Monthly Archives: October 2016

Sterling is on track for its worst month since June, will the decline continue? (Joseph Wright)

Despite a relatively bullish day for the Pound, particularly by its own recent standards, the currency is on track for it’s weakest month since the month of the Brexit vote back in June.

The reason behind today’s bullish Pound is a meeting between the Governor of the Bank of England, Mark Carney has had a meeting with Theresa May (UK Prime Minister) regarding his future, and the general feel around it so far is positive as just prior to their meetup, May announced that the Governor has her full support.

There were rumours in the city last week that Carney would shortly be announcing his planned departure in 2018 but as it stands that doesn’t seem to be the case. I think that if he decides to extend his stay until 2021 and complete a full 8-year term we could see the Pound spike upward once again but certainly not back up to the levels we saw at the beginning of October.

This uncertainty surrounding the key figure of the Bank of England has not come at a good time for the Pound’s value, after we’ve already seen the currency lose almost another 5% through October after Theresa May outlined the end of March as the time to invoke Article 50.

This week is set to be a busy one in terms of economic news releases, with Thursday expected to be the busiest day for Sterling exchange rates as it’s the day of the BoE’s next Interest Rate Decision. Mark Carney will also be speaking that day so feel free to get in touch to discuss any planned currency exchanges in more detail as planning around these events could be key.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on jxw@currencies.co.uk  and I will be more than happy to contact you personally to discuss the various options we have available to you.

Sterling weekly roundup and the week ahead (Dayle Littlejohn)

The main talking point this week were the GDP numbers released Thursday morning. Gross Domestic Product numbers measure the total goods and services produced by the UK and is a key barometer to the strength of the economy. The consensus throughout the financial industry was a major fall because this was the first quarterly release since the UK public decided to vote out of the European Union. However the decline was not as bad as many economists were predicting. The quarterly figure was released at 0.5% (prediction 0.3%) and the yearly figure at 2.3% (prediction 2.1%).

As for sterling exchange rates you would have thought the pound would have had a good finish to the week however this was not the case and the pound continued to deprecate to the close on Friday. This is a common trend clients have got used to over the last 4 months.

This week the Bank of England release their latest interest rate decision and this release should be watched closely if you are buying or selling the pound for the remainder of the year. Before the Brexit vote it looked like the Bank of England were close to raising rates, how times have changed. We have already seen a cut by 0.25% since June 23rd and the golden question now is will the Bank of England cut rates this Thursday?

Many economists have predicted a cut to 0.05% however I’m sceptical. With GDP numbers exceeding expectation last week this gives the monetary policy committee a reason to hold off. It’s important to consider if members of the MPC vote in favour of cutting and I expect one or two will, the pound could still devalue, consequently buying currency will become more expensive.

If you are reading this website in order to find out information in regards to buying or selling the pound I can help you achieve the best exchange rates on the market whilst keeping you up to date with economic information. Common clients I deal with are business owners, high net individuals and people buying property abroad.

Its important to analyse both currencies that you will be trading therefore I would recommend emailing me with the currency pair (GBPUSD, GBPAUD, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

** IF YOU ARE ALREADY USING A BROKERAGE TO BUY YOUR CURRENCY IT WILL TAKE TWO MINUTES TO EMAIL FOR A COMPARISON AND I AM CONFIDENT I WILL BEAT ANY PRICE YOU ARE CURRENTLY RECEIVING  **

Will Sterling fall further against the US Dollar in the run up to the election (Tom Holian)

We are now less than 2 weeks before the US goes to the polls to deicde whether Hillary Clinton or Donald Trump will become the next US president. At the moment it appears as though Clinton is leading in the polls with 49% compared to 45%. However, as the Brexit proved polls can be very unreliable.

The US economy is going from strength to strength and yesterday GDP figures for the third quarter came out at 2.9% in the three months to September according to the US Commerce Department. Jobless claims also showed that unemployment levels are falling so everything looks to be on course for an interest rate hike in the world’s leading economy.

To me I think the US Federal Reserve have more than enough reasons to increase interest rates but with the election looming I think they are waiting to see what happens with the next president.

The GDP figures for the year showed 0.4% better than the expectation of 2.5% and this has seen GBPUSD exchange rates fall to close to their lowest level in 31 years.

Even though this week the UK posted better than expected GDP data this did little to improve the Pound vs the Greenback and this highlights the problems that the UK is facing with the announcement that Article 50 will be triggered by March 2017. Since the Brexit Sterling has fallen dramatically and I think we could see further falls ahead for Sterling exchange rates against all major currencies. Indeed, Sterling is the world’s worst performing currency on the global money markets this year.

Having worked in the foreign exchange industry since 2003 I am confident that I can offer you bank beating exchange rates and also help you with the timing of your currency transfer.

If you have a currency transfer to make and want further information or for a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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Will the pound fall as we approach the US Election?

As we get closer and closer to the US Election there remains a real possibility the pound could come under pressure. This is because investors will be looking to move money into the higher yielding US dollar which will see the pound weaken. GBPUSD is the most heavily traded currency pair for the pound so big shifts on GBPUSD will impact sterling against other currency pairs. The next few weeks will I believe see increased volatility on exchange rates owing to the US election, thankfully there are options available which we can utilise to help minimise your exposure to these undoubtedly turbulent times!

The pound has plunged into new depths in October as the expectations of a hard Brexit increase. This last week however has seen the pound find a little support with the good news on UK GDP (Gross Domestic Product) yesterday. I think the pound is going to continue to struggle in this environment of political uncertainty as investors avoid taking big positions. News that the legal challenge to invoking Article 50 has failed we have seen the pound slip a little in today’s sessions.

Sterling may push lower further next month with the US Election likely to take attention and funds. Investors are likely to wish to capitalise on a stronger US dollar once the election outcome is known. Assuming a Clinton victory this should see the US dollar rise and sterling fall. Investors have been betting the US will raise interest rates and once the election is over investors will surely be looking to when the Fed will next hike. A Trump victory could have all sorts of repercussions for the US dollar and the pound which will affect the pound against all currencies.

A Limit order allows you buy at a high rate is levels improve. A Stop / Loss order allows you to lock in a lower level should the rates fall. These simple tools can be used by investors to manage their risk and best / worst case scenarios.

I work as a specialist currency broker and can help with any transfers you will need in the future. Please contact me Jonathan on jmw@currencies.co.uk to learn more about our service and the latest news to keep up to date with.

Sterling under pressure against the Euro even with positive UK GDP figures (Tom Holian)

Sterling Euro exchange rates have fallen yet again even though UK GDP figures came out better than expected yesterday morning. This was the first quarter after the Brexit vote and although the figures were good the gains were very short lived for the Pound vs the Euro.

The real issue for the Pound is that it’s likely to remain under pressure for quite some time owing to the political instability surrounding the announcement of Article 50. Since the start of October we have seen GBPEUR exchange rates fall by as much as ten cents from the high to the low and in such a short space of time this is very concerning particularly for anyone looking to send money to Europe.

Bank of England governor Mark Carney and deputy governor Ben Broadbent have also recently spoken about the value of Sterling and have not shown too much concern so with the Bank of England due to meet next Thursday I think we could even see an interest rate cut happen.

Indeed, Carney claimed that the interest rate cut put in place post-Brexit helped to save a huge amount of jobs and settle the economy caused by the vote to leave the European Union back in June.

Even if the Bank of England do not cut interest rates next week any signals of one coming could cause Sterling to fall even further against the Euro. Therefore, if need to buy Euros before the end of the year then it may be worth buying a forward contract which means you can secure the current exchange rate removing the uncertainty caused by fluctuating exchange rates.

Having worked in the foreign exchange industry since 2003 I am confident of being able to offer you bank beating exchange rates when buying or selling any major currency and also help you with the timing of your transfer.

If you have a currency transfer to make and would like further information or for a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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Positives for the UK economy, but Sterling doesn’t budge (Daniel Johnson)

 Pound Forecast

We have had numerous factors that were positive for the UK economy over the last few days. Nissan pledged to build several new models in the UK, a new runway at Heathrow has moved a step closer and GDP data came in better than expected.  These factors would usually have influence on Sterling  but the uncertainty surrounding trade negotiations, labour and inflation have put a halt to any Sterling rally.

GDP was up by 0.2% and this would usually cause a Spike for the pound, but if we look at GBP/EUR there was a rise of around 40 pips and GBP/EUR quickly fell back below 1.12. With the other factors stated above as catalyst the pound should have moved significantly higher. This is a worry. Investor confidence is clearly low.

The CETA deal between Canada and the EU should be approved tomorrow, but it does not bode well for UK negotiations if the CETA deal seven years in the works was nearly scuppered by a small region in Belgium. A soft Brexit would be the sensible option, but Jean Claude Junker and Francois Hollande have mad it clear negotiations will not take place until article 50 is triggered.  I think in order for Sterling to rally article 50 must be invoked and negotiations must be quick and decisive. Don’t hold your breath.

Currency Pairings in Detail

GBP/USD

The greenback is currently is at a 31yr high. The last time rates were this good for dollar sellers Duran Duran were number one and Back to the Future was top of the box office. Although sellers may be tempted, there is the possibility of further gains. If Clinton gets in (factored into the market to some extent) the dollar will strengthen but perhaps which could cause more strength would be a rate hike in December which is highly probable. Add in the Brexit problems and we could be below 1.20 shortly.

GBP/EUR

Short to medium term the pound could have further losses, many analysts are predicting as low as  1.05 in December. This could we ll be the case, but the Euro has some serious problems which could cause substantial weakness for the Euro. Italian Bank’s bad loans totaling €360bn, the threat of further referendums, Greece’s debt crisis and the seemingly impossible task of stimulating inflation.

GBP/AUD

Aussie sellers are now at a three year high. Australian Dollar strength is causing a problem  for the RBA however. It is putting the Chinese off Australia’s raw materials and they may seek a cheaper option. This problem would usually be solved by dropping interest rates to weaken the currency , but rates were cut recently and did little to weaken the Aussie. With the RBA seemingly powerless to weaken the Aussie expect the pound to fall further.

If you have a currency requirement it is vital to have an experienced broker on board to help you make an informed decision on when to trade and what contract to utilise to maximise your return. I am in a position where I can confidently say I will beat any competitors rate of exchange. If you would like free assistance please do not hesitate to get in touch. Feel free to e-mail me at dcj@currencies.co.uk. Thank you for reading my blog.

 

Sterling Forecast before Eagerly Awaited UK GDP Numbers (James Lovick)

This morning is the day we have been waiting for with the release of UK Gross Domestic Product (GDP) numbers for the third quarter. This data represents the 3 month period after the referendum vote for Britain to leave the EU and hence there is monumental interest in these numbers today.

The markets are expecting a fall to 0.3% down from 0.7% from the previous quarter which is a fairly substantial drop. In my view this seems like a very steep fall as many of the indicators post Brexit have been stable and some even positive. We also know that manufacturing exports have performed incredibly well as a result of the weak pound whilst retail sales have also performed well on the whole.

The services sector is expected to have held up well but it is construction which may see a wobble. Construction however comprises a much smaller part towards GDP. As such I feel the forecast for this morning is too gloomy and a stable or better figure could see a short term rally in the pound. This kind of opportunity is unlikely to last for more than a few days so if you have a pending currency requirement then please get in touch and we can try and help you maximise on these kind of opportunities when they happen. A stronger number this morning would in my view be very good news for the pound.

The figures are likely to be seen as a victory for the ‘Remainers’ or the ‘Brexiteers’ depending on how well the economy has performed and politics are going to revolve around this release today. The data is released at 09:30 and high volatility is expected.

Clients who are buying Euros and dollars continue to feel the pinch and the outlook is not set to get better in the short term. If you have an upcoming currency requirement either buying or selling and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

Sterling hits a two-day high after positive ‘Brexit’ comments, but is this just a short term opportunity? (Joseph Wright)

After facing an increasing amount of pressure throughout October, the Pound is under less downward pressure this afternoon after some positive comments from a Brexit minister.

At the time of writing Sterling is up against every major currency pair, and the reason behind the positive move is down to comments from junior Brexit minister David Jones, who suggested that any UK-EU treaty would be debated by parliament which is Sterling positive news as parliament is generally considered to be favouring a ‘Soft Brexit’.

By ‘Soft Brexit’ financial markets are referring to a long drawn out period of negotiations between the UK and EU whereby the UK retains access to the single market.

Those planning on making a currency conversion involving the Pound and another major currency, will need to be aware of how talk of a ‘Hard Brexit’ can negatively impact the Pound’s value. Earlier in the month a number of key public European figures such as Francois Hollande and Donald Tusk outlined their own ‘Hard Brexit” stance, and their comments sent the Pound downward.

Their comments added fuel to the fire after UK Prime Minister, Theresa May announced that the ‘Brexit’ initiation process will begin in March of next year.

Today’s Sterling positive comments have pushed the Pound up to a two-day high, and personally I think this has created a good opportunity for Sterling sellers as numerous financial institutions have predictions of a weaker Pound next year, with HSBC outlining GBP/EUR parity at the end of 2017 being one of the stand out predictions.

Tomorrow’s UK GDP Figures at 9.30am could further boost the Pound if the figure beats expectations, and feel free to get in touch if you wish to discuss this news event and the potential outcomes.

If you are planning a currency conversion involving the Pound and another major currency, it’s worth your time getting in contact with me on jxw@currencies.co.uk  in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

You can also call in directly on 01494 787 478, just ask reception for Joe.

Will UK GDP figures cause Sterling exchange rates to fall even further? (Tom Holian)

Tomorrow morning sees the release of UK GDP figures for the third quarter which is the quarter immediately post-Brexit and this could see GBPEUR exchange rates and GBPUSD exchange rates move very quickly both before and straight after the data release.

If we see the figures come out lower than expected then this could see Sterling fall very quickly against all major currencies as it will reinforce the problems caused by the vote to leave the European Union.

Yesterday Bank of England governor Mark Carney spoke at the House of Lords Economic Affairs committee concerning the Brexit issue. Carney has been criticised by some senior MPs as well as Theresa May for some of his comments since the Brexit and during yesterday’s meeting he hinted that he may not renew his contract when it’s due for renewal in 2018.

Indeed, both Mark Carney and Ben Broadbent who is the deputy governor of the Bank of England have said that they don’t appear to be too concerned about the value of Sterling so to me this could point to an interest rate cut at next week’s central bank meeting and typically an interest rate cut results in weakness for that particular currency.

Therefore, if you’re thinking about selling Sterling to buy Euros or US Dollars then it may be worth looking at organising this before next week’s interest rate decision.

If you don’t have the full amount of funds available at the moment then it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date and this will help to avoid the uncertainty as to where rates may move.

Having worked in the foreign exchange markets since 2003 for one of the UK’s leading specialist currency brokers I am confident that I can offer you better exchange rates than using your bank when buying or selling any major currency and also help you with the timing of your transfer.

To find out more information or for a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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Buying Euro a Dollar rates hurt as the week continues (Joshua Privett)

Buying Euro and Dollar rates took a further slide this afternoon as markets were gearing up for Mark Carney’s appearance in front of the House Treasury Committee.

Mark Carney is the Governor of the Bank of England, and given the recent shock to the UK economy, this currently hypersensitive market was approaching the news release with baited breath.

The bread and butter of what markets were hoping for was some kind of indication as to what the highly anticipated growth figures for markets on Thursday may reveal.

In the run up to the event a nervous market revealed itself, with falls recorded on GBP/EUR, GBP/USD, and most noticeably on GBP/AUD. 

It seems that most investors in commercial markets were keen to relieve themselves of any risk ahead of the event itself so sold Sterling off in droves to protect themselves. Unfortunately, with Sterling’s value lowering through decreased demand, this hurt anyone with a private Euro or Dollar purchase.

As my Sunday post detailed this week was fraught with risk for anyone buying a foreign currency and we are already seeing this manifest on the exchange rates.

Thursday is the first look at UK growth figures since the recession, and whilst Carney gave little away in his speech today, we have learned a valuable lesson that markets are risking little this week. It’s likely in the run up to the news on Thursday we will be seeing similar drops on Sterling as markets avoid gambling on what will be an important data release for the UK economy.

My opinion has not changed and as such I strongly recommend that anyone with a buying Euro, US Dollar, or Australian Dollar requirement should contact me on jjp@currencies.co.uk to discuss a strategy on how to protect your upcoming transfer from any adverse movements and maximise your currency return with what is available in this current marketplace.

I have never had an issue beating the rates of exchange on offer elsewhere, and as such a brief conversation could save you thousands on an upcoming transfer.

You can also contact me on the form below whilst markets are quiet overnight and I will respond to you as soon as I am able.