Monthly Archives: December 2016

Sterling still struggles as investors seek a safer haven to bring in the new year (Daniel Wright)

The Pound is not having the greatest end to 2016, particularly against the Dollar.

It appears investors and speculators are stepping away from Sterling and taking their profits after a slight gain seen by the Pound over the past few weeks of trading.

As we ease into the final few days of the year there are no major signs that this will turn around so if you have a foreign currency to purchase with Sterling in the next few days it may be prudent to look at doing something sooner rather than later.

As we move into 2017 the main focus will be on the actions of the Supreme Court and whether or not they do decide to overturn the ruling over article 50. Sterling exchange rates may move suddenly straight after the result is released and following this I would not be surprised to see yet another bout of jawboning, speculation and issues hanging around the matter that will no doubt add to the market volatility.

My personal opinion is that although this may be a potential banana skin, I feel the Pound is still greatly undervalued and that Sterling exchange rates should have a good recovery to look forward to, we just need to get all of the negative press out of the way first!

If you are looking to carry out a currency exchange in the coming days, weeks, months or indeed years then it is well worth getting in touch with me personally. The company that we all work for assists clients with large currency exchanges day in, day out and we have a base of over 90,000 satisfied clients.

We pride ourselves on highly competitive rates of exchange along with the very top level of customer service, and I would be extremely surprised if we could not save you money over your bank or current broker, along with offering you a smoother service.

Feel free to contact me (Daniel Wright) by emailing djw@currencies.co.uk and I will be more than happy to get in touch with you personally to discuss the various options available to you and answer any questions or queries you may have too. I look forward to speaking with you.

Sterling’s Value Drops Ahead of Christmas Slowdown (Matthew Vassallo)

Sterling has started to lose value over the past 48 hours, with a downturn against both the EUR & USD.

The Pound has performed much better recently, in line with an improved run of economic data emanating out of the UK. Despite on-going concerns surrounding our future growth prospects due to our upcoming Brexit, the UK economy does seem to be moving forward more positively and this has been reflected in Sterling’s value.

GBP/EUR rates touched 1.20 on more than one occasion recently and GBP/USD was putting pressure on 1.28 only a few weeks ago.

However, since then GBP/EUR have retracted towards 1.17 with the Pound finding a lot of resistance around the 1.20 mark, whilst GBP/USD rates have slipped alarmingly below 1.23. This proves how fragile the UK economy remains in the eyes of investors and it will take a lot more than a run of positive economic figures to convince the markets that the UK economy can move forward sustainable following our Brexit next year.

This is likely dominate market sentiment for months, possibly even years to come and as such I would be wary about putting too much faith in sustainable Sterling strength. Until we have a clear picture of how we will facilitate our Brexit the uncertainty that this has created will handicap any major advances for the Pound in my opinion.

I do feel as we move into 2017 and assuming we do get some factual information released about how the UK economy will move forward post Brexit, that economic issues manifesting themselves inside the Eurozone will inadvertently push Sterling’s value up. However, I would be prepared to gamble on this and as such I would be taking advantage of the 4-5 cent improvement seen for those clients holding the Pound over the past month.

If you have an upcoming Sterling currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, 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 Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

When shall I Trade? (Daniel Johnson)

GBP/EUR

I feel long term we will see Sterling rally against the Euro, I feel it is chronically undervalued at present. The only reason the pound is below 1.20 is due to the electorate’s decision to leave the EU. The key factor in the pound’s value is trade negotiations, which currently leaves the nations economy in uncertainty. The High Court Judgement as to whether the government will vote on the triggering of Article 50 is due to complete in early January and this will determine whether there is a hard or soft Brexit. A hard Brexit would weaken the pound substantially. If you have to buy Euros short term and wish to eliminate any risk from your trade it may be wise take advantage of current levels.

Medium to long term as trade negotiations become more apparent Sterling should gain strength. The Euro also has some serious underlying problems which could rear their head. Political uncertainty  caused by the emergence of right wing groups could cause weakness. Also we have Italian Banks bad loans in excess of €360bn, A debt crisis in Greece and shockingly low inflation. Any of these factors could severely weaken the Euro.

GBP/USD

Following the FED’s decision to hike rates and forward planning indicating there could be as many as three more. I think the US dollar has further ground to gain on Sterling. The Dow is finishing at record highs and economic data is very strong. If I had to buy Dollars I would be moving quickly.

If  you have a currency requirement it is wise to be in touch with an experienced broker. The timing of your trade is vital during such volatile  times, If you have an experienced broker on board we can keeo you up to date with what is happening in the market to help you make an informed decision. If you would would like me to assist with your trade I will be happy to help you personally. If you inform me of the the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the country and as such I am in a position to better virtually every competitors rate of exchange. You would also be looking at saving anything up to 4% in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading.

 

GBP Exchange Rates Slip Before Christmas (James Lovick)

The pound has just started to slip back across all of the major currencies as we approach the festive break. UK GDP numbers are released tomorrow which could make for an interesting day to end the week before Christmas.

The Supreme Court ruling on whether Theresa May must consult Parliament before invoking Article 50 should give new direction for sterling exchange rates depending on the outcome. If Theresa May does with the appeal which cannot be ruled out then this is likely to see the pound weaken very quickly in the short term.

This would signal a hard Brexit as the Prime Minister could effectively bypass all those Members of Parliament who wish to remain as close to Europe as possible. So much rides on this outcome that this in my view will be the most important driver for the pound in January 2017. The other risk of course is that if Theresa May loses the appeal there is a chance that a general election could be called so the government can demonstrate a clear mandate to proceed with the Brexit.

As such I see more risk for the pound in early 2017 considering the higher levels the pound has been trading at with rates for GBP EUR currently sitting just above 1.18. Article 50 still needs to be invoked in the next three months and there is likely to be considerable volatility as we approach the end of March. Those clients looking to buy Euros may be wise to consider taking advantage of the current higher levels for this pair.

If you have an upcoming currency requirement either buying or selling currency 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

Government borrowing falls and what to expect next year (Dayle Littlejohn)

Today the Office for National Statistics released their November borrowing figures. The numbers fell to £12.6bn down £0.6bn compared to November 2015. However the numbers disappointing as many analysts predicted falls below £12bn.

For the remainder of this year economic data is limited and volumes being traded are thin. This time of year speculators will shift their assets into safe havens and unfortunately sterling is not seen as safe since the Brexit vote. Personally foreign currency buyers before the year is complete may wish to purchase before the Christmas break.

As for next year, the Supreme Court ruling should heavily dictate exchange rates for the foreseeable future. If the Supreme Court rule in favour of the High Court this would mean the UK would potentially be staying part of the single market and therefore the pound could gain momentum.

However if the Supreme Court overrule the High Court (this would be a surprise), I expect the pound will crash and exchange rates would fall to the lower levels we became accustom to over the last 3 months.

If you are buying or selling pounds in the upcoming months and want to achieve rates of exchange that are better than your bank, whilst receiving regular economic information feel free to email me with your requirements drl@currencies.co.uk or call the trading floor on 0044 1494 787478 and ask for Dayle Littlejohn.

Common clients that I deal with on a regular basis are, company directors, property buyers and sellers, sole traders and many more. If you are unsure if I could help you it’s worth emailing me and I will respond as soon as I can.

Sterling not feeling the festive spirit in the lead up to Christmas (Daniel Wright)

The Pound does not appear to be too jolly in the lead up the Christmas showing slight losses against most major currencies so far this week.

We have a few key economic data releases in the next few days and with slightly thinner trading levels during this time of year you can see larger swings than normal off the back of normal economic data.

For anyone that has a currently requirement coming up in the next few weeks you must be aware that leaving a position open over the festive season can be a risky strategy, especially if you are not going to be fully available to watch the markets or transfer funds should there be a big movement in your favour or against you.

Public sector net borrowing figures have been released this morning for the U.K were a little worse than expectations and we also have Consumer Confidence figures out overnight tonight and GDP (Growth) figures on Friday morning.

This is not to forget that we also have the on-going and well publicised Brexit talks and the pending Supreme Court decision on article 50 which will no doubt lead to  a large market movement. Expectations on the result of this decision are for early in January but as 2017 has shown us surprises can pop up and things do get leaked so do not be surprised if the market starts to move on rumours well in advance of this coming out.

All in all this year has been fairly jam packed with big political and Economic information which we hope we have kept you fully up to date with. If you carry out currency exchanges through your bank or a broker at present and you find our market information useful then why not give us a try. We do not only pride ourselves on providing up to date and non-biased market information but we also offer fantastic rates of exchange and a high level of customer service at the brokerage we work for too.

Pound Sterling Forecast has been running for 7 years and the brokerage we work for has been running for 17 years so we have a wealth of experience in assisting clients with currency exchanges so will be more than happy to help.

Feel free to contact me (Daniel Wright) directly on djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to contact you personally.

GBPEUR forecast for the next 3 months (Dayle Littlejohn)

Since the start of November GBPEUR central exchange rates have increased from 1.1060 to 1.1950. Therefore a €200,000 purchase is now £13,467 cheaper.

The reason for the rise is that the High court in the UK ruled that Prime Minister Theresa May does not have the power to invoke Article50 and therefore start the process of leaving the EU. This means that investment has re entered the UK as remaining part of the single market is now an option.

As for the Eurozone the Central Bank have announced they will be extending the Quantitative easing program and will be therefore injecting another 540 billion euros into the economy to stimulate growth.

This week the Federal Reserve (US central bank) raised interest rates from 0.5% to 0.75% and analysts at ING are predicting EURUSD exchange rates could reach parity. If this occurs I expect the pound will then make further gains against the euro and GBPEUR exchange rates will finish the year in the low 1.20s.

Looking ahead to next year the major talking point will be the Supreme Court decision in January. If the Supreme Court rule in favour of the High Court I would expect to see the pound remain buoyant at levels we have become accustom to throughout December. However if the Supreme Court overturn the High Court, I expect the pound to crash as an exit from the single market will be on the horizon.

The problem euro buyers and sellers have is that it’s very difficult to predict the Supreme Courts verdict! 

If you are buying or selling euros in the upcoming months and want to achieve rates of exchange that are better than your bank, whilst receiving regular economic information feel free to email me with your requirements drl@currencies.co.uk or call the trading floor Monday morning on 0044 1494 787478 and ask for Dayle Littlejohn.

If you are trading a currency pair that I have not covered, feel free to email me with the pair (GBPUSD, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is drl@currencies.co.uk and I look forward to receiving your email.

 

Pound sees tentative rises for buying Euros and Dollars ahead of the thinner trading of the Christmas period (Joshua Privett)

Buying Euro, USD and Australian Dollar exchange rates have shown a noticeable uptake ahead of the Christmas period with rates above the 1.19 level on GBP/EUR, and above 1.70 on GBP/AUD being realized ahead of markets closing for the weekend.

The gains against the Euro and Australian Dollar in particular this week were due to a lower demand for these currencies which sucked away some of their recent, and frankly over-inflated, value. The clear driving force behind this movement is attributed to the historic rise in interest rates in the US, only its second time the FED have been do so since the financial crisis.

The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transfers and exchanges concentrated between the pair, when one of the two currencies suddenly gets a large boost in demand, as we saw this week, the other loses value through a corresponding slackening in demand. This is why GBP/EUR briefly managed to maintain its vantage point above the 1.19 level.

The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% as an unfortunate example. However, it is traditionally seen as an unstable currency due to its links to the commodities market, so when you have a safe-haven currency which raises its base interest rate rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD – tipping over the 1.70 level for the second time this week.

Moving forward however, Euro and Dollar buyers have the phenomenon of profit taking to deal with as unusual end of year market forces take hold of exchange rates over the next few weeks.

At the close of the year, and what a year it has been, traders have to consolidate their profits in a stable currency for the rough 2-week period when they are away from their desks. This protects their capital from any adverse movements in what are normally ‘safe-haven’ currencies, so that when they come back to the desks the amount of capital they are managing hasn’t been worryingly eaten into. Of course the Pound is anything but stable at the moment and will likely suffer in the sell-off that ensues.

As such anyone with a buying Euro or Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.

Since Trump became President in November, Euro buyers have gained over 11 cents in the marketplace for GBP/EUR and 10 cents on GBP/AUD. Meaning that in real terms on a £100,000 transfer buyers have gained an additional €11,000 or $10,000 in the space of 6 weeks. Understandably, the popular option at the moment is to consolidate those gains.

The turn of the New Year has many forks in the UK and therefore the Pound between January and March which are difficult to account for ahead of time, and markets will be factoring this in to the price of Sterling moving forward which could end up being expensive for anyone with a planned Euro or Dollar based obligation to meet in the New Year.

Sterling buyers of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.

If you are planning to make a currency exchange involving the Pound and a foreign currency, it’s well be worth your time getting in contact with me on jjp@currencies.co.uk over the weekend 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.

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

Pound hangs around pivotal points against a number of major currencies (Daniel Wright)

Sterling exchange rates are currently sat around a number of key levels which we may see broken through over the course of trading next week.

We have the Pound sat near 1.20 against the Euro, 1.25 against the Dollar, 1.70 against the Australian Dollar and 1.80 against the New Zealand Dollar.

Economic data for the U.K still continues to be solid post referendum and although there is the potential banana skin of article 50 and the supreme court decision hanging over the head of the Pound it does appear that the Pound is creeping back into fashion.

All 9 members of the Bank of England voted in favour of no change to interest rates on Thursday and I personally feel that the only thing holding the Pound back from being a great deal stronger is the uncertainty hanging over its head over the supreme court issue. This has the potential to knock the Pound back down again so anyone looking to exchange currency in the near term may wish to protect themselves from being caught out.

In my opinion I would not be surprised to see Sterling have a good week next week, we have thinner trading levels during the festive season so markets can move a little more than normal and i cannot see anything too negative hitting the Pound in the next week or so of trading.

If you are looking to carry out a currency exchange in the coming days, weeks or months ahead then here at Pound Sterling Forecast we can help you get both better exchange rates and an exceedingly high  level of customer service too.

You are welcome to contact me (Daniel Wright) the creator of this site 7 years ago on djw@currencies.co.uk and i will be more than happy to contact you and deal with you personally.

 

Sterling Rallies – Will This Trend Continue? (Matthew Vassallo)

Sterling has rallied against most of the major currencies of late but the key question now is whether this trend will continue?

Despite the recent improvement I do feel that the on-going saga surrounding the UK’s upcoming Brexit will continue to drive market sentiment and as such the Pound is likely to be handicapped, at least to some extent, over the coming months. The UK economy seems to be holding up well at present, with a strong run of economic data supporting Sterling’s recent rise.

However,  this is masking a deep concern amongst investors as to how we are actually going to facilitate our exit from the EU and with no information yet provided by UK Prime Minister Theresa May, investors are currently shooting in the dark when it comes to predicting how the UK economy will react in months and even years to come. A report yesterday alluded to any trade deals post Brexit taking up to 10 years to negotiate and these are not exactly ideal economic conditions to support a sustainable rise for Sterling.

The UK economy remains fragile and whilst the Pound has clearly found a foothold in the market, in particular against the EUR, I’m not convinced that the current trend will continue at any great pace.

GBP/EUR rates remain marooned under 1.20, with the single currency finding a lot of protection around this key resistance level and with GBP/USD rates back under, we are hardly out of the woods yet. The USD has been well supported and this week’s interest rate hike by the US FED will only help to solidify it’s potions and with the High Court ruling surrounding the triggering of Article 50 still clouding investors decision making, I would not be prepared to gamble on the current market.

If you have an upcoming Sterling currency requirement and are concerned about the recent market volatility, then we can help guide you through these turbulent times, by providing assistance with any currency transfers that you may require. Our award winning exchange rates and market insight are available to all, so please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk if you have any currency related queries.