month for the Euro!
September promises to be a very busy month with a number of important decisions due on the Euro. For the time being the boat may have sailed on the better Euro rates of the last few weeks, but this could easily change.
Following the Jackson Hole Summit the case for further QE in the US remains, but it is unlikely we will see any too soon. The global economy continues to be pulled from pillar to post with no real clear direction or trend being established.
And the Aussie, Kiwi, Rand and Canadian Dollar continue to suffer presenting some excellent buying opportunities.
Next week a few things to lookout for are:
Purchasing Managers Index Surveys. These surveys reflect business sentiment and provide an early indication on how an economy is performing. These are likely to affect the short term movements on a wide range of currencies. On Monday we have PMI for China which could affect the commodity based currencies AUD, NZD, CAD and ZAR. We also have PMI from across the Eurozone, all in all plenty to start the week off!
On Tuesday there is UK PMI for Construction, plus Swiss GDP data. In the afternoon we have a range of US PMI data, which will provide further indication as to US QE decisions.
Early Wednesday we have Australian GDP data, then the Bank of Canada Interest Rate decision (plus more UK PMI, for the Services sector).
And Thursday the Australian Interest Rate decision, the Bank of England Interest Rate decision as well as the European Central Bank decision.
And if you haven’t seen your movement by then on Friday there is various Manufacturing and Industrial Production data for the UK, plus US Unemployment data in the US. There is also a preliminary UK GDP estimate Friday too.
GBPEUR Focus September could be MAKE or BREAK for the Euro
Last week saw further losses on GBPEUR as the edge of the excellent levels passed. PMI Surveys this week could well shape the short term movements although the key events to beware of are as follows:
This Thursday – ECB Rate Decision and Press Conference. Will Mario and co finally shed some light on their plans to ‘save’ the Euro? August saw a wave of calm sweep over the Euro, is it misplaced?
September 12th – Dutch Elections and German Court Ruling on legality of use of taxpayer funds for bailout funds.
The IMF (International Monetary Fund), ECB and EU Council will also be visiting Greece and Cyprus to discuss ways forward.
The outcome of these meetings and events could well shape the trend on the Euro and this will affect attitudes to risk on other currencies. To be kept up to speed on the latest developments on your rate please speak to me Jonathan on jmw@currencies.co.uk or call 01494 787 478.
GBPEUR is currently at a one month low although I am sure this week we will see it break out of the ranges it seemed trapped in last week.
Don’t get caught out! Rates can move quickly for a variety of reasons. Our specialist service is designed to make you aware of everything important surrounding your trades so you do not miss out.
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Pound Sterling Information – A good end to the week for GBP? What may the Jackson Hole summit bring?
The pound has had a mixed week again, gaining ground against the Dollar and the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand yet finding it tough against the hard to knock down Euro.
With the once again increasing speculation of a fully blown Spanish bailout due to numerous areas within Spain needing assistance of late I would have thought the Euro would have experienced a tough week yet we have seen quite the opposite – Personally I feel there is no smoke without fire and there is an awful lot of smoke over Europe at present so there is certainly a storm brewing in my opinion and we could see problems come to light on a much larger scale than we have seen before in these next few weeks and months.
We also have the Jackson Hole meeting over the weekend which may throw up absolutely anything, it is a meeting of Central bankers, policy experts and academics and may lead to a movement from Central banks at some point in the future putting new measures in place together in an attempt to assist the markets in this global crisis. This kind of activity could lead to huge volatility so please be aware if you have a pending currency transaction to carry out you need to have a proactive and efficient currency broker on your side assisting you all the way.
For a free, no obligation full discussion of your options and more detailed forecast relevant to your particular situation feel free to email me directly on djw@currencies.co.uk
It is always worth a second opinion and I have never had any trouble getting my clients the very best rate and I offer an extremely efficient service.
Pound Euro – Spanish news
Over the last week pound exchange rates have remained fairly flat with little movement however this changed yesterday when the Euro gained nearly a cent. This created the best time to sell Euros in nearly 2 months, trading at the high compared to the low yesterday would have made you over £500 more for every €100,000 sold back. This market movement was down to a sudden demand for Euros by city traders and again shows how quickly you need to be to take advantage. If you need to complete an exchange and would like to trade at the best price, register your interest via email hse@currencies.co.uk
Over the next week I agree with most specialists that Spain will become the main story;
- Their Stock markets are at a near 20 year low,
- Unemployment is at a record high
- Their banking system is failing
- Data showed yesterday their economy shrunk by 1.3% in the second quarter of 2012
- €72 billion was taken out of Spainish banks last month
It does not paint a great picture especially after the country’s most economically important region, Catalona, said it needed a €5 billion rescue package from Madrid. Even the Spanish deputy Financial Minister said that “the worst is yet to come.”
The Bank of Spain estimates it may have up to €180 billion in bad debt which many think may be more than can be raised. As a result I would expect GBPEUR to have a range of 3 cents from current levels over the next few weeks in either direction.
Please don’t just assume it will push GBPEUR up as we are unsure whether the UK will have to contribute to the bailout.
If you are exchanging currency contact us today and we can pro-actively help you try and catch your target rate. Either email me at hse@currencies.co.uk or contact me Steve Eakins on the normal number. Simply put if we could not help save you money we would not be in buisness so what have you got to lose? If you have a curerncy requirement please feel free to make contact.
Global Decisions and Impact on the Pound – Pound Sterling Forecast – A quiet week on the markets?
The strength and weakness of the pound is mainly attributable to the performance of the economy in the UK. By and large when there are positive economic sentiments, the pound will gain and when the tone falls, the pound too suffers.
The pound also draws strength from the fact the UK is a safe haven. Investors have confidence in investing in the UK because of the certainty and confidence presented to the markets by a strong government. Whilst the UK has taken a hit in recent years, London is still a financial centre and the UK with its strong international political influence is regarded as a safe place to keep money. The lack of volatility increases investors confidence in the UK and hence the pound.
The economy in the UK is heavily reliant on exports for its growth and trade, yet it remains a net importer. Which basically means we import more than we export and hence there is a cost to our economy for doing so. What is interesting is that whilst UK exports to Europe have dropped, so too have UK imports from Europe. Nevertheless there remains a deficit which is growing. From May 2012 to Ausgut 2012, the size of difference between imports and exports grew 24.4%. Compared to June 2011 it has grown 54.4%, which is a very worrying sign. Not only is the UK buying less from Europe, Europe is buying less from the UK. And to a greater extent.
Trade outside the EU is slightly harder to evaluate since there are so many more variables (a wider range of countries to distort data), but it paints a similar picture. Which is that the UK is a net importer. This does not bode well for the pound in the future as ideally we want the UK’s own businesses to grow and flourish rather than rely on overseas countries for our goods and services.
International Politics and Economic policies can also have an impact on sterling exchange rates. When buying or selling a foreign currency, an awareness of all the issues surrounding that currency are useful to know in order to get the best exchange rate. Ongoing events in Europe are having a big impact on the pound as the international response to Europe is affecting cash flows and trade with the UK. The UK’s main exports will only flourish when there is stronger international demand for those goods and services.
It looks like Europe is about to enter a recession and we have already had many talks of Chinese and Japanese slowdowns. This is bad news for the pound because a reduced lack of demand from these countries will affect Europe, and the UK will in turn be affected since we rely on Europe for 40% of our international trade.
There are ongoing meetings amongst Eurozone leaders and this Friday the Federal Reserve Chairman Ben Bernanke will meet other members of the Federal Reserve Bank to discuss economic policy, namely the extension of more QE in the US. The outcome of these meetings will have an effect on global confidence which will affect inflows into the pound. The outcome of these decisions will have a big effect on the most traded currency pair EURUSD and the cash flows in and out of these currencies will affect GBPEUR and GBPUSD.
Attitudes to risk will also be shaped by the outcomes of these meetings and currencies like the Aussie, Kiwi and Canadian Dollar will also be affected.
So whilst it is a quiet week on the economic data front, we could yet see much more movement on all exchange rates. For a full risk overview of all of the events affecting your currency transfers, plus a commercial exchange rate, please feel free to contact the author Jonathan Watson on jmw@currencies.co.uk or call 01494 787 478 asking to speak to Jonathan.
Pound Sterling Forecast – 24.08.12 – How to get the best sterling exchange rates
UK GDP Figures just released showed the Economy shrank less than expected. The revision upward from -0.7 to -0.5% was not wholly unexpected and despite being an improvement is nothing to get too excited about.
I expect the pound will continue to struggle against most currencies and anyone holding out for major improvements in the short term should brace themselves for further losses. The best options for managing currency risk will be different for each situation as each client will have their own specific requirements and limitations with which they have to work to. For a full discussion of what you should be thinking of and how to approach your particular exchange, please contact me Jonathan Watson on 01494 787 478 or jmw@currencies.co.uk
GBPEUR – 2 week LOW GBPUSD – 3 month HIGH GBPAUD – 1 month HIGH GBPCAD – 1 month HIGH
GBPNZD – 5 week HIGH GBPZAR – nr 1 Year HIGH EURUSD – 7 week LOW
GBPEUR
The Euro has clearly found some favour in recent weeks as US QE expectations weigh on EURUSD, optimism weighs on a Spanish bailout and Greece appears to be offered more time. A fall in borrowing costs of Italy and Spain too has helped ease the pressure of the last few weeks. 1.30 for the time being looks out of the questions and anyone holding out for this would do well to remember we were at 1.1978 at the turn of the year and the highest the rate has been is 1.2880, and that was over a month ago.
The recent change in mood surrounding the Euro may well turn out to be misplaced down the line, but for the time being faith has returned for the Euro and the pound, which is still in a recession looks unable to capitalise.
GBPUSD
As I have been expecting GBPUSD continues to ebb higher and we are currently at a 3 month high. I would not rule out the 1.60 rate in the coming weeks and months particularly if there is more QE in the US. QE is however not quite the dirty word it once was on both sides of the Atlantic and consequently the market may have already priced this in. Any further gains on this pair may be hampered by the general poor state of the pound.
GBPAUD, GBPCAD, GBPNZD, GBPZAR
A surprise fall in Japanese Imports and Chinese warnings over their economic growth caused a wobble on the Aussie proving it is not immune to the general slowdown engulfing the rest of the world.
This has had a knock on effect on the Kiwi, Cad and Rand, presenting some excellent buying opportunities (see above).
For a free, no obligation full discussion of your options and more detailed forecast please speak to me directly on jmw@currencies.co.uk
It is always worth a second opinion and I have never had any trouble getting my clients the very best rate.
Thank you,
Jonathan
Euro gains and an increase in risk appetite. GBP/EUR, GBP/USD, GBP/ZAR, GBP/AUD forecast
Support within Europe and speculation that Mario Draghi (head of the ECB) will continue with the central banks policy of bond buying, came amidst warnings from the Bundesbank that a continuation of this programme may cause “considerable risks to stability”. This will make the next ECB meeting very interesting as many analysts are expecting something strong from Mario Draghi (head of the ECB) following his statement that he would do ‘whatever it takes’ to secure the Euro. However support still seems to be in favour of the Euro, with short term borrowing costs for Spanish bonds falling from 4.24% in July to 3.33% in August, a positive sign for the Euro zone.
Most analysts expect something strong to come from the next ECB meeting scheduled for the 1st week of September, and this speculation has buoyed the Euro. Yesterday the Euro gained nearly 0.6% against the the pound (pounds losses were also compounded by poor public borrowing figures yesterday morning). However the support for the Euro may have hindered the pounds recent strength against the Euro, but has helped sterling post some strong gains against the us dollar – in fact levels yesterday peaked at a 2 month high, is it time to take advantage? Personally I think this trend may continue. This is mainly due to risk sentiment. Following the support from the ECB risk sentiment appears to have increased and this has resulted in a move away from the ‘safety’ of the US dollar and a drive towards riskier currencies including the pound, and I would see a move towards 1.58 for GBP/USD today.
Other currencies that are likely to benefit from this will be currencies such as the AUD, NZD and ZAR. These three offer far greater returns than the majority of major currencies and hence are often in high demand when risk sentiment increases and should support continue from the ECB, then I would expect to see a drive in favour of these currencies. However be wary should you have an interest in GBP/AUD, NZD or ZAR as the spikes can be fairly dramatic, and should you see profit taking often the moves can be reversed in a matter of minutes. For this reason those that are in a position to ‘strike while the iron is hot’ will often find themselves in a far better position than those not, as more is lost in indecision than a poor decision.
As a specialist currency broker at currencies.co.uk I have access to live commercial rates of exchange to help clients maximise their exchange. Through using a broker clients can save thousands when compared to the high street banks, something that has helped us develop into one of the largest independent brokers in the UK. I personally manage and assist a number of clients every day, and through taking a pro-active look at the market and keeping clients up to date on the market conditions this often helps individuals time their exchange to maximise their currency. It is impossible to always get it right but through years of market knowledge and an understanding of the market we hope this can be used to save you on your currency requirement. To discuss the service in more details and to run through the multiple contracts we can offer then please email Mike at mgv@currencies.co.uk or call 01494 787478 and ask for Mike.
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Good morning all, once again today will be key for exchange rates with Greece being in the headlines today.
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Sterling gains against the Dollar, Flat against the AUD and NZD and also loses against the Euro
The Pound has had a mixed day today gaining ground against the U.S Dollar yet losing against currencies such as the Euro and South African Rand. Rates have remained reasonably flat against the Australian Dollar and New Zealand Dollar which are usually fairly volatile currencies.
We saw that Deutsche Bank expect Australia to fall into recession in 2013 which may mean that it is coming to crunch time for those of you holding out that still have Australian Dollars to sell. here is a link with that story: http://online.wsj.com/article/SB10000872396390443855804577602552781925554.html
Head of the European Central Bank Mario Draghi has backed bond buying plans by the European Central bank which has led to a little Euro strength over the day and also is more than likely why we have seen the Pound gain ground against the U.S Dollar as investors have probably gained back a little confidence in the markets following these comments, pulled out of their ‘safer haven’ investments such as the USD and put them into riskier investments such as the South African Rand.
A decrease in demand for the Dollar following this of course then weakens the currency which may be why we have seen such shifts in trading today.
Tomorrow the most important release on the markets is in the form of the FOMC minutes over in the States, basically the minutes from the last Federal Reserve Interest Rate decision which may involve the discussions around QE3 (Quantitative Easing) and could lead to some overnight volatility depending on what has been discussed.
QE is generally seen as negative for the currency concerned however this has been fairly common knowledge that we may see QE3 at some point in the future so mentions of it being put back may actually strenghen the Dollar.
The most important release for the U.K this week is GDP or Gross Domestic Product figures out for the U.K on Friday, expectation is to see a revised figure to be slightly better for the U.K which may give the Pound a slight boost at the end of the week so if you have a foreign currency you are looking to sell then tomorrow and Thursday may be your opportunity.
For a free analysis of your position and what may move your rate of exchange in the coming weeks and months please feel free to speak with me Daniel Wright directly on 01494 787 478 or you can email me on djw@currencies.co.uk I welcome private and corporate clients of any size so do feel free to contact me today.
The slightest change in exchange rates can make quite a difference to the cost of an overseas property or the amount you will get back from the sale of one, get in touch with me today if you are in a position regarding overseas property and I shall be more than happy to assist you.
Pound Sterling Forecast – Will the UK cut interest rates? What will the pound do next? GBPEUR, GBPUSD, GBPAUD, GBPNZD Forecast
Well as I predicetd earlier this week the pound did find some support following indications that all was not quite as bad as expected for the UK. The lack of any support for further QE or an interest rate cut kept the pound bouyant on Wednesday and yesterday’s Retail Sales were strong enough to provide the pound with a lift against most currencies.
To cut or not to cut?
I do not expect an interest rate cut for the UK. Mervyn King made clear he felt it would do more harm than good to the UK economy to cut rates and the Bank of England Monetary Policy Committee confirmed no members had voted for a rate cut. Ever since Christine Lagarde, Managing Director of the IMF (International Monetary Fund) suggested a rate cut, there has been more speculation of this occurring. Particularly with the UK entering the dreaded double dip and the prospect of things deteriorating further in the future. For the time being there appears to be no danger of this hurting the value of sterling, although more QE does look likely.
Zig Zag Economy
The pound and the economy is continuing to zig zag proving a real headache for policymakers and forecasters, as well as anyone needing to buy or sell the currency. Let us look at some of the more favoured pairs and see what we can expect in the future:
GBPEUR – ‘Still at close to a 4 year high’ – This is easily forgotten and should not be overlooked. As the saying goes a bird in the hand is worth two in the bush. Whilst it is tempting to hold out for further improvement on the exchange rate to the recent highs or even 1.30, there is a danger you could miss out on what are absolutely fantastic rates that if available only a few months ago would have been snapped up in seconds.
I personally cannot see a break for the 1.30 mark anytime soon. The German Constitutional Court rules next month on the legality of using taxpayer money for European bailout funds. This is an important challenge and until this is resolved there are a number of issues on which we will have to wait. Because of this I cannot see any room for immediate Euro weakness, but indeed there is little room for it to strengthen significantly out of the current range. If you are considering any GBPEUR or EURGBP currency transfers (including bringing Euros from overseas from say a property sale), we can help you with a safe, secure method of transferring your currency at a commercial exchange rate. If you have such a requirement please feel free to call me Jonathan on 01494 787 478 or email jmw@currencies.co.uk
GBPUSD – With all of the current indicators leaning towards more Quantitative Easing it looks like the dollar will lean closer towards 1.60. One of the biggest drivers on USD rates are attitudes to risk. When there is fear over the global economic outlook, the Dollar can gain in value as investors put their money somewhere reliable and unlikely to fluctuate too much. Consequently when fears subside, investors are confident to invest in other areas and the dollar weakens. Lately sentiments have improved as we start to feel that something will be done for Europe. As implied above we are unlikely to see any headline grabbing announcements that will affect confidence relating to the Euro until Germany makes a decision next month. This event could be the trigger for a break out of the current ranges, but with more QE expected as early as the start of September, there are many other triggers that could move GBPUSD.
GBPAUD – Expectations the Aussie would break the all time high against sterling have not been met and the rate has actually danced with the 1.50 mark as the pound found some favour this week. More talk over wobbles in China helped compound losses on the Aussie too. Nevetheless I think the currency has everything going for it and can only get stronger against sterling. If looking to buy this currency I would be very tempted to move currently as it may soon return to the levels of last week.
GBPNZD – The Kiwi has suffered some losses too presenting a good buy opportunity. I do not foresee the rate improving much since the underlying factors keeping the Kiwi strong remain. That is a fairly bouyant economy benefitting from Chinese and Australian demand, as well as having a much higher interest rate than most other currencies, which again keeps up investor demand. If I was buying the Kiwi or thinking about it in the future I would be worries the Kwiw would strengthen and perhaps the pound would fall too.
Making currency forecasts and providing unbeatable exchange rates is what we do! Every day myself and the other bloggers here are asked by our clients what to expect for the future. We then assist as required with a commercial rate when they want to exchange, simple! Even if you don’t need to move for some time, making careful enquiries now could well save yourself money in the long run.
I have never been beaten on an exchange rate and encourage you to make a comparison between us and whoever you currently use to see just how much you can save. Please contact me, Jonathan Watson via email jmw@currencies.co.uk or phone on 01494 787 478.
I look forward to hearing from you and assisting you with the very best deal.
Thank you,
Jonathan
Pound Sterling has had a fairly solid day on the markets so far – Strength against USD, EUR, AUD, NZD, CHF, ZAR, CAD, PLN and most majors following better than expected retail sales figures
Sterling has seen a fairly good day on the markets today following slightly better than expected Retail Sales figures for the U.K earlier on this morning and a potential carry on from slighlty positive news from the Bank of England minutes released yesterday morning.
The Bank of England minutes essentially said that no discussion was made about a potential rate cut for the U.K at present (a rate cut generally weakens a currency as it makes it less attractive to investors) and on top of this the minutes also mentioned that further Quantitative Easing was voted against by 9-0 by the members of the monetary policy commitee as well. Even the mere mention of QE over the past few years has tended to weaken the Pound so the fact that both this may be off the cards for a while now and that an interest rate cut also appears to be quite a way away has been seen as very positive for Sterling.
I feel now after reading through the data released yesterday and indeed this morning that there is a good chance that the Pound may have a good period. A few data releases have been fairly positive and we are due to enter the month of September which will bring us all of the economic data releases from August (where the majority of the Olympics took place) and personally I feel figures should have picked up over that time frame.
Unfortunately neither I or anyone else can guarantee their economic predictions. What we can do is make clear to anyone who needs to make a trade what their options are and what they should be aware of that can move their rate. We are able to offer rates that can beat banks by as much as 4% and I for one have never been beaten on a price by a bank or a currency broker so it is well worth you getting in touch if you find this site of use.
For a free analysis of your position and what may move your rate of exchange please feel free to speak with me Daniel Wright directly on 01494 787 478 or email djw@currencies.co.uk I welcome private and corporate clients of any size so do feel free to contact me today.
