Tag Archives: GBP Forecast
Sterling crashes as negative sentiment surrounds the Pound, will it’s value continue to decline? (Joseph Wright)
The 52 week lows for Sterling exchange rates have deepened further during today’s trading session, and in the early hours of today’s trading session the marketplace was unsure as to exactly why.
Most are pointing in the direction of trading algorithms, or automated trading to put it simply, after in the early hours of this morning the Pound was sold off extremely heavily before correcting somewhat, although not back to the levels we saw prior to this almost unprecedented move.
The drop against the dollar was the second largest in history after the drop in the immediate aftermath of the Brexit vote earlier this year back in June, so that’s 2 historic sell off’s in this year alone.
Many reading will be wondering whether the Pound will continue to fall from these levels, and it’s looking like there’s a good chance that it will because the fundamentals coming out of the UK suggest the economy is healthy, even improving economic output since the Brexit vote (which the weaker Pound has assisted in some cases). Despite the healthy economy, weak sentiment is driving the Pound down, and investors are quick to react negatively to bad news out of the UK.
The are a number of key financial institutions forecasting a weaker Pound in the upcoming months and years, with HSBC today adding to a number of major institutions with predictions of GBP/EUR parity at the end of 2017. There’s quite some distance to go yet some for those working to a budget or timescale, it may be an idea to remove the risk from the currency exchange.
If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.
Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on email@example.com and I will be more than happy to contact you personally to discuss the various options we have available to you.
Despite the Pound rallying over the past week or so we’ve seen it’s bullish run come to an end today, as the currency has softened by at least half a percent versus both the Euro and the US Dollar.
Economic news out of the UK recently has mostly been coming out considerably better than analysts expectations, and that’s left Sterling sellers with the opportunity to make their conversions at considerably better rates of exchange than would have been available just a couple of weeks ago. Those hoping to capitalise on these improvements may be wise to consider making that move sooner as opposed to later, because as we’ve seen today I’m expecting financial markets to react quickly and negatively to weak economic data out of the UK at the moment due to market sentiments towards Brexit.
Today’s economic update, released by the Office of National Statistics showed that Manufacturing Production contracted by a considerable 0.9% in July, which was disappointing for those hoping the Pound would continue to climb as previous to today’s news release the last set of Manufacturing data we saw (Manufacturing Purchasing Managers Index) was particularly positive.
Moving forward, I expect to see the Pound come under further pressure as despite the recent Services PMI figure posting the biggest gain record (on Monday), we still haven’t seen the Pound test the psychological level of 1.20, and I think after the Pounds recent gains there is likely to be profit taking from market speculators which may drive Sterling’s value down once again.
If you have an upcoming currency exchange to make and would like to discuss it, feel free to get in contact with me (Joseph) on firstname.lastname@example.org and I’ll be happy to discuss timings with you as well as being able to offer award winning exchange rates. If you would like a quote just email me with an outline of your plans and I’ll be back in touch with you as soon as possible.
Unfortunately all the positive thinking in the world will not help move an exchange rate. You can try all manner of methods to try and alter your situation but unfortunately the market is impersonal and does not react for these reasons. Looking at the economic reality sterling has had a slightly better week although in my opinion this is against the grain of a continuing negative decline in the value of sterling. Let us look at the positive news so far this week which has helped the pound, is it indicative of a big rebound in the value of the pound, is it a sign that Brexit is nothing to worry about and everything is going to be okay? Let us drill down into the detail of the figures and make an assessment if two pieces of good news this week are going to be enough to turn the tide on a raft of negative indicators.
- Positive Unemployment data. The data released only covered the period up until the vote. The claimant count reduction (people claiming benefits) fell in July but this is not something I would be drawing too much positivity for the UK from. We won’t know the full impact on Unemployment from the Brexit until October or even the New Year as the data is always 3 months behind. Plus it takes many months for workers to leave jobs or lay offs to occur so it might not be until well into 2017 until we know the true Unemployment picture. The fact remains all the economic data is showing big declines in business, this will cause problems down the line.
- Excellent Retail Sales Figures. The data for July showed a huge boost in Retail activity much better than June. What makes Brits go out and spend money? Sunshine! The excellent weather which on some days was 9 degrees higher than the average for that period saw lots of money on extra food, drink and clothes as people socialised more and went out more. Can we rely on sunshine to drive the UK recovery? Well I wouldn’t be banking on it….
It is only 2 months since the vote and I believe there are still many skeletons finding their way into the cupboards of the UK economy. Misplaced positivity can be a very dangerous thing. I prefer a careful, measured and balanced assessment of the facts. The pound has risen this week and may yet spike a little further following some very tough weeks. But with so little really known about the political and economic impact following Brexit I feel that sterling will fall further in the remaining months of 2016. If you are buying or selling the pound and have a transfer to consider please fill in the form below and I will contact you to discuss further the market and your options. Alternatively you can email me on email@example.com for a more personal service. I have nearly ten years experience working as a specialist currency broker for one of the UK’s largest independent currency brokerages and would be delighted to hear from you and offer some assistance to help you get the most for your money.
With political uncertainty over the Brexit having been the major contributor to sterling weakness in 2016 attention will this week revert back to economic data as we have the latest news on the UK economy. Improvement in Mortgage Lending and Consumer Credit were initially sterling positive on Monday before yesterday’s Manufacturing data for February showed a bigger fall than expected. The sector is still growing but not at as fast a pace as in January. Construction data today is predicted to remain at 55 (with any level above 50 representing expansion) and tomorrow’s Services predicted to show a slight fall to 55.1 from 55.6. This data gives us the most up to date news on how the UK economy is performing and presents opportunities for buyers and sellers of the pound. With the Bank of England Meeting on the 17th March this month the focus will remain on the Brexit question with sterling likely to react to headlines and polls. Following last week’s collapse of sterling however (for which I was lucky enough to be featured on BBC news talking about sterling, please read here) there seems little in the short term that will really drive sterling higher. If you are selling the pound to buy a foreign currency and want a better deal you will really be relying on weakness in that currency rather than the pound suddenly finding favour again…
Which brings me nicely to the first pair GBPEUR. The rates for buying Euros shot up this week to over 1.28 after hitting 1.26 last week. This was not so much GBP strength, although the pound has bounced off it’s lower levels against most currencies. It was also because Eurozone Inflation data painted a rather dim view on Monday which leads us to expect more Quantitative Easing on the 10th March. This should weaken the Euro and I believe the 10th March is the date anyone buying Euros with sterling hoping for a better deal should be looking to. Unfortunately there are no guarantees but there is real potential for Mario Draghi and the European Central Bank to seriously consider more QE or an interest rate cut which will weaken the Euro. GBPEUR rates next week could be very choppy so if you are planning on buying or selling Euros and wish to make some real plans please do feel free to contact me for further news on this important date. 2016 has not been a good year for anyone holding pounds to buy Euros, this event really could be the moment you have been waiting for. The rest of the year up until the Referendum does not look good so this could be a great time to be considering your currency purchase even if you don’t need the funds now. For more information please email me firstname.lastname@example.org.
Jonathan Watson’s Rate predictions are 1.26-1.34 for this month… Agree or Disagree? Email me as above, I would be pleased to hear from you!
The dollar has been one of the best performing currencies in 2016 having risen markedly against sterling to 7 year highs! GBP weakness has been a factor but the USD is also hitting multi year highs against many currencies. The prospect of further improvements hinge on the likelihood of further interest rate hikes which may not be forthcoming. Global uncertainty has been a worry for the Fed but US economic data does keep impressing and if they are using the same thinking caps as they did in December when they made the last hike, the Fed is likely to remain hawkish, ie having a propensity to raise interest rates rather than cut. What does this mean for you? Well if you are buying USD with pounds it looks like it may well get more expensive. But worries over the election outcome will start to play on the dollar in the coming weeks and months as we learn more about who might be running the Whitehouse. As we can see from the pound’s performance so far this year political uncertainty is not good for an economy. This will start to play out on the dollar in the coming weeks and months, if you have dollars to sell and want better rates beware that this level may not just carry on and on forever…
Jonathan Watson’s Rate predictions are 1.35-1.44 for this month… Agree or Disagree? Email me as above, I would be pleased to hear from you!
AUD, NZD, ZAR, CAD
The Aussie, Kiwi and Rand have found favour as improvements in the global outlook and China have given support to these higher yielding currencies. Investors hold these currencies in part because of their high yield. Essentially the higher interest rates on offer make them valuable, with global uncertainty having calmed and the ECB predicted to do more QE, these currencies have been finding favour once again. This trend against sterling is likely to continue as the pound remains under pressure. The Canadian dollar is benefiting from the Oil price having made a good recovery which is supporting the currency whose economy depends so heavily on Oil exports. As with the Rand, Kiwi and ZAR the CAD should remain supported against the pound so long as Oil prices do not deteriorate rapidly again.
Jonathan Watson’s Rate Predictions GBPAUD 1.90-2.05 GBPNZD 1.95-2.15 GBPCAD 1.75-2.02 GBPZAR 21.25-22.75
Currency Exchange to Consider?
We set this website up to provide information for our clients and new clients alike, to help them in their decision making for currency exchanges they need to consider. It would be impossible to include every important aspect in one post and most people would be turned off reading if we did! A phone call really is the best way for us to explain everything that may impact your exchange rate and crucially for you to be able to ask me or us, any questions. Any information you are looking for is completely free of charge and at no obligation.
To learn more please email me Jonathan Watson on email@example.com or please call 01494 787 478 in UK business hours.
Weekly round up
It was a good end to the week for sterling exchange rates. Presently global stock markets are having a major impact on the currency markets and due to the FTSE100 closing 2% up on Friday this has strengthened the pound. Further to this Public Sector net borrowing (the amount of new debt held by the UK) surprised the markets due to a £3.5bn drop from the consensus.
However the main talking point for sterling exchange rates this week was Governor of the Bank of England Mark Carney comments in regards to interest rates. Once again he confirmed the UK will not be raising interest rates until 2017 which has dented the purchasing power of the pound.
As for the rest of the week it was a mixed bag for economic data. Consumer Price Index numbers impressed (Tuesday) where as average earnings (Thursday) and Retail sales (Friday) dropped, a disappointment for clients holding onto sterling.
Its a fairly quiet week for economic data releases. Key announcements to look out for are:
- Mark Carney speech 10:45 Tuesday
- GDP numbers 9:00 Thursday
- GPK Consumer Confidence early hours Friday morning.
Its important to note if Carney continues to take a dovish tone Tuesday morning I expect it will be another tricky week for sterling exchange rates.
Its important when trading currency you analyse both of the currencies in question. If you have an upcoming currency transfer to make this week, month or year I would recommend emailing me with the currency pair (GBP/USD, GBP/EUR, GBP/AUD etc) and your individual requirement (buying a property abroad, paying a company invoice) and I will personally respond to you with my forecast and the process of using our company.
Quite simply we can give you economic information to help you time your transfer and can also offer you a better exchange rate than what you would receive with your bank. This can be anywhere between 1-5%. My direct email is firstname.lastname@example.org Dayle Littlejohn. Alternatively call me Monday morning on 0044 1494 787 478 and ask the reception team to be put through to Dayle Littlejohn.
If you would simply like a comparison against your provider email me with the exact figures, time scales and the best number to contact you on and I will call you Monday morning with our live buying price. This will take 2 minutes and could save you thousands!
The pound is in for a very busy day with a number of key releases mainly from the labour market with UK Unemployment data due. This release actually rose last month and could be a cause for concern. If we see a further increase sterling might really come under some pressure owing to the weaker economy. All in all if you are looking at making a transfer buying or selling pound sterling an awareness of all of your options well in advance is usually a good idea. If you need to make a transfer how do you know you are getting the best rates? Speak to me to find out by emailing email@example.com
The next thing to beware of on exchange rates is very much likely to be this Chinese news with the Chinese central bank cutting their pegged level to other currencies. This has presented much uncertainty into the forex markets with a major sell off on the Aussie and Kiwi presenting a very good time to buy these currencies with the pound. The volatility of the last 48 hours just shows nothing should ever be taken for granted on exchange rates!
For more information on your options and how to navigate the uncertainty please speak to me Jonathan on firstname.lastname@example.org
Rates unexpectedly spiked up after the election but have started to fall particularly in response to the Bank of England cutting growth forecasts last week. On the sterling side the big news this week is another Bank of England report due on Wednesday, if it is anything like the news they released last week it is not looking like it would be good news for sterling! Other important news for the UK is Retail Sales figures this week but I think generally expecting the pound is going to fall this week as the feel good factor from the election wears out.
Making plans when you need to move large sums of money internationally is always sensible. My name is Jonathan and in my work as a specialist currency broker I am here to assist in the planning and execution of any international for payments for say an overseas property or business. One of the worst things to do when making international payments is to use your bank, they won’t give you the best price and the transfer time can be more lengthly than using a currency broker like ourselves.
For more information on our services please contact me Jonathan on email@example.com
US ~Non Farm Payroll data is due tomorrow which could be a big market mover as it is the first one since the US stopped their QE programme. Today’s meeting with Mario Draghi might also be very interesting and should be a market mover, the least interesting thing is probably the UK’s Bank of England decision which is not expected to yield anything new.
How can you make a decision on when is the right time to enter the market if you don’t know what is happening? The idea of this blog is to provide information on just where rates are headed and make sure you get the best price when you do decide to enter the market. If you have a transaction that you need to consider why not get in touch with our specialist team to find out more about moving money internationally at the very best rates.
Sterling has done really well this year as the UK economy improves and investors position themselves for the UK to raise interest rates. Next year we would expect the UK elections to move the market, the increased uncertainty surrounding the political situation in the UK is bound to cause ripples on exchange rates.
When considering making a currency exchange understanding what is driving the exchange rate is vital to getting the most from the market. Please contact Jonathan on firstname.lastname@example.org for a quick overview of your position and to learn more about getting the best rates.