Tag Archives: currencies
Bank of England minutes this morning, what impact will this have on the pound? (Mike Vaughan)
Today, as the country pays its last respects to the Iron Lady, the Bank of England will release its latest minutes from the interest rate decision held at the beginning of the month. The minutes are widely scrutinised for any clues as to future monetary policy and in particular whether the bank is considering further QE (Quantitative Easing). It is my view that the bank will not consider any QE in the short term and I hope the pound may have a positive day as a result. Of course any indication that QE will be considered again and the pound could fall across the board against the majors – for this reason today could prove very volatile.
For me the Bank of England will hold steady on any radical policies until the result of the latest GDP figures on the 25th April are released. This will officially confirm whether the UK has avoided recession, and I feel the result will be very close. With the NIESR (National Institute for Economic and Social Research) just last week forecasting revised figures of 0.1% I am confident the UK will scrape through and we may see sterling strength as a result. I would hope to see GBP/EUR moving towards 1.18, GBP/USD towards 1.55 and GBP/AUD breaking the 1.50 barrier.
IMF cuts global growth for the fourth consecutive time
Yesterday the International Monetary Fund (IMF) headed by Christine Legarde reduced its global growth forecast and urged European policy makers to use “aggressive” monetary policy as a second year of contraction leaves the euro area’s recovery lagging behind the rest of the world, its then stated it felt the global economy to grow a further 3.3% this year, less than the 3.5% forecast in January, after 3.2% growth in 2012 – this beings its fourth consecutive reduction in a row. The market didn’t react a great deal, as this news is of little surprise due to the state of much of the economic world, however it still is not particularly positive.
China’s growth forecast, is this a concern for the global economy?
Although figures from China were poor they are still considerably higher than much of the developed world, however signs that China is slowing may give cause to concern for the commodity based currencies such as the AUD and ZAR. Following the reduced forecasts the AUD weakened over 1.5% and the ZAR over 2.5% against the pound, a trend that may continue, all be it on not such a heavy scale. Figures for GBP/AUD are the best in nearly 6 weeks (1.4850) and GBP/ZAR has reached above 14 – I would expect those buying these currencies to get better opportunities in the next few days but these levels may not hang around for too long.
Should you have any upcoming money transfers to arrange and you have found this blog useful then why not contact us to see what we can do for you? The purpose of the site is to give you independent market views to help you make an informed decision with your currency exchange. By giving yourself as much information as possible it can put you in a far stronger position when attempting to maximise your currency exchange, allowing you to limit your exposure to adverse market movement.
To find out more about the specialist currency service we provide, whether you are a private or corporate client, then we can help. Please get in touch either on 01494 787478 or by emailing me with a brief description of your individual requirement and I will happily contact you and run through your options. You can reach me direct at mgv@currencies.co.uk
Important day for all markets today – bank of England interest rate decision and European Central Bank interest rate decision to be of interest for all currencies including GBP EUR USD AUD NZD CAD CHF ILS PLN and all majors as attitude to risk may change
An important day on the markets today for all those with currency requirements in the near future as we have both the Bank of England and European Central Bank interest rate decisions due at 12:00opm and 12:45pm respectively.
No change in interest rates is expected although there is a minor chance of a surprise cut the important factors however is that we could see key announcements of comments shortly following the decisions.
The Bank of England seem to be very good at weakening the Pound and any mention of further QE (Quantitative Easing) may lead to Sterling weakness or indeed any other spanners thrown into the works for the U.K economy.
Shortly after the European Central Bank interest rate decision we have the ECB press conference which should be key for those with interest in all major currencies. The reason that the Euro has gained back a lilttle strength, currencies such as the AUD, NZD and ZAR have also strengthened and the USD weakned against the Pound over the start of the week is the fact the head of the ECB (w3ho will be heading up the press conference) made extremely positive comments about the Euro and how he plans to do everything he can to save the Euro going forward. These comments sent bond yields tumbling away from the worrying 7% level for Spain and Italy and meant that investors had a better attitude to risk suddenly, meaning they get involved in riskier investments and pull funds out of the ‘safer haven’ currencies such as the U.S Dollar.
I expect that Mario Draghi will not have changed his stance over the past few days and we could see another Euro positive press conference this afternoon, leading to potential strength for the Pound against the Dollar and weakness against a basket of other majors inclusive of EUR, AUD, NZD and ZAR. Of course anything can happen in these decisions and conferences and there is a lot going on behind closed doors at the moment but if you have a transaction to carry out it is key you have a proactive currency broker on your side.
Should you have a bank to bank currency transaction to carry out either imminently or in the future then I can personally help you. I deal with private and corporate clients and offer not only award winning rates of exchange but an award winning level of customer service to match. Email me today djw@currencies.co.uk if you would like assistance and I shall be more than happy to call you back, If you just want updates for now then feel free to join our mailing list by filling in the form at the top right hand side of this page.
Sterlings worrying forecast
Generally sterling has been gaining this week against most currencies, as regular readers will be aware, this is due to investors using the Pound as a safe haven for their cash. However GDP estimates fell yet again his week, June’s NIESR GDP forecasts fell back to -0.2% from +0.1% in May. This is now the fifth month this year, (out of six readings,) that has shown that the UK economy has contracted.
The Bank of England is well aware of the struggle which is why additional Quantitative Easing (QE) was announced last week, increasing the total target to £375 billion! Still, loose monetary policy seems to have proven ineffective around the globe and as a result I personally would not be surprised to see further QE being announced in the future. (QE is the printing of money, the theory is it makes banks lend more which increases growth, however as more money is created it value falls, normally QE weakens a currency.)
This is more of a long term worry for clients, in the shorter term I personally would not be surprsied to see GBPEUR climb further. So good news for buyer, but why?
Well this week has already been a busy week for the Euro as Financial ministers meet in Brussells for a 2 days meeting. The big news was that covered in yesterdays blog that Spain is receiving a “banking bailout,” but in my optition they are joinging the majority now that have had a bailout; Greece, Ireland, Portugal and Cyrpus. That is why we are where we are at a near 4 year high. The reason why I think there is more to come is due to comments make from italy. Their prime minister said that he would be open to also receive a support package to lower the countries borrowing. If this was confirmed I would think GBPEUR rates could push up to 1.30!!!!!!!
If you are in a position reading these blogs looking for the time to trade, I think it is very close! Now is the time to contact us if you need assistance…. Contact me personally by emailing me at hse@currencies.co.uk I look forward to hearing from you.
With the Greek government finally forming a coalition will market confidence increase? Forecasts for USD, AUD, NZD and ZAR
As news emerged yesterday that Greece has managed to form a new coalition government, will this lead to an increase in market confidence? Personally I think yes. The new conservative led government headed by Antonis Samaras officially took power on Wednesday ending weeks of uncertainty that has rattled financial markets and I believe this may now lead to an increase in investor confidence and a potential drive towards the so called ‘risky’ currencies.
This could be good news for those selling currencies such as the AUD, NZD or ZAR as I personally believe investor demand and risk appetite for these currencies is likely to increase and hence their value will increase. I would expect GBP/AUD to fall towards 1.52 territory, HBP/NZD 1.95 and GBP/ZAR 12.85. As a result we may also see a move away from the relative safe haven of the US dollar and I can see the cable rate continuing towards 1.60 and EUR/USD towards 1.28. Should you have a currency requirement involving any of these pairings and you would like to discuss my thoughts in more detail then please email Mike at mgv@currencies.co.uk
Cable rates also fall as the FED say no to ‘QE3′
GBP/USD rates fell yesterday as the Federal Reserve decided against launching the much anticipated ‘QE3′ as many analysts had expected. Instead the US government has decided to extend ‘Operation Twist’ a bond buying programme aimed at lowering long term rates and to stimulate growth. This gave the dollar a small boost in yesterdays afternoon session, rates have continued in this manner this morning – although for the reasons I have mentioned above I still feel a move towards 1.60 likely.
As my colleague Daniel mentioned below, the aim of this blog is to give an independent and impartial view on recent market trends and current market conditions. We are also here to help individuals and corporate clients alike achieve the best market price when buying currency. The process could not be simpler and we pride ourselves in achieving top market prices for our clients. Daniel has given a very simple breakdown of the service below however should you wish to speak with me to run through the service in full then I can be reached on mgv@currencies.co.uk or by calling 01494 787478
Sterling hits a 33 month high against a basket of currencies on a trade weighted basis, but Euro buyers be wary of the ECB interest rate decision at 12.45
Sterling has continued its recent resurgence hitting a 33 month high against a basket of currencies on a trade weighted basis. This has included a notable high against majors such as the Euro (a 22 month high), US dollar (7 month high), AUD and NZD (year highs). To me these must represent some fantastic buy opportunities and may well come as a welcome relief to many. For those with an upcoming requirement involving Sterling watch out for UK PMI for the services sector at 09:30. The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector and captures an overview of the condition of sales and employment. Figures above 50 show expansion and below contraction, we are expected a release of 54.2 showing expansion but these would be down on April’s figure of 55.3 so may cause the pound to weaken a touch. We have also seen Nationwide house price data released overnight with figures falling from 0.5 to -0.2% – possibly why the pound is down against most currencies this morning.
ECB Interest Rate Decision
For anyone with an interest in the Euro keep an eye on the European Central Bank and their respective interest rate decision at 12.45BST. Expectations are for a rate hold at 1% but the press conference held by President Mario Draghi at 13:30BST should be viewed with caution. I am sure the situation in Spain will be high on the agenda and clues may be given as to future monetary policy and as to what the ECB projects for the coming weeks and months. Should Draghi take a positive (bullish) tone watch for Euro strength in the afternoon session. Subsequently any negative sentiment and expect the reverse. The period before and after the Presidents speech is a notoriously volatile time, anyone risk averse may well look to avoid this contact Mike at mgv@currencies.co.uk to discuss your transfer and the potential outcomes.
As a specialist currency broker myself and a number of my colleagues regularly post on this blog to assist and help individuals and business’s a like make an informed decision as to when is best to exchange. Through years of market experience we get a feeling as to what data sets affect the market and can help pass this market knowledge on to prospective clients. Ultimately the decision is always yours but should you have an upcoming requirement and would like to run through the data that might affect your exchange in the coming weeks then please do not hesitate to contact me. As well as taking time to write and post on this blog I also work for one of the UK’s largest independent brokers www.currencies.co.uk offering a number of contracts tailored to each individuals requirements. I would be more than happy to discuss these contracts with you and can be reached on 01494 787 478 or email Mike at mgv@currencies.co.uk
Sterling hits a 32 month high on a trade weighted basis against the major currencies
If you need to make a transfer into a foreign currency then now may be the ideal time to seriously consider your options. The Pound is the highest it has been against a basket of major currencies for over 32 months and with the fact that the U.K is technically in a recession you just cannot be too sure that these gains can continue.?!
Sterling Euro
With Spain notably in quite a lot of trouble and plenty of political problems within Europe you would imagine that the Euro is still in for a rocky period. Indeed all the signs are there that the Europeans will struggle in the coming few weeks and pressure will mount. There is no smoke without fire and I’m sure there is a lot more to come out from behind closed doors in the coming few weeks however do be wary.. Rates against the Euro at points today have been the best in 22 months and it is usually those that are greedy and hold out for that little extra that get their fingers burnt.
Sterling Dollar
TheDollar has also weakened of late following negative comments from the Federal Reserve in their latest press conference. Interest rates are set to stay low until 2014 and there is still the potential for further Quantitative Easing which may weaken
the Dollar. Beware though, in times of uncertainty globally (which we would see if European problems kick off) investors tend to run to the Dollar as a safe haven and the Dollar generally strengthens. Gold is also a safer haven and priced in Dollars so this may also increase demand for Dollars making the Dollar gain back ground.
Sterling Australian Dollar and New Zealand Dollar
A potential interest rate cut in the near future may weaken the Australian Dollar once more (an interest rate cut is generally seen as negative for the currency concerned). The Australian and New Zealand
Dollar have both had a tougher time lately as in times of uncertainty investors tend to avoid these ‘riskier’ currencies. Couple that with China slowing down ever so slightly and we may have a little more weakness to come.
Are you getting the best rates of exchange and level of service at present? Do you even compare?
If the answer to any of the above heading is no then I can help you… Even if you just want a quick comparison to ensure that you aren’t losing money on your currency transfers I am happy to give you that. Feel free to email me directly djw@currencies.co.uk having spent years working on the currency markets I can help you both in terms of getting great rates and with timely market updates to help you decide just when to book your currency as even the smallest movement in your favour can make quite a big difference in what quite simply are extremely volatile times.
Currencies.co.uk top the currency tables again… Certainly food for thought – Worth contacting them to compare against your bank or current provider according to the Telegraph – Get preferential rates by quoting Pound Sterling Forecast on your enquiry!!
The Telegraph have released a table of the best exchange rate providers and i’m pleased to say the company I work for has come out top… Please feel free to view the article I have placed the link below, it is also on Yahoo finance. Should you make an enquiry then by quoting POUND STERLING FORECAST you will be put through to either myself or Ben (the authors of this site) and treated with the highest level of customer service whilst receiving commercial rates of exchange as I do for all of my regular readers.
