Daily Archives: January 5, 2017

Sterling remains under pressure despite positive data release, is this a sign of things to come? (Joseph Wright)

The Pound has come under pressure today despite the UK economy posting some better than expected figures in an important sector of the UK economy.

After beginning the day negatively the Pound received a slight boost this morning as Services PMI data came out better than analysts had expected. The data showed that sentiment within the services sector is positive, which is important for the UK economy as the services sector amounts to more than two-thirds of the countries economic output.

In normal market conditions it wouldn’t be unusual to see the Pound spike upward off this news, and although it attempted to the currency is currency down against all major currency pairs with the exception of the US Dollar, which has dropped in value today also across the board.

Those concerned with the value of the Pound should pay close attention to the outcome of the Supreme Courts decision on whether or not the government needs parliamentary approval before beginning the Brexit process.

This topic appears to be the biggest mover of currency pairs involving the Pound and the Euro could also feel the effects of the decision. The outcome is scheduled to be released between the 12-17th of this month and I expect expectations of the decision to effect Sterling’s value between now and then.

Other than this, economic data could also weigh on Sterling’s value especially if it disappoints considering what happened today. Feel free to get in touch if you wish to discuss any upcoming news releases and how they could effect your upcoming currency exchange requirement.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in touch 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 to speak with me on 01494 787 478, just ask reception for Joe. 

 

Sterling Exchange Rates Slide as Brexit Fast Approaches (James Lovick)

The pound as of this morning is firmly back under pressure against most of the major currencies with Brexit now fast approaching having started 2017. GBP EUR has slipped to below 1.17 this morning and this is most likely as a result of the new appointment of Sir Tim Barrow as the UK’s new Ambassador to the EU. The drop in sterling in my view is likely to be attributable to the perception that this change of Ambassador could help Theresa May push for the “hard” Brexit option which the markets generally perceive as high risk for sterling and hence the weakness in the pound.

Politics will be a central theme for sterling exchange rates as we approach 31st March, the date by which UK Prime Minister Theresa May will formally give notice that Britain is leaving the EU. Developments over Brexit are changing virtually by the day and this is having a real impact on the price of sterling. For up to date information and guidance with regards timing a currency exchange then feel free to make contact and we can try and assist.

Although European politics will have a major part to play for Euro exchange rates, the first major election in the Netherlands won’t be held until March. My view is that these European elections could be very damaging for the Euro although for the next three months it is Brexit which is likely to be the major driving force and which steals the headlines.

As such those clients needing to buy Euros are more likely to be hindered by the nervousness and uncertainty over Brexit over these next few months. Those clients holding pounds needing to buy Euros or US dollars for example are unlikely to see major improvements but there will be some opportunities in these markets. For those clients that need to buy sterling and are selling Euros then there could be some sizeable gains to be taken advantage of as we approach 31st March,.

On a more upbeat note the pound has received some small positive releases from the manufacturing and construction sectors following very strong Purchasing Managers Index surveys for these sectors. The numbers arrived better than expected in both cases which highlights optimism for the British economy.

However UK household borrowing has now risen to the highest levels since the financial crisis of 2008. This is a worrying development especially at a time when interest rate policy by central banks is at a turning point. News like this is not going to help drive the pound higher when debt levels are at such high levels.

If you would like further information on any of the major currencies to include GBP, EUR USD, AUD and NZD and to discuss how we can assist 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