Tag Archives: gbp
What will happen next week on sterling exchange rates?
An excellent run of form for sterling has seen us hit a 15 week high against the euro and 11 week highs against the US dollar, Australian dollar and Canadian dollar. Is this going to get much better or has this rally run out of steam?
I think that this rally has run out of steam but that does not mean rates are going to just crash back down. Sterling has been given a boost by the improved GDP stats (0.3% growth for Q1) which removes some of the more immediate concerns regarding sterling. In order for the pound to press on we need to see more positive data and next Thursday could be a trigger with Industrial and Manufacturing data plus the NIESR (National Institute of Economic & Social Research) estimate of GDP for April.
If you are considering moving sterling in the next few weeks next week could be fairly pivotal in shaping the future direction for sterling. It is important not just for sterling but due to the releases affecting other currencies. Here is a quick run through of a couple of things to beware of on rates next week.
EURO – Mario Draghi and the ECB (European Central Bank) are giving a couple of speeches next week including the ECB Monthly Report. There was a story today that the ECB were playing down speculation yesterday rates may be cut further. If any such bold statements are made I expect the Euro to strengthen, but not by much.. The Euro is in the firing line right now. If you are considering any GBPEUR or EURGBP transfers in the future please feel free to contact me for a forecast specific to your requirements. jmw@currencies.co.uk
USD – An improved employment outlook for the US today helped the USD to strengthen against sterling but unless the pound comes under pressure I expect GBPUSD to push higher. A speech next Friday by Chairman of the Federal Reserve Bank in the US, Ben Bernanke could be crucial.
AUSTRALIAN – The Reserve Bank of Australia meet for their monthly meeting next Monday evening where they decide on economic policy. The statement after their meeting may be more indicative of policy as no change is expected. Next week we also have Australian employment data which could move rates. On the whole I expect rates to remain good for buyers, sellers of AUD to buy GBP may wish to move sooner if they don’t see improvements.
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Whether you are a private client or multinational looking to buy Euros with Sterling expect little change in the coming weeks with the Bank of England appearing determined to talk down the prospects and hence the value of the pound. On Monday comments made by Martin Weale a senior member of the MPC (Monetary Policy Committee) have helped the pound continue its recent poor run as he stated the pound may need to weaken further to help make the UK exports cheaper. The theory behind this is to help give economic growth a much needed boost.
For me this policy could well continue from the Bank of England as priority for the MPC and Government will focus on avoiding the ‘triple dip’ recession. Should the UK see negative growth in the first quarter of 2013 then the UK is officially back in recession and this is something everyone would like to avoid.
I for one am hopeful we will avoid recession and as a result the pound could receive a welcome boost. We will not see see the Official figures from Q1 until April and for this reason we are unlikely, in my opinion, to see the pound gain much momentum in short term. For Euro buyers in particular it is a little concerning how strong the Euro is, even with some very poor data sets coming from the Euro zone it just shows how out of favour the pound is currently. For the next 6 weeks I can see the Euro remaining strong with GBP/EUR testing the 1.14 territory, and possibly below.
Bank of England Minutes – how could this affect my money exchange?
This morning the Bank of England will release its latest minutes from this months interest rate decision at 09:30. This release will show how the nine members of the Monetary Policy Committee voted at the Banks’ interest meeting held earlier this month and can prove very volatile for exchange rates, dependent on the outcome. For example should any of the members have voted for an interest rate hike then this could give some much needed support to sterling against most majors, in contrast if further monetary stimulus through QE (Quantitative Easing) was discussed this could have the opposite effect and the pound could continue its poor recent run against currencies such as the Euro and US dollar and AUD.
Get the best deal for US Dollars
As with the Euro gains for the US dollar since the start of the year have been significant. In a little over 6 weeks the dollar has gained nearly 5.5% – this is a difference of £10,125 on a $300k money exchange. Of course the BofE wishing to keep the pound weak will affect cable and I for one feel the dollar may well continue to strengthen and I can see a move towards 1.53 in the coming weeks, however should you be selling I would err on the side of caution as I feel we are nearing the dollars peak.
In the next three months the US debt ceiling deadline is due to expire and I for one feel the usual ‘will they won’t they’ approach from the US government will be seen. Officially if the debt ceiling is not extended then the US will be bankrupt causing catastrophic consequences to the world’s financial markets. Of course this situation is highly unlikely to happen but you can guarantee the market will price in the possibility and as result do not be surprised to see the US dollar weaken as a result. Expect a volatile period for GBP/USD
Data Watch – US FOMC minutes at 19:00 this evening. US version of Bank of England minutes and can plenty of volatility
GBP/CHF exchange rates
Still widely regarded as the one of the major ‘safe havens’ for currency investors the Swiss Franc has been making strong headway against the pound. In fact following yesterday’s moves the CHF was trading at almost exactly a 1 year high against the pound, a again of over 9% in the last 6 months. With the Swiss National Bank having taken drastic measures in the past to devalue the currency to improve their ailing exports, CHF sellers may wish to look at their options whilst rates are so strong.
Should you have an upcoming money transfer to arrange and you would like to discuss the currency service we provide then please contact the office on 01494 787478. Through using the services of a specialist currency broker clients can make significant savings, often in excess of 2% when compared to the mainstream banks. Our service is designed to take a very pro-active look at the market for our clients by utilising a number of different contracts and our ‘market watch’ service. Should you have a target rate in mind and would like me to monitor the market on your behalf then please email Mike at mgv@currencies.co.uk
Why the pound can only get weaker! Current pound sterling exchange rates should not be taken for granted…
The pound has dropped quite sharply this year and with very good reason. The number one question I am hearing is will it drop further and as painful as this may be to hear, the answer I have to say is yes. This is good news for those selling a foreign currency to buy sterling, read on to find out how we can help save you money and ensure you trade at the right time.
The UK economy is uncompetitive. Five years of a major depreciation in the value of the pound has done little to ignite the recovery many expected would be under way. It is majorly in the Government’s and Bank of England’s interest to have a weak pound as this will help the recovery and gives credibility to their economic plans. A major devaluing of the pound is the only way the UK can get out of the mess it is in.
Martin Weale from the Bank of England stated only recently that it was in the UK’s interest to have a weaker pound and I expect that these sentiments will prevail for most of the next few months. It is therefore unrealistic to expect that the pound will suddenly make major improvements against the major currency pairs.
Are you considering a currency exchange involving the pound and wondering where all this is headed? For an unbeatable rate of exchange and market updates to ensure you don’t miss out please feel free to contact me Jonathan directly on jmw@currencies.co.uk or call 01494 787 478. To ensure I can best help you it would be useful to provide an outline of your situation and a contact telephone number.
Tomorrow we have the Bank of England minutes which are likely to cause the pound to lose further ground against the majors. Rates could drop up to a cent or two. There is a very slim chance some members may have voted for a rate hike but I doubt it. The minutes last month were more telling and this could be the case again. I will be watching this release very closely to see what is happening as it may well provide news on where rates will go in the future. If you are too busy to read through twenty pages of Bank of England data please register an interest with me!
To best assess the future we can always look to the past. The pound was strong last year because of Eurozone worries. Investors put money into the pound as a safe haven. This year as those fears have subsided and the UK economy teeters on the brink of an unprecedented triple dip investors have sold off their GBP positions and this has contributed to a weak pound. My predictions are therefore that sterling will continue to suffer in the future and that anyone who thinks this is the lowest it will go should not take current levels for granted.
The best way to ensure you do not suffer at the hands of market movements is to register an interest. As specialist currency brokers we set this site up for our clients and new clients alike. Our personal and proactive service means we can watch the rates for you and provide all the information to make an informed decision. Please feel free to contact myself Jonathan directly on jmw@currencies.co.uk or call 01494 787 478 and ask for me.
I look forward to hearing from you and assisting you with your currency matters.
Sterling report and forecast – Daniel Wright
GBP-EUR Forecast
For this currency pairing the real worry is the mountain of poor economic data cwe have had so far this year for the U.K everything is now pointing towards poor GDP (Gross Domestic Product) figures this week which could (although probably expected now) give us a further kick whilst we are down and will also get the media back on to the ‘Triple dip recession’ bandwagon! We do need to remember however that the GDP will be for the entire 4th quarter, and with expectations at -0.1% even the release being the slightest bit better than expected could lead to the Pound heading back towards 1.20 as it would suggest recession status is a little way away again at least for the time being.
The Euro however seems to be ever popular and bond auctions have been surprising everyone at the moment as they are showing a great demand. People are investing in the Euro and in turn it is gathering strength rapidly, with the head of the European Central Bank also seemingly confident (or at least showing confidence in his speeches) there could still be a little way to go for this trend, so if you need to book something out in the near term it may be prudent to consider your options and contact your account manager here today on 0800 328 5884.
Head of the European Central Bank Mario Draghi is speaking this evening at 18:00pm so be very wary of comments moving exchange rates overnight – You can protect yourself from further adverse market movements by placing a stop-loss order click here for one of our traders to call you back and let you know how this handy tool works. The Pound has dropped by 3.25% this year at the time of writing this as investors appear to question it as an option as a safe haven. To put this into monetary terms it would cost nearly £4000 more for a €150,000 purchase.
Sterling – Dollar
It looks like borrowing capacity will be extended at a vote on Wednesday which sweeps the Fiscal cliff issue firmly under the carpet until the 19th May.
This is why we saw the U.S Dollar and indeed many of the riskier currencies such as the Australian Dollar and New Zealand Dollar gain strength against the Pound in yesterday’s trading. The main movements seemed to happen just as President Obama made his inaugural address. Personally I can see the Dollar starting to drive on from here and would not be surprised to see GBP-USD closer to 1.55 than 1.60 by the end of the week, even if GDP figures are positive.
Sterling – Australian Dollar and New Zealand Dollar
Creeping close to multi year lows again I personally think we are due a bounce back against these two currencies we just need something to kick start it. Australian inflation data is due overnight however I think the key factor is risk.
When risk appetite is high, investors tend to invest in riskier currencies such as AUD and NZD and thanks to things going quiet on the European crisis and the Fiscal cliff being partially resolved global attitude to risk is returning and with a vengeance.
Personally I feel it is only a matter of time before the next headline crisis or for the PIIGs to become front page news again and when this does happen rates should start to move back in the right direction.
Also be very aware that we could easily see another rate cut in Australia and a cut in rates can lead to negative movement s for the currency concerned. GBP-AUD has gone down by 3.56% so far this year which just goes to show why timing your transfer can be key, this equates to AUD 10,751 less in a matter of weeks on a £200,000 purchase of AUD!
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Here at www.currencies.co.uk we pride ourselves on not just award winning exchange rates but also a pro-active service too. Let your account manager here be your eyes and ears on the market so you can get on with your busy lifestyle. We can highlight movements in your favour or indeed against you which can be vital in this ever changing market. Contact me today by emailing djw@currencies,co.uk and I will be happy to help you.
As the country is braced for snow, the pound could also have a frosty start to the day with Retail Sales figures released at 09:30
As much of the country prepares for a deluge of snow we could also find the pound has a frosty end to the week with Retail Sales figures released at 09:30 this morning. Currently GBP exchange rates are on a significant downturn against a host of currencies having lost over 3% against the Euro and 2.2% against the US dollar in the last two weeks. This is a worrying trend for anyone buying Euros or Dollars and today’s figures may also do little to support GBP today. For anyone selling Dollars or Euros I feel these current levels are a real opportunity and should be looked at closely. Next weeks UK GDP figures could be the turning point for Sterling, should they come in better than the NIESR’s predicted -0.3% then we could see the pound reverse some of its losses as the market is pricing in and expecting the worse, for this reason I actually feel the pound will recover a fraction next week.
The US dollar I feel will also come under a little pressure as we head into February with the debt ceiling deadline looming. As with the ‘Fiscal Cliff’ debacle to me it is inevitable the US will avoid this debt ceiling but I am sure congress will leave it until the last minute and it is this uncertainty that I am sure will put pressure on the dollar. I feel we will see the 1.58 area tested before this but would expect to see moves back towards 1.60+ in February.
For anyone looking at the AUD and NZD, these are also experiencing strong surges against the pound since the start of the year. The AUD and Kiwi have both gained nearly 1.3% in 2013 and historically tend to track each other. Overnight we have seen China release their latest GDP figures, these have come out at 7.9% – better than the forecast 7.8%. This is likely to give further strength to the Aussie and Kiwi during the course of today. I do feel however 2013 will be a better year for Sterling against both these pairings. I feel it is likely the Reserve Bank of Australia will continue with cutting interest rates this year to help devalue the Aussie as exports from Australia are struggling and this in turn is hampering the Australian economy. Unfortunately the heady heights of 2.50 are long gone but I would expect to see 1.60 at some point this year.
Should you have an upcoming currency transfer and you would like to discuss the current trends then please contact the office on 01494 787478. As a specialist foreign exchange broker I am confident I can undercut any price you are offered, whether this be via your bank or any other institute. To discuss the service in detail and to run though the contracts and rates of exchange we can achieve please email Mike at mgv@currencies.co.uk
Why is the pound dropping against the Euro? What has happened? Why is the rate for GBP/EUR so weak?
The most notable movement on the markets we saw last week for Sterling followers was in my view the drop we saw for the Pound against the Euro.
GBP/EUR exchange rates came down from being up in the 1.23s to a 10 month low currently hovering just above the 1.20 level as I write this.
There are numerous reasons why we have seen this drop and quite frankly slightly surprising turnaround of late. Firstly the U.K Service and manufacturing sector data has been particularly poor so far this year, raising concerns of a triple dip recession in the U.K this year which you would imagine could knock the Pound considerably as the U.K continues to struggle to tread water in these murky trouble filled economic waters.
The NIESR (National Institute of Social and Economic Research) predicted that U.K GDP (Gross Domestic Product) figures were due to come out at -0.3% for the final quarter of 2012. The NIESR are generally quite near the mark and GDP is a measure of how much an economy grew or shrank during a particular period of time, so if they are indeed close again this time then we are back in negative territory and two consecutive quarters of negative growth would indeed officially put us in the triple dip recession.. I am sure the papers in the U.K would love that!
On the other side of things the Euro has been gaining strength against most major currencies. Head of the ECB (European Central Bank) Mario Draghi came out with some fairly positive comments at his last press conference and European bonds have sold well in recent auctions suggesting that confidence is pouring back in for investors in the Eurozone. Confidence can be a big market mover and somehow many people seem to have let the tremendous trouble still ahead for Europe, the issues in Spain and Greece have certainly not been resolved and I feel that sooner or later this will all come to a head and we will see the Eurozone crisis as front page news again… The only problem for those looking to buy Euros is that this still may be some time away!
If you are in the position where you need to buy or sell Pound or Euros then it is key to have an experienced and knowledgeable currency broker on your side… It can make a huge difference and when it comes to getting the best rate of exchange when you do decide to trade, it is important to have a broker with award winning exchange rates too.
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Sterling report and forecast – “If Greece gets the green light the Euro may start moving through the gears and driving forward once again” (Daniel Wright)
GBP-EUR Forecast
An extremely important week ahead for Europe and indeed the Euro as European leaders meet once again today to try and get a resolution on the next bout of Greek aid. Looking back at what has happened when we have seen the Europeans come to a conclusion on pending decisions like this previously you tend to see the Euro strengthen as confidence in the Eurozone once again rises.
German Chancellor Angela Merkel seemed confident that this would be agreed in the coming few days saying “There’s no time to waste in finding a solution for Greece. a plan is being intensively worked on,” she said. With little data out today for the U.K and indeed the Eurozone the key for today will be progression with the almost certain agreement being announced. Personally I would not be surprised to see further Euro strength so if you have a transfer involving buying Euros to carry out it may be prudent to contact your account manager this morning on 01494 725353.
GBP-USD Forecast
We have a similar situation with this pairing however the focus for the States at present is the on-going issue with the Fiscal Cliff. Personally I feel this will get resolved however it will no doubt be at the eleventh hour so I would expect Dollar weakness leading up to the deadline and then a solid USD fight back should a positive outcome be announced.
GDP figures due out for both the U.K on Wednesday and the States on Thursday, along with a considerable amount of economic data for the U.S from Wednesday onwards could lead to a volatile end to the week. If you are looking to buy USD then let us be the eyes and ears on the market for you, click here and one of our experienced and knowledgeable traders will call you back.
GBP-ZAR Forecast
There are still plenty of problems for South Africa and I personally feel there will be lots to come in the next few weeks. Interest rates were kept on hold last week but the door is open for us to see an interest rate cut for South Africa in the near future. Recent strikes have led to manufacturing production figures absolutely plummeting and this certainly doesn’t seem to be the end of what could be huge problems for the ZAR which personally I feel may lead to the Rand being extremely volatile and indeed the Pound gaining further ground this week.
GBP-AUD/NZD Forecast
A quiet week for Australia and New Zealand on the economic data front however attitude to risk will play a big part in where these pairings will head this week. Should the Greek aid go ahead you would imagine currencies such as the AUD and NZD would strengthen as investors will be more inclined to take on riskier currencies. Global attitude to risk is sure to be key in the coming months with Greece, Spain and the Fiscal cliff being the main drivers for this.
Important Economic data out over the next few days
Today European ECOFIN meeting – As mentioned this could be key for the next tranche of Greek aid, investors will be keeping a close eye on progress throughout the day.
Tomorrow (AM) U.K GDP data – This latest set of figures is out tomorrow morning and the market isn’t expecting much of a shock however you should be wary that the market is there to surprise us.
Tomorrow (PM) A flurry of data for the States tomorrow afternoon with the pick of the bunch being housing data, Consumer Confidence and Federal Reserve’s Ben Bernanke, speaking at 13:30pm.
Wednesday (AM) First thing Wednesday morning we have the release of Swiss GDP data so this with an interest in the Swiss Franc may wish to have either a limit order or stop loss in place for this as it is released at 06:45am.
Thursday (PM) We see the release of U.S GDP on Thursday afternoon, this could easily effect all major currencies so be prepared for a volatile afternoon no matter what currency pairing you are interested in.
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