Pound Sterling Forecast

This week is sure to be a lively one, below is what is due out and what I feel may happen:

This morning – Inflationary data has been released for the U.K (09:30am)

13:30pm Retail Sales (USA) – One for those with an interest in the Dollar this afternoon with Retail Sales figures being released. Many top analysts still believe the Dollar will launch a fight back in the coming weeks and months, and some believe the Dollar will have a strong year (making it more expensive to buy). Expectations for this release is an improvement and personally I feel the release will be good, but not quite as good as expected however this isn’t a huge release so no major market movement expected from this one.

21:45 Retail Sales (New Zealand) – This one will effect the ever strong New Zealand Dollar, which has had a great few months (Not so great for Britons with money to shift over there). The data covers the last quarter of 2011 and expectations are for a drop, this may lead to a short term spike against the new Zealand Dollar however in my opinion unless we see real global uncertainty again soon the the NZD will stay reasonably strong.

23:30 Consumer Confidence (Australia) – A late release for Australian Dollar followers which will show the confidence levels of individuals have in the economy and how things are going in Australia, many clients I speak to say all is not as rosy as is being made out over in Australia unless you are in the mining industry, but lets see what this brings, personally much like the NZD I feel the AUD will stay strong unless something major happens worldwide.

Tomorrow 08:00am (German GDP) – A key indicator as to how the largest economy involved in the Euro is performing, this is followed up at 10:00 by GDP data for the European Monetary Union. A bad release for Germany may indicate that the worst is yet to come as the EMU is expected to release a negative figure for Q4 of 2011.

Tomorrow 09:30am (U.K Unemployment) – A flurry of unemployment data for the U.K which is not expected to be too good (yet again). If you have Pounds and wish to buy a foreign currency it may be prudent to seriously consider your options before this release.

10:30am – (Mervyn king’s speech) Mr King seems to be very good at making the Pound weaken, whether it be on purpose or not  and those that have tracked Sterling over the past few years will indeed be well aware of this, certainly one to watch with interest… In my opinion Wednesday will be the most volatile day and I expect it to be poor for Sterling.

Thursday – Overnight (Australian Unemloyment Rate) No huge changes to unemployment expected in Australia however as always expect the unexpected in this market!

09:00 – ECB monthly Report - The European Central bank will release their monthly report on Thursday morning, this will give an indication as to how they plan to deal with the economy in the coming monthand what has happened in the past month, we may see a hint as to whether or not we can expect another cut in interest rates as has been mentioned of late, if this is mentioned with an indication for next month, we may see Euro weakness following it.

Friday 09:30am – U.K Retail Sales (January) How well did the retail sector perform after Christmas, I feel the U.K tightened their belts during this period and it would not surprise me to see another poor start to the day for the Pound.

12:00pm Canadian Inflation data – The Bank of Canada release inflation data at noon, slight rise to 0% is expected and any change from this could lead to movements either way… again we do appear to be range bound against this currency however I feel that sub 1.55 is just around the corner unless the U.K can bring us an unexpected good week.

13:30pm U.S Inflation- Inflation time for the States to round off the week, personally I feel this won’t be a big one for the markets unless something major is thrown into the mix.

In short I think the Pound will find it tough this week, if you have a bank to bank transfer to make from sterling to a major currency or from a major currency to Sterling then contact me directly djw@currencies.co.uk to make sure you really are getting the best exchange rates for your transfer along with the highest level of customer service and efficiency. I look forward to hearing from you.

Halfway to recession?

Yesterday morning saw the release of U.K GDP (Gross Domestic Product) figures for the fourth quarter of 2011 released and unfortunately they did not make great reading for the U.K. Gross Domestic Product figuresshow how much an economy grew or contracted in that particular period and the prediction was for the U.K economy to have shrunk by 0.1%

The figure actually came out at -0.2% which doesn’t sound a lot but it does however mean we are indeed closer to a recession than many had first thought.

An economy is officially in a recession when it has two consecutive quarters of negative growth and with the U.K ending the year with one there is every chance now we could start the year with our second and the Pound may drop accordingly.

We will not find out the results for Q1 2012 until April – but if indications are there that this may be negative then Sterling exchange rates may find the next few months very tough – So far in the U.K we have managed to dodge any serious winter conditions, such as the weather we saw this time last year however should it come back and the economy take a hit accordingly then this may be enough to tip the balance.

Of course there are various problems globally that will no doubt hold back many other major currencies, The Euro Zone is also expected to drop back into recession territory as a whole at points this year so there will no doubt be various buying and selling opportunities along the way. Call us today on 0044 1494 725353 should you have an upcoming requirement and let us be that extra pair of eyes and ears on the market for you.

BOE Minutes – How will further QE affect the Pound?

The Bank of England minutes were also released yesterday and the results of which are probably why the Pound did not take a nosedive yesterday. All nine members of the BOE voted in favour of interest rates staying on hold and also, which is key the (QE) stimulus plan to be left on hold for the time being. It looks like the market had slightly priced in further QE in the near term and the fact that not one member was in favour right now should delay further stimulus for another month or two.

When more money is pumped into the economy it generally does weaken the Pound, and regular readers will be aware the mere mention of this does lead to weakness for the Pound, so be aware this will be a hot topic in the coming months.

Federal Reserve minutes and Dollar Exchange rates

Last night the Federal Reserve released their minutes from the first interest rate decision of the year in the U.S. They also tend to comment on economic conditions and how they plan to tackle their economic problems going forward.

In a Statement the Fed state that they expect interest rates to remain extremely low until late 2014 which did weaken the Dollar slightly shortly after the release. Interest rate hikes generally make a currency more attractive to investors and the fact they are planning to keep this low for quite some time may put investors off of putting their money into the USD.

I personally still expect the Dollar to perform well this year due to the problems globally, if you have Dollars to purchase this could be a great opportunity for you as it wouldn’t surprise me to see the GBP-USD rates below 1.50 in the next six weeks.

However, in a press conference later on last night some slightly positive news for Dollar buyers was the fact that Ben Bernanke had stated that the Fed would still be prepared to inject financial stimulus in the near term, which has opened up the door for QE3 in the U.S. This has been expected for some time though so I do not expect this to weigh too heavily on the Dollar.

KEY DATA WATCH: U.S  GDP Data Tomorrow at 13:30pm – This data could lead to a volatile end to the week as it is a key indicator as to how the U.S economy is performing. Expectations are for a reasonable jump in the right direction which could round off the week on a high for the Dollar.

RBNZ Interest Rate decision

The Reserve Bank of New Zealand kept interest rates on hold last night, giving the NZD a little more strength overnight. NZD rates are (like the AUD) closing in on the lowest we have seen in years and there is no guarantee they will be shooting back up again soon, with interest rates staying high and economic data fairly solid you may have quite a wait on your hands if you are awaiting a large movement back.

Data that may affect the Pound Today

Today is extremely quiet on the data front for the Pound and most majors, however do be aware that at any point we could hear news on the Greek debt talks. If so called ‘positive’ news comes from the talks then going on previous movements we could see some Euro strength pushing the Pound back below 1.19 and back out of arms reach of 1.20.

To give you a quick background, we are currency brokers and have been in the industry for years, this site was set up set up two years ago to give clients simple but informative information and now have 20,000 people a month stop by for information.

Last year we had thousands of people get in touch with us through the site, of which hundreds have already used us and we have saved them money over their high street bank or current broker, you can get in touch with us by clicking here and setting up a free, no obligation trading facility to get a quote within minutes….

There is no harm in comparing rates even if you have used someone else for years – Just like buying car insurance you need to always shop around. You can also email me directly djw@currencies.co.uk with any questions or queries.

I look forward to speaking with you.

Good morning readers, overnight we saw the Chinese GDP (Gross Domestic Product) data come out much better than expected, with China being a major factor to the continuing positive charge from the Australian Dollar  this has pushed the AUD to new highs.

Hello to you all on this reasonably quiet day on the markets (compared to last week anyway)

The most important releases for those with pending currency transactions are towards the end of the week, however as always with the current global situation all sorts of surprises may pop up in the meantime.

Today saw slightly better than expected data for Europe first thing, which has led to a little bit of rare Euro strength in morning trading, and the rest of the day of going to be reliant on sentiment and speculation as to where the rates will close up.

Overnight we have some house price data for the U.K, I highly doubt this will bring a shock upon opening my eyes in the morning and the rest of the day is a bit of a non event on the data fron too.

On Wednesday, the Federal Reserve Beige book will be the main talking point. The Federal Reserve is essentially the U.S version of our Bank of England monetary policty commitee, and the Beige book is a report of the economic situation in the U.S and may give indication as to how they plan to deal with matters going forward, any spanner thown into the works in this report could lead to a volatilie Dollar rate on Tuesday evening and Wednesday morning.

Thursday in my opinion has the capacity to be the most interesting day and potentially the most volatile, we have a host of Manufacturing and Production data out for the U.K at 09:30am closely followed by Europe releasing the same information at 10:00. At 12:00pm the Bank of England will announce their interest rate decision and although no change in rates is expected any mention of QE (Quantitative Easing) could lead to rapid Sterling weakness, I doubt we will here a mention of it but calls for further QE are increasing you it is still a danger. At 12:45pm The Euro Zone announce their rate decision too, there have been mentions of yet another rate cut for Europs bringing interest rates to record lows of below 1%.

A cut in rates generally weakens a currency as it makes it less attractive to investors, likewise a hike in rates usually leads to strength.

Friday is inflation day for the U.K and at 09:30am we see our Producer Price index out, I doubt this will have a huge effect on rates unless much different than predicted.

To give you a quick background, we are currency brokers and have been in
the industry for years, this site was set up set up two years ago to give
clients simple but informative information and now have 20,000 people a month
stop by for information.

Last year we had thousands of people get in touch with us through the
site, of which hundreds have already used us and we have saved them money over
their high street bank or current broker, you can get in touch with us by clicking
here and setting up a free, no obligation trading facility to get a quote
within minutes….

There is no harm in comparing rates even if you have used
someone else for years – Just like buying car insurance you need to always shop
around. You can also email me directly djw@currencies.co.uk
with any questions or queries.

I look forward to speaking with you.

The Pound has once again this week been fairly range-bound against the Euro as neither currency has managed to put it’s right foot forward and take command in this strange market… Against the Dollar however we have had an extremely volatile week so far and i’m sure the Non-Farm Payroll data (unemployment data) due out tomorrow afternoon will not be a quiet one either to wrap up the week.

Again uncertainty had been the key in early week trading with the Dollar slowly gaining ground and looking liee it may continue to with minor force then out of nowhere we see yet another surprise pop up yesterdaywith the Central Banks agreement to pump some liquidity into the financial system in a bid to get things moving again. This bought some confidence back into the markets, stocks and shares soared and we also saw a large Dollar sell off leading the Dollars becoming cheaper to buy.

Following the usual pattern of late, the ‘riskier’ currencies also found some huge force as investors looked to get involved with them, increasing demand and meaning that currencies like the Australian Dollar, South African Rand and the New Zealand Dollar bit back with a vengance.

Tomorrow non farm payroll data will set the scene for afternoon trading, with the liquidity boost and such rapid currency movements following it, this does suggest that if you do have transfers to carry out you must make sure you protect yourself from unexpected and rapid adverse market movements. A tool we offer here is a stop-loss which does exactly that. Feel free to contact me directly on djw@currencies.co.uk and I will be happy to explain exactly how it works and assist with any currency transfers you are looking to carry out.

I look forward to speaking with you.

The table below shows the percentage movement of exchange rates on Friday along with the extra foreign currency you could have bought if buying with £200,000 catching your rate at the right moment.

Ongoing European crisis, global uncertainty and what it means for your currency transfer

EU Finance ministers met over the weekend and will be in discussion most of the week to finally try and come up with a resolution to a problem that appears to be spiraling out of control across Europe. Greece will need a second bailout, European banks need to be recapitalized to cope with Greek debt exposure and numerous economies are desperately trying to bring in cuts to take their expenditure below GDP.

Many economies within Europe have large exposure to Greek debt and if Greece is allowed to fail, many others may slowly follow suit. In my opinion the meetings this weekend and that we have seen after the last few months are only going to bring in temporary solutions and that inevitably at some point, finance ministers will have to throw in the towel and stop throwing money into the Greek black hole.

No headline deal has been announced however so far on Saturday ministers announced that €110 Billion of new capital must be raised by European banks to cover their loans to indebted nations, as the EFSF (European Financial Stability Fund) quite honestly has too much to deal with trying to prop up Greece, Italy, Spain and Portugal – To be kept up to date with the very latest releases and market movements get in touch by filling in the enquiry form on the right hand side of this page and let us be the eyes and ears on the market for you.

If you have a requirement to buy or sell Euros this week then you should ensure you are protected against adverse market movements by means of a stop loss order. An announcement can be made at any time and we will be sure to be receiving constant updates over the first few days of the week leading to a volatile time for the Euro.

Personally I feel there may be a few spikes for Sterling against the Euro this week, however like in the past once the meeting has ended and a new apparent fantastic approach to resolving the problems has been announced the Euro may strengthen considerably, putting us back down to 1.13 by the end of the week. If you get the chance to buy when the mid-market level is above that, then in my opinion I would be highly tempted. Contact us today by filling in the enquiry form on the right hand side of this page should you be worried about what the week may bring and one of our experienced traders will be happy to explain the various options available to you.

U.S credit rating downgrade again?

An interesting report I read over the weekend suggests that the U.S are in for another credit rating downgrade before the end of the year, according to the Bank of America. Ratings agencies had previously said that if congress did not have credible solutions and policies in place regarding debt problems in the states then this is something they would have to look at, and a downgrade could happen as soon as November.

Although you may think this would weaken the Dollar, the downgrade we saw for the States last time led to Dollar strength, probably as it heightened global uncertainty and in risk-averse times the Dollar is still one of the frontrunners as a safe haven for investors to place their funds into. One other note of caution is the saying on the market that when the U.S sneezes the U.K catches a cold, so how much longer will we indeed hold on to our top rating and what effect will that have on the Pound…. Surely a negative one?

Sterling forecast – the week ahead

Without a doubt the most important release on the financial markets this week will be the result of the current European summit, this will affect all currencies worldwide as it will change attitude to risk and potentially paint the picture as to where the world economy will be in the lead up to Christmas. Personally I feel the result will lead to immediate Euro strength and the antipodean currencies (AUD,NZD,ZAR) will also gain against the Pound as for the time being as investors will still be willing to get invest in the riskier currencies, increasing demand and making them stronger.

Cable (GBP-USD) is expected to plummet by top foreign exchange information site FX Street, however I feel that this week we could temporarily break the 1.60 barrier for the final time this year and we see key Gross Domestic Product figures out for the States on Wednesday at 13:30pm.

There are numerous interest rate decisions throughout the week with Canada, New Zealand and Japan all expected to keep rates on hold, any changes to expectations may lead to high volatility, be aware too that the markets are on alert for Japan to move to devalue the Yen and the interest decision overnight on Tuesday may be the ideal time for them to do so.

In short, an extremely volatile week ahead beckons for all major currencies and those in a position to act fast will benefit from opportunities that may arise, keep in close contact with your account manager and if you know you have an imminent requirement then email me djw@currencies.co.uk and we will be more than happy to assist you.

If you have any questions or queries regarding anything in this report then please do feel free to email me djw@currencies.co.ukor fill in the enquiry form on the right hand side of this page..

Good morning all,

This weekend could well be key for the strength of the Euro as top European members are meeting in Brussels to attempt to find a solution for Greek debt and the general problems within the Euro Zone (haven’t we heard this one before?) It has been commented on this morning that we may now have to wait until Wednesday before we see any real results from this meeting, it wouldn’t surprise me to see this delayed again next week however what this does mean is that investors may well be a little cagey surrounding the Euro in the coming week, so expect some market volatility and some great buying and selling opportunites.

If you have an upcoming requirement, it may be prudent to look at placing a limit order or indeed a stop loss, this is where you can set a target rate, or a worst case scenario and should this rate be achieved at any point day or night your currency will be bought out automatically. There is no cost for this tool and it comes in extremely handy for those with hectic lifestyle and busy schedules that do not have the time to look at rates 24 hours a day, believe me… it can take over your life!

This morning we saw fairly positive news for the Pound as Public Sector Net Borrowing figures were slightly lower than expected, meaning the Government isn’t going mad on spending at present however this hasn’t really had too much of an impact in the market so far.

The misery index (calculated by adding inflation and unemployment) is atthe highest point in the U.K in 19 years and the U.S for 28 years! This just goes to show worldwide there is a rocky road ahead and a lot of money to be made and lost in upcoming currency transfers so make sure you are one step ahead at all times and protect yourself from adverse market movements.

On an seperate note, Pound Sterling Forecast has just been named in the top 25 Corporate Finance Blogs in the country and my twitter (@currencyinfo) has just been named number 8 in the country for corporate finance (Joint place with David Smith of the Sunday Times) so do feel free to follow me and indeed to tell all of your friends about this site and I will continue to update it with unbiased and simple updates on the markets that will hopefully  help you make the most of your money.

I am actually a currency broker as well at http://www.currencies.co.uk/ – If you want me to assist you personally with any currency requirement be it Corporate or Personal then contact me directly djw@currencies.co.uk and I will be happy to deal with you for any requirement from £1000 – £10,000,000 as long as it is a bank to bank transfer and I can assure you that I shall get a great rate of exchange and the customer service will be second to none.

I look forward to hearing from you.

It is very pleasing to see that from a mere information site I started up last March www.poundsterlingforecast.com is now getting over 20,000 unique visitors a month, I hope if you are a regular reader that you have found the information useful and it has helped you save money on any currency transactions you may have carried out.

I work for a specialist foreign exchange brokerage (regulated by the FSA and authorised as a payments institute) and we have recently been named ‘best exchange rates’ in the Daily Telegraph’ along with winning the same type of award three years in a row in the Sunday Times. I do not only pride myself on getting great rates of exchange but also the service to compliment the rates too.

Feel free to take a look at some testimonials on my Linkedin profile here under recommendations: http://www.linkedin.com/pub/daniel-wright/14/985/862

Should you have an upcoming transfer to make then feel free to contact me directly by emailing me djw@currencies.co.uk or calling 01494 787 462 during U.K hours 8am – 6pm and ask for myself (Daniel Wright) directly quoting www.poundsterlingforecast.com and I will be happy to explain the service, the rates we can obtain and just exactly how the whole process works.

I look forward to hearing from you, on another note of extreme importance we have the Bank of England minutes out at 09:30am this morning, do watch out for follow up posts later in the day to explain exactly what has happened and why.

My clients continue to ask me just what will happen to the Pound against the Euro and in truth, like major analysts worldwide and the majority of people if I am completely honest you just cannot be completely sure.

What you shoud be doing in this current market is looking at it from an investors point of view, why would you look to invest in either?

The Euro Zone has plenty of problems, and I am still of the opinion that at some point (could be weeks, months or even years the way things are going) something is really going to blow up within the European economies, we have seen signs of it and clearly that things are bad… but there is certainly room for them to get a whole lot worse.

Everything that the European Central Bank are throwing at the problem appears to be a short term fix, and when they run out of options I am sure we will see failures and the Euro weakening considerably as a result. This would stop me being that interested in the Euro as you never know quite when this will happen.

On the plus side for the Eurozone, they have raised interest rates twice this year, an interest rate rise is generally seen as positive for the currency concerned and a cut negative, so this has made the Euro more attractive to investors and in my opinion is the main reason it has kept strong, along with the Chinese and Swiss purchasing large amounts to up reserves and davalue their currency respectively

The U.K on the other hand has not even considered raising rates this year, and may not next year if inflation continues to naturally drop away- this will hold the Pound back in the short term I am sure of that.

What does not help is data releases in the U.K being fairly poor, our Misery Index (inflation times unemployment) being at the highest point in 17 years and our own people deciding to smash their own home towns and cities up just a few weeks ago… the cost for this further down the line will be huge and will surely effect the strength of future economic releases.

My overall opinion is that this pairing will continue to stay in this range as they battle to be best of a bad bunch with the Dollar, what you need to do if you are buying is wait for a small spike in the market and jump on it, before rates get a chance to go back down again.

I can help you save money either way when you do want to buy or sell currency, along with offering fantastic customer service, contact me today djw@currencies.co.uk or fill in the enquiry form on this page

Global Shares fall most notably the banks

The FTSE fell by the highest amount in 12 years yesterday, bank shares and indeed many others tumbled worldwide as investors continued to seem worried about the current worldwide situation. In cases like this you tend to see investors head for a ‘safe haven’. Currently gold (priced in Dollars) and the Swiss Franc are favourites, and both gained further ground yesterday. Interestingly, the Pound had a fairly good day too against the Euro and many other majors, it appears although the best of a bad bunch, heads are turning towards the pound leading to spikes in the market on days such as yesterday, I’m sure it will only take a few poor data releases for investors to shy away again, so in the current market taking advantage of a spike is key.

Overview and forecast for Sterling against the majors

With a reasonably quiet day ahead on the data front I thought I would give you a brief update on what is going on in the volatile markets and what we may see ahead.

GBP/EUR – The Sterling-Euro pairing has been relatively range bound of late, however this doesn’t mean this will be the case going forward. There are just so many factors affecting both sides at the moment that it is hard to know just where we will be in a few weeks time let alone the next hours trading. It appears that the ECB are willing to throw everything inclusive of the kitchen sink into helping the Euro survive and stay strong, whilst the BOE are in no rush to be raising interest rates for quite some time, Barclays in fact changed their rate hike expectations to August 2012 yesterday. In short, I don’t expect major movements for this pairing however there will no doubt be some great buying and selling opportunities in the coming weeks. In order to ensure you are in the best possible position you should make us aware of your requirements on 01494 787 462 so we can explain the various options available to you inclusive of limit and stop orders.

GBP/USD – The Pound came close to TWO YEAR HIGHS against the Dollar this week following some hawkish dissent from one of the Federal Reserve policy makers on Wednesday. He had mentioned that he felt the U.S would have to raise rates before mid 2013 and that growth forecasts should not be as high as they are. This led to a short term spike on Wednesday afternoon and a great chance for clients with an open trading facility with us to lock in to a fantastic level of exchange. America isn’t in great shape but as the saying goes when the U.S sneezes the U.K catches a cold so be aware we could have just as many problems around the corner too.

GBP/AUD/NZD/ZAR - The pound has seen great gains against all three of these more volatile currencies, as the risk appetite for investor’s decreases and they seek to unwind carry trades. Carry trades are where an investor borrows money in a currency with a very low interest rate (GBP,JPY) and shifts the funds to a currency with a very high interest rate (AUD,NZD,ZAR) making their return on the interest differential. When we see the unwinding of carry trades, you can see a snowball effect like we did in the past two weeks and very large movements over a period of days. Sterling is around 10 cents better now against the AUD and NZD and also roughly 7% better against ZAR than a few weeks back.. That is £14,000 difference on a £200,000 purchase!!

Once again this highlights the importance of letting us know your intentions, we can watch the markets for you and highlight movements like this meaning you do not need to have your own eye on these volatile markets all the time as I’m sure you have plenty to do all day yourself. make an enquiry  today and one of our friendly and experienced brokers will call you bac, more than likely me personally.

GBP/CHF - Without a doubt the most volatile currency against the Pound on the markets at present… I have many clients who have Swiss Franc mortgages and are finding each month increasingly harder as payments soar alongside the Swiss Franc. The last week or so has been a little better for you with the Swiss national Bank stepping in to devalue the currency however be aware this may not last too long… this is why. The Swiss lost CHF21 Billion last year trying to devalue their currency, and cannot afford to keep on throwing money down the drain like this, there comes a point where they have to realize that the only thing to save the Francs increasing strength is a better risk environment and investors being more prepared to take on riskier propositions. We should still see increasingly volatile movements as the ongoing attempt to devalue continues, and the momentum of the CHF keeps pushing it back.

Public sector net borrowing today

This morning sees the release of Net Borrowing figures in the U.K and this can indeed be a key release. It essentially confirms exactly how much new debt is held by the Government and predictions can be quite a way out. This morning expectations are for £0.2Billion compared to £11Billion last month, a lower figure may be seen as positive for the pound and a higher one negative, it would not surprise me to see slightly higher than expected and the Pound to lose a little ground in early morning trading so it may be prudent to contact me on djw@currencies.co.uk  first thing if you have an upcoming transaction to carry out.

If you have any questions or queries regarding anything in this report then please do feel free to email me djw@currencies.co.uk or call 01494 787462