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Why is the Pound still getting weaker? Here is my take on what may be happening – Sterling drops again against EUR, USD, AUD, NZD,CAD,ZAR,CHF and all majors (Daniel Wright)
The Pound has once again had a pretty dire week after a fairly positive end to last weeks trading.
Strangely we had some very positive data out yesterday as the CBI (Confederation of British Industry) announced that they feel that the U.K may avoid a triple dip recession when the GDP figures for the first quarter of 2013 are released in April. Usually this would bring a little strength to the Pound but still Sterling continues to suffer.
Today Governor of the Bank of England Mervyn King spoke at 10:30am – He kept up to his usual pattern and by 11:00am the Pound had dropped dramatically against most major currencies, personally I feel there is a game plan behind all of this and that the BOE and U.K Government are aiming to keep the value of the Pound low throughout this quarter.
If the Pound remains low then exports of goods and services from the U.K should increase, this increase may be the key to make us just avoid a triple dip recession which is what I personally see as the main aim at present. Should the U.K drop into the triple dip territory then the risk of a credit rating downgrade may increase which may make it more costly for the U.K to borrow and could put us into further trouble.
Once (assuming we do) we have avoided the triple dip recession then it gives the BOE and Government another 6 months to play with where they can concentrate a little more on inflation and various other targets not being met, we may even see a small hike in interest rates after April which should lead to a little Sterling strength.
I am afraid though if you are looking for a stronger Pound and your business has a pending currency transfer to make, you are in the process of buying a property overseas or you just sent wages out to another country you may be in for a rocky ride for a few months. Of course I may be completely wrong and the markets are so volatile at present that even a sniff of the Euro zone crisis coming back to a head and things may change completely – That is the beauty (or problem with) the currency markets.
One thing you do need to make sure of if you are in the position where you need to buy or sell any amount of currency involving a bank to bank transfer then you should have a proactive currency broker on your side who can be your eyes and indeed ears on the market. I personally welcome any new clients and treat every transfer the same whether it is £1000 or £5,000,000 as I completely understand that everyone’s need is different and to some people every little counts, so I aim to make everyone a saving over their bank or indeed current broker.
Feel free to contact me directly for a live quote or even for a brief discussion surrounding your requirements. You can email me on djw@currencies.co.uk please note we only deal with bank to bank transfers and no cash or speculation. Please also remember to leave a contact number and time to call when sending me an email.
I look forward to speaking with you.
The pound crashes against all the majors and there is not a whiff of QE in the air! Sterling drops to 9 month low on trade weighted Index
The daily roller coaster ride for anyone with an interest in the pound continues. Brave buyers of the pound who have held out are being rewarded as we touch a:
- GBPEUR 10 month low - GBPAUD 5 month low - GBPCAD 3 month low
- GBPUSD Near 2 month low - GBPNZD 6 month low
GBP sellers who continue to hold out are being punished and this may continue into next week. Lets face the facts, the stats above speak for themselves. The pound is really suffering at the moment. On a trade weighted index, sterling is at a 9 and a half month low. Regular readers of the blog will have seen this coming as we have been predicting tough times for the UK in 2013. The reason the situation has deteriorated even further today is partly due to rumours and speculation about the UK leaving Europe.
Blockbuster, HMV and Jessops have become the latest casualties of Britain’s declining high street. Who will be next? The continually challenging environment for businesses in the UK persists and it is difficult to see where good news will come from. Talk of the UK loosening ties with Europe is not good for business either.
Tomorrow we have Chinese GDP data which may well help the Aussie, Kiwi and Loonie to further strengthen their recent gains against the pound. This data release is very important as many have an interest in the performance of the Chinese economy and I am sure the results will attract attention tomorrow.
Later tomorrow morning we have UK retail sales figures which usually affect short term GBP movements and could provide a little breathing space for anyone looking at rates lately and losing faith. They will reflect December and the Christmas period so they should provide more of an indication of just how exactly the UK economy is performing.
Looking further ahead the 24th January is the first estimate of UK GDP for Q4 2012 so we could see some sterling strength if this is positive but this is more than likely to be negative. Another estimate for GDP from the end of last year by the NIESR (National Institute of Economic & Social Research) had UK GDP at -0.3%. Variation between NIESR data and the ONS (Office National Statistics) data does not often vary hugely and as such I cannot see this providing the pound with a lift.
Even if your transfer is just a one off making the right decision at the right rate is important. For a free, no obligation discussion of how we can source you a better exchange rate, help limit your exposure to market volatility and generally make you feel better about moving money internationally, please feel free to contact us on the contact form. If you wish to speak with me directly please use my email jmw@currencies.co.uk.
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How will the pound fare against these currencies in 2013? AUD, NZD, CAD, ZAR Forecasts.
The pound has had a typically uncertain start to 2013 with declines in Services and Construction, but with improvements in Manufacturing. As always these early month releases have affected short term movements against currencies giving well prepared clients opportunities to maximise their rate. This site of course focuses on GBP but when looking at rates on your currency it is important to be aware of global events that may affect the currency you trade. I have chosen AUD, NZD, CAD and ZAR because there are many common themes affecting their movements. Sterling doesn’t see too many independent moves in the same way these currencies do and with the global economy the way it is, the moves on these currencies can be unexpected. An awareness of what drives your rate is key to understanding the market and getting a good deal. Whatever your level of interest in the markets always feel free to post a comment below or contact me Jonathan directly on jmw@currencies.co.uk for information.
I think the big movers for the pound itself this year will stem from the prospects of further QE as well as UK growth prospects. Significant independent GBP moves should only really be affected by these concerns. For the month of January we are unlikely to see QE and henceforth a big drop for the pound looks unlikely. Therefore anyone who can hold out longer before they sell the pound for a currency may find an opportunity in the future. This means that those selling a foreign currency to buy sterling may wish to position themselves to move sooner particularly since current rates are so good.
GBPAUD – Positive data from China and improved global sentiments due to the fiscal cliff are keeping the Aussie strong. 1.60 has been a target for many of my GBPAUD buyers but this rate looks unlikely to be hit anytime soon. Conversely those selling are targeting a 1.50 so we are loosely in the middle of such rates. Current market conditions indicate to me there is more chance of the rate hitting 1.50 before 1.60 due to likelihood the Australian economy will remain strong and the fact the pound looks unlikely to stage the kind of resurgence that would enable 1.60 to be hit. The general improvement in market sentiments due to eurozone stability and resolution of the fiscal cliff back up my claim here but things can change quickly. If you are a buyer or seller of Aussies you can make an enquiry directly with me on jmw@currencies.co.uk and I can keep you posted on developments.
GBPNZD – The Kiwi has strengthened lately as Asian data remains positive. A move towards 2 looks unlikely but we could easily see a change in sentiment down the line. As with the Aussie the current market conditions coupled with a weak pound indicate a move towards 1.90 is more likely than the higher rates. On both currencies sentiments can quickly change so some preparation ahead of needing to make an exchange will help you in achieving the best rate.
GBPCAD – The Canadian Dollar has been boosted from the fiscal cliff deal and improved global sentiments. Now back comfortably below 1.60, this could be a good time for sellers to enter the market. The Canadian economy relies heavily on the US and the indications from the US Federal Reserve QE will end in 2013 also helped the currency. Much like the Aussie and Kiwi I expect the Loonie to be well supported and to only be moved by sharp changes in sentiment. I would be surprised to see us above 1.60 in the short term although the debt ceiling negotiations could provide the kind of spikes we saw late December. If you missed the boat on buying at this time and are waiting for an improvement you could be in luck depending on how long you can hold out and how steady your nerves are.
GBPZAR – The ZAR suffered massively due to uncertainty last year. Political uncertainty is a major turn off for investors and the much lower than expected growth in South Africa due to the uncertainty dented confidence. Nevertheless the South African economy has lots going for it with many mineral resources of interest to the West and East. As with those above it looks more likely the currency has recovered somewhat and a settling of tensions globally has helped the Rand. I think this is the currency the pound is most likely to enjoy strength against simply because it is the weakest overall. Sentiments on the Rand are frayed and it will take time to restore confidence. I would not be surprised to see a move above 14 again but unless there is major uncertainty presented to markets, cannot see it moving significantly higher.
Unfortunately no one has a crystal ball to tell you exactly what will happen in the future. But an awareness of all of the fundamental issues surrounding your currency deal will help you make a decision. We aim to make things as easy and simple for our clients so even if your requirement is just a one off speaking to us could save you thousands. This site and the people behind it have won various awards for our straightforward approach to information for those considering currency transfers. It would be impossible to run trough all the details in one post so if you would like more information on anything to do with an international money transfer (even if it is a one off) please feel free to make contact and we can guide you through the process. We handle bank to bank transfers from 1000 GBP to multi million pound transactions and assure you of the very best rate and service. All the best for 2013, jmw@currencies.co.uk
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U.K GDP Figures lead to Sterling strength as predicted at the start of the week :) Pound up against EUR USD CAD AUD NZD CHF ZAR and more! (Daniel Wright)
The Pound has had a good surge in strength this morning as U.K GDP figures came out better than expected. We have seen exchange rates for Sterling rise against the majority of majors which is great news for those looking to buy foreign currency. Regular readers would have seen this prediction on Monday as shown here so hopefully this once again proves we do know what we are talking about and don’t waffle on pointlessly.
U.K GDP (Gross Domestic Product) data came out at 1% growth for the economy during the third quarter of 2012, meaning that the U.K is now technically out of a recession and hopefully this should place the Pound back in investors good books at least for the short term.
Much of the boost will be thanks to the Olympics but I also think that we are doing things the right way and that the recovery albeit at a lot slower pace will continue to happen as long as we can avoid dropping back into negative territory in the last quarter of the year.
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Sterling currency movements today – Pound forecast against Euro, Dollar, Australian Dollar, New Zealand Dollar, Canadian Dollar and South African Rand GBP,EUR,USD,AUD,NZD,CAD and ZAR (Daniel Wright)
Sterling Exchange Rates today and what to expect tomorrow
Sterling – Euro
A busy day for GBP/EUR today as interest rate decisions were released from both the Bank of England and European Central Bank, along with a press conference from head of the ECB Mario Draghi.
Neither rate decision really threw up any huge surprises however the press conference over the course of the afternoon did lead to quite a jittery market. Draghi once again reconfirmed his statement from last month that he feels the Euro is irreversible, and this coupled with the news that Spanish bonds were still remaining fairly steady ensured that the Euro is still holding firm against the Pound.
With little data out today for the U.K and indeed the Eurozone I would expect rates to remain fairly range bound of the course of today unless we hear of any progression with the almost certain pending Spanish bailout. If you look back at the week for both currencies then personally I feel the Euro has nudged it so might strengthen again slightly today.
Sterling – Dollar
Today at 13:30pm we have Non-Farm Payroll Data followed by the U.S unemployment rate. Non-farm payroll data can lead to a volatile end to the week as analyst’s projections can be quite a way out leading to a sharp and rapid market correction so if you have a transaction to carry out involving Dollars contact your account manager here this morning so that he can keep you full informed on market movements 0800 328 5884 With a little confidence once again installed into the market from the ECB yesterday the Dollar weakened away a little again. A strange week all in all for this paring as Australian data earlier in the week had ruffled investors feathers and pushed them back to the safer shores of the Dollar (with GBP/USD creeping below 1.61 again) but now it appears markets are ready to push down hard on the risk button again.
Sterling – Australian Dollar
The Aussie has indeed taken a bit of a bashing this week following a slightly surprising cut in interest rates on Tuesday and poor trade balance figures on Wednesday, The Australian economy is still performing fairly solidly however it does seem to appear the strong AUD is starting to weigh Australia down so personally I feel that we may see this rate improve a little further to round off the week.
Sterling – New Zealand Dollar
Comments made by the Finance minister in New Zealand about the effect of the strong Kiwi Dollar slowly damaging their economy have led to the NZD also having a troubled week. FX intervention has been ruled out so do not expect any major moves in the near term however personally I would not be surprised to see GBP/NZD continue the charge back towards 2.
Sterling – South African Rand
The Rand is on the ropes again after a wave of strikes across the country even outside of the mining industry, threatening a huge industrial crisis and absolutely knocking confidence in the Rand for six.
Personally I would not be surprised to see this escalate further and I feel the Rand may be in for a rocky ride for at least the next few months, there may be traces back as things settle temporarily but until this complicated issue is unwound the ZAR will find it hard to fight back.
Sterling – Canadian Dollar
Tomorrow we see the release of unemployment figures from Canada and the Pound had been edging towards the 1.60 mark this week.
The Canadian Dollar does rely heavily on Commodity prices however unless unemployment figures throw up a surprise I do not see a huge movement for this pairing which has been range bound for some time now.
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.
Euro rates hit 1 month high against the pound. Forecast for the Euro, Pound, AUD, USD and CAD
Sterling exchange rates fell to a one month low against the Euro on Tuesday and rates have now fallen 2.25% in just over a week (a difference of €5,600 on a £200k money transfer). This shows how important itis to keep in close contact with your currency broker as the money markets are notoriously volatile – but why has the Euro strengthened?
Many may be a little confused as to why the Euro has strengthened with some expecting London 2012 to have given a much needed boost to the UK (of course this may well do in weeks to come) however short term the prospects within the UK are still looking bleak. Further indications of this were shown as the NIESR (National Institute of Economic and Social Research a well-respected think tank) released their latest GDP estimate. Historically these estimates are very accurate and again it was to show a -0.2% contraction. This, along with Mario Draghi’s (the head of the ECB) confirming just last week he would do ‘whatever it takes to support the euro’ has led to the recent moves and a drive in favour of the Euro.
The fact the pound is still trading at close to a four year high against the Euro means Euro buyers shouldn’t be too disheartened and with levels still above 1.25 GBP/EUR this still represents a good buy opportunity in my opinion. However if you are looking to secure Euros in the coming days then watch out for the Bank of England’s inflation report due for release today as the UKs growth forecast is expected to be cut to no growth for 2012 compared with 2% predicted a year ago.
The report (released at 10:30 BST) will give clear insight into the Banks thoughts and projections and may hint at its next moves in relation to monetary policy. Rumours have been growing that the BofE may consider cutting interest rates from the already record lows of 0.5% – good news for your mortgage but potentially bad news for the pound. Historically a rate cut reduces the demand for a currency and hence the price falls, therefore any indication of this may lead to a continuation of the recent trend and a move towards 1.24.
To discuss your options and the many different contracts we can offer, including the use of a forward contract (proving very popular in the current climate) where for a nominal deposit your rate can be fixed and guaranteed for up to one
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Best exchange rates for cable
GBP/USD exchange rates or commonly known as cable (derived from the transatlantic cable linking the UK and US enabling messages with currency prices to be transmitted between the London and New York exchanges) has remained range bound between 1.55 – 1.57 the past week, a trend I feel may well continue. Again todays Bank of England inflation report could hit the pound and a move towards 1.55 seen if more QE or a rate cut is discussed, however overnight we had a speech from the Federal Reserve Chairman Ben Bernanke. In the press conference he gave little insight as to whether further QE would be implemented and as a result this morning we have seen the dollar strengthen already.
Loonie
Canadian dollar exchange rates, as with many currencies, have recently been strengthening against the pound. We are currently sitting at 1.56, just 2 cents shy of the 52 week high. Recently the loonie (named after the common loon, a bird which is well known in Canada) has been closely tracking the moves of the USD and the two (USD/CAD) are currently sitting just shy of parity. With the US being Canada’s largest trade partner any moves from the US can directly impact the CAD and with Bernanke’s speech painting a mixed outlook for the US economy this may cause a slight weakening of the CAD in the coming weeks. For anyone with a shorter term requirement we have Canadian unemployment figures released on= Thursday. Figures are expected to show a small increase and this may create a small window of opportunity for CAD buyers, contact your broker to make secure you secure the best exchange for your dollars.
What now for the AUD?
The Aussie is continuing its assault on the currency markets just shy of reaching record highs against the pound and euro and with little signs of stopping. Should you need to buy AUD watch out for Australian unemployment figures on Thursday. As with Canada, figures are expected to show unemployment rising and therefore could create a short term buy opportunity for those in a position to take advantage.
To discuss my opinions and any upcoming currency transfer you may have then please contact Mike on mgv@currencies.co.uk or call 01494 787478. As a specialist curency broker we have a number of tools available to maximise your currency exchange and in this volaitile market it is important to have up do date market insight and knowledge to maximise your currency exchange.
Pound Euro fairly flat today – Further drop against U.S Dollar and a welcome climb against the Australian Dollar, New Zealand Dollar and South African Rand
The Pound has had a mixed day of trading so far staying fairly flat against the Euro during a week of gains, dropping away against the Dollar as investors plunge back into safer havens.
We also have seen fairly good gains against the Australian Dollar following poor unemployment figures overnight and the prospect of seeing poor GDP figures for China tomorrow, which may lead to a great end to the week for those in the process of emigrating either currently or in the near future.
The Pound has once again had a poor run against the so called ‘riskier currencies’ such as the Australian Dollar, New Zealand Dollar and South African Rand and could really do with making a fightback, tomorrow hopefully may be the catalyst for this. Personally I feel we aren’t far away from another front page European ‘crisis’ subject and that alone may push these currency pairings back in the right direction again as half the reason we have been held back is due to the fact that although all has far from gone quiet on the European crisis front there is a little bit of certainty surrounding the situation.
Global certainty tends to strengthen the riskier currencies and can weaken the Dollar so another big spanner thrown in the works surrounding the European situation could lead to further Dollar strength and a buying opportunity for those with an interest in AUD, NZD and CAD.
We don’t only pride ourselves on a great exchange rate but also a really high level of service too, which you may find you aren’t getting to a high enough standard at present.
I deal with bank to bank transfers ranging from one thousand Pounds to multi million Pound transactions for both private clients and corporate clients… We have a regular payments facility too which is free and can assist anyone with smaller payments to Europe.
The company I work for is FSA registered and Authorised as a payments institute and all funds are kept in client transaction accounts to give you peace of mind your funds are safe and secure, we have won awards both for our ezxchange rates and customer service and have now 45,000 clients under our wing.
If you feel I could be of assistance to you as well, feel free to get in contact with me directly by emailing me djw@currencies.co.uk or you can indeed take two minutes to register for free to get a no obligation comparison in advance of your next transaction by clicking here: www.currencies.co.uk/referral.asp?F_ID=1215
Pound Sterling exchange rates drop against many majors however still stuck in a range against Euro – What will happen next?
Economic data releases out this week have not been particularly favorable for the U.K and indeed the Pound. We had Public Sector Net Borrowing which was not great, followed by mortgage approvals data yesterday and GDP figures this morning for the U.K neither of which were exactly positive.
We have dropped a little over the week against many of the majors such as the USD, AUD, NZD, CAD and ZAR however rates against the Euro have remained steady and have pretty much been trapped in a range of around 0.7% movement between high and
low all week.
Today and tomorrow we have a European summit (yes yet another one) which has once again been billed as the potential savior or end of the Euro, as major European ministers will be discussing how they plan to tackle this fine mess they have
found themselves in.
At any point anything may be released over the next 48 hours, if it is another fantastic resolution then expect potential Euro strength and if it is bad news or news that the ministers are arguing and just not getting anywhere then the Euro may find life a little difficult in the coming days.
The key thing to remember is absolutely anything may happen at any time, and this won’t just effect the Euro but it will also affect all of the major currencies as it will effect investors attitude towards risk, so expect some volatile movements for the USD, AUD, NZD, CAD and ZAR too.
If you have a currency transfer to carry out it may be prudent to consider your options and ensure that you have a proactive currency broker on your side if you are not already using me. If you currently do not use a currency broker or you feel you could get a
better price or level of service than you are currently getting then by all means feel free to email me directly and I will be happy to personally help you for any currency transfer from smaller transfers of one thousand Pounds plus to
multi million Pound transactions. I can be reached on djw@currencies.co.uk and i look forward to hearing from you.
