Tag Archives: GBPAUD

Sterling strength expected later in the week, Euro and Dollar sellers should be looking to act soon (Joshua Privett)

It’s been a fairly uneventful beginning to the year on the currency markets, with Sterling exchange rates against the Euro and the US Dollar moving heavily each day, yet by close of business we’ve tended to find ourselves back where we started.

GBP/EUR has reamined around the 1.16/17 mark, GBP/USD has held quite firmly at 1.23, and GBP/AUD around the 1.68-1.70 range.

This exchange rate behaviour is indicative of a market awaiting some very important news.

I hate to flog a dead horse for our regular readers by continuing to address the upcoming Supreme Court decision and the implications this will have for the Pound, but it is incredibly pertinent to anyone planning to buy or sell Sterling for a foreign currency. Not just over the next few weeks as we await the verdict, but over the next few months in the run up to the triggering of Article 50.

For those who are not aware, the Supreme Court is currently ruling an appeal of November’s Judicial Court decision to allow Parliament to vote on the enactment of Article 50 – the formal process to leave the EU.

As in November, financial markets should react well to the decision to involve Parliament in the Brexit process. The Pound’s value increases with investors gaining confidence that Parliament’s involvement will mean the Brexit process will be delayed to some degree due to cumbersome Parliamentary procedures, and that this increases the likelihood of a softer exit from the EU.

You can also argue that Parliament’s involvement means that the aims of the negotiations and how well they will progress will be much more public. This permits greater confidence to invest in the Pound as investors and financial institutions will have a greater understanding of what trajectory the UK economy, and therefore the Pound, will be taking in the medium-term.

The expectation is that the Supreme Court will uphold the initial conclusion of the Judicial court a few months ago. Based on November’s currency movements, this will likely cause 1-2 cent improvements on GBP/EUR, similar gains on GBP/USD, and likely larger positive spikes on GBP/AUD due to the volatile nature of the currency pairing.

The verdict is expected between the 12-17th of January, so if you are a Euro or Dollar seller, it may be wise to move ahead of this coming Thursday to avoid being caught up in any sudden and unannounced spikes in Sterling value when we are told the decision.

Furthermore, on Wednesday data sets for manufacturing and industrial sectors of the UK economy, and a first look at growth for the final quarter of last year, will be released in the morning for markets to react to.

The manufacturing sector has enjoyed a resurgence following the sudden devaluation of the Pound in June, and growth in the UK economy has shown on mutliple occasions since the June vote to Leave the EU to be resiliant to the economic shocks this had entailed.

So, in short, very good news is expected to be provided to Euro, US Dollar and Australian Dollar buyers in the short-term. Two major events are expected to make your transfers more profitable, which is why anyone looking to conduct a Sterling purchase, even over the next few months, should look to how you can secure these still historically favourable exchange rates before Wednesday.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in touch with me on jjp@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

I have never had an issue beating the rates of exchange on offer elsewhere, and these current exchange rates can be fixed in place for anyone wanting to prebook their currency transfer later in the year at current exchange rates.

Pound sees tentative rises for buying Euros and Dollars ahead of the thinner trading of the Christmas period (Joshua Privett)

Buying Euro, USD and Australian Dollar exchange rates have shown a noticeable uptake ahead of the Christmas period with rates above the 1.19 level on GBP/EUR, and above 1.70 on GBP/AUD being realized ahead of markets closing for the weekend.

The gains against the Euro and Australian Dollar in particular this week were due to a lower demand for these currencies which sucked away some of their recent, and frankly over-inflated, value. The clear driving force behind this movement is attributed to the historic rise in interest rates in the US, only its second time the FED have been do so since the financial crisis.

The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transfers and exchanges concentrated between the pair, when one of the two currencies suddenly gets a large boost in demand, as we saw this week, the other loses value through a corresponding slackening in demand. This is why GBP/EUR briefly managed to maintain its vantage point above the 1.19 level.

The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% as an unfortunate example. However, it is traditionally seen as an unstable currency due to its links to the commodities market, so when you have a safe-haven currency which raises its base interest rate rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD – tipping over the 1.70 level for the second time this week.

Moving forward however, Euro and Dollar buyers have the phenomenon of profit taking to deal with as unusual end of year market forces take hold of exchange rates over the next few weeks.

At the close of the year, and what a year it has been, traders have to consolidate their profits in a stable currency for the rough 2-week period when they are away from their desks. This protects their capital from any adverse movements in what are normally ‘safe-haven’ currencies, so that when they come back to the desks the amount of capital they are managing hasn’t been worryingly eaten into. Of course the Pound is anything but stable at the moment and will likely suffer in the sell-off that ensues.

As such anyone with a buying Euro or Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.

Since Trump became President in November, Euro buyers have gained over 11 cents in the marketplace for GBP/EUR and 10 cents on GBP/AUD. Meaning that in real terms on a £100,000 transfer buyers have gained an additional €11,000 or $10,000 in the space of 6 weeks. Understandably, the popular option at the moment is to consolidate those gains.

The turn of the New Year has many forks in the UK and therefore the Pound between January and March which are difficult to account for ahead of time, and markets will be factoring this in to the price of Sterling moving forward which could end up being expensive for anyone with a planned Euro or Dollar based obligation to meet in the New Year.

Sterling buyers of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.

If you are planning to make a currency exchange involving the Pound and a foreign currency, it’s well be worth your time getting in contact with me on jjp@currencies.co.uk over the weekend in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.

Sterling exchange rates boosted after the Autumn Budget, will the Pound continue to strengthen? (Joseph Wright)

The current levels for converting Pounds into other major currencies are surprisingly attractive when we consider the outlook for the Pound just a few weeks ago.

I think that people planning on converting their Pounds into another major currency, for a property purchase for example, have been dealt a fortunate hand as the Pound hit a 2-month high yesterday on a trade weighted basis, whereas just a few weeks ago the pound was trading at over 5 year lows against the Euro and at over 30 year lows against the US Dollar.

The Pound to Euro exchange rate is now trading closer to 1.20 than 1.10 after gaining 7 cents off the back of Donald Trump’s election victory. The UK economy, and therefore the Pound, has been boosted by the ‘Trump train’ after his warm words about the relationship between the UK and US in his campaign. Barack Obama had previously said the UK would be at the back of the queue on business deals whereas Trump said the opposite, and Trump also has a number of interests in the UK.

The gains for the Pound against the Euro specifically are extensive, making a €200,000 purchase £10,650 cheaper.

The Pound was boosted further yesterday afternoon after the Autumn Budget sprung no surprises. I do think that those planning on converting Pound into another major currency should watch the rates and news as the Pound could come crashing down quicker than it’s risen as is usually the case.

If you are planning a currency conversion involving the Pound, it’s worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

You can also call in and ask reception to speak with me (Joe) on 01494 787 478.

What do we really think is going to happen next for the pound?

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 jmw@currencies.co.uk 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.

Sterling exchange rates against EUR USD AUD and CAD in the near term – What impact may the referendum have? (Daniel Wright)

GBP/EUR

Sterling has gained ground against the Euro overnight as we have seen criticism of some European Central Bank policies in an interview with the head of Germany’s Bundesbank Jens Weidmann. These comments surrounding monetary and fiscal policy show a lack of togetherness which may well lead to further problems for the European Central Bank further down the line.

We must remember that although there is a lot of hype surrounding the referendum and problems for the Pound, the Euro has many problems itself with Greece apparently still struggling and fiscal policies that have been implemented so far not really having the impact that the European Central bank wanted.

I feel that there will be a lot of cat and mouse between this currency pairing in the coming weeks and plenty of buying and selling opportunities may arise, so if you are looking to purchase or sell Euros in the near future then it is key to let me know. We have rate alerts, limit orders and all sorts of tools available to help you maximise your rate of exchange so if there is a particular level you are looking to achieve then feel free to get in contact and I will explain these free market tools to you.

If you have the need to buy or indeed sell Euros for your business, due to a property purchase/sale or for any other reason then it is important to have a proactive broker on your side and one that can get you the very top levels of exchange – It is very easy to settle for second best in this market but it is key to realise that even the slightest improvement in a rate of exchange can save you a huge sum of money.

If you would like to have a brief discussion with me (Daniel Wright) as to how I will be able to assist you with any pending currency exchange then feel free to email me directly on djw@currencies.co.uk  and I will be more than happy to get in touch with you personally. We can cater for people inside our outside of the U.K and carry out bank to bank transfers.

GBP/USD

The Pound has been fairly range bound against the Dollar over the past few weeks and the political fiascos along with delaying of interest rate hikes over in the States still does not appear to have knocked the Dollar as much as we may have expected.

Later this afternoon we have inflation data out for the U.S along with the Federal Reserve meeting minutes due out tomorrow evening. These minutes may be crucial to the strength of the Dollar as they will show us just what had been discussed during the last interest rate decision, along with an indication as to whether or not we may see interest rate changes in the future.

The Dollar gained a lot of strength in the lead up to the end of last year due to the fact that the Federal Reserve had indicated that there may be four interest rate hikes this year and now it appears we may only get two at best. With an interest rate hike generally being positive for a currency and a cut negative, the mere speculation of a rate movement can lead to market volatility.

For a live quote to buy or sell Dollars and the very latest market information feel free to contact me (Daniel Wright) on djw@currencies.co.uk and I will be happy to speak with you directly.

GBP/AUD

The Australian Dollar is another currency having a tough time of things lately, we have seen the AUD drop by over 10 cents against the Pound in recent weeks and it looks like we may see a breach of 2 again in the near future. Like with the Euro it is important to realise that although there is a pending referendum in the U.K, we also have many problems in Australia too both in an economic and political sense… Not to mention China!

I feel that the potential to buy at a trading price of 2 may well be a stark possibility in the coming days and weeks and with this currency pairing moving 24 hours a day limit orders are well worth taking advantage of. A limit order is where you can set a particular rate of exchange you wish to achieve and should the market tick up there, even for a second then your currency will be purchased automatically for you. There is no cost to place this order and it can be cancelled or amended at any time as long as it has not gone through.

Call me (Daniel Wright) on 01494 787478 or email me on djw@currencies.co.uk for more information on this handy market tool.

GBP/CAD

With oil prices on the rise many would have felt the Canadian Dollar would be on a fight back, however recent information showed that the number of oil rigs in operation was at its lowest point in years, this is a stark reminder that the oil industry is nowhere near where it needs to be for prices to rise consistently. With the Canadian Dollar being so reliant on oil and the horrific fires that we witnessed last week the Canadian Dollar is looking a little shaky at present.

I feel that this pairing may remain fairly range bound in the next week or so, we do have the Bank of Canada Interest rate decision and rate statement next Wednesday which will be the next big Canadian release to look out for.

There is no doubt that the pending referendum will cause uncertainty for Sterling against all major currencies but the global economy as a whole also has many, many problems so this is certain to be an interesting time for the Pound and the global currency market as a whole. If you are not registered with us then it is well worth contacting me directly on djw@currencies.co.uk and I will be in touch to explain exactly how I will be able to help you.

If you have any questions or queries about this update or would like information on another currency pairing then please feel free to contact me directly.

ECB President, Mario Draghi Halts the Chance of a Rally for the Pound (Daniel Johnson)

It was a volatile time for Sterling last week. Predominantly due to the European Central Bank’s (ECB) interest rate decision on Thursday.  Mario Draghi announced there would be an increase in Quantitative Easing from €60bn-€80bn and also dropped key interest rates. I would have expected a bigger reaction on GBP/EUR, but we only saw it break the 1.30 mark briefly. Draghi adopted a fairly bullish stance after the announcement and stated there would be no further cuts. GBP/EUR dropped heavily, I was surprised to see the market move more on a bankers word than the facts that interest rates had been cut and there was further QE to be implemented.

I think the QE announcement was the one shot for the Pound to make a significant rally against the Euro until after the EU referendum. I think current buoyancy levels will remain on GBP/EUR. If you are Euro buyer I would be looking to move on a small spike, possibly high 1.29s. I do not think it will get any better. Keep a close eye on the Budget on Wednesday, I think Osbourne has some quite severe cuts in mind which could weaken the the Pound further. It could be wise to move ahead of this announcement.

We have the Bank of England Interest Rate decision on Thursday at 12pm. It is dubbed “Super Thursday”, but I doubt there will be anything “super” about it. I would expect rates to remain the same and the Monetary Policy Committee to keep the vote at 9-0 against a rate cut.

Although I have focused heavily on GBP/EUR in this blog, I also trade a significant amount of USD and AUD. If you would like a detailed, forecast of where I think other currency pairings are headed please do not hesitate to get in touch. I will look at your trade individually and devise a strategy to suit your individual needs.  I am in a position where I can guarantee to beat any competitors rates, thank you for reading my blog and feel free to get in touch at dcj@currencies.co.uk  or call me on 01494 787 478 and ask for Daniel Johnson.

 

 

The Global Economy continues to Falter, Is there need to Panic? (Daniel Johnson)

The Global Economy looks to be more and more unstable predominantly driven by falling Oil prices and the significant slow down in Chinese growth. Oil now sits at below $30 a barrel the lowest level in seven years and despite surplus oil producers are continuing to flood the market. Sterling has lost ground against most major currency pairings.

If you have a Currency requirement judging when to move in such volatile times is a very difficult proposition. Hopefully I will try and point you in the right direction.

GBP/EUR

Sterling has taken a big hit against the Euro of late, dropping from the 1.42’s to where we now sit in the 1.30’s. there are several factors weighing down the Pound such as the uncertainty caused by the EU referendum, poor inflation and some well below par data releases.

Carry trading is also taking its toll on the Pound.  Carry Trading is when Investors having borrowed funds at low interest in Euros then invest in more volatile currencies such as AUD or NZD for higher returns. However with so  much global economic uncertainty we are seeing investors moving back into the Euro in droves for fear of large losses. This has bolstered the Euro against the Pound.

UK GDP figures are released on Thursday at 9.30am and could well cause movement for GBP/EUR. Mario Draghi the Head of the European Central Bank is basing his decision to pump more money in to the economy on  inflation data. Eurozone inflation data (CPI) is released at 10am on Friday so it would be wise to keep a close eye on events as they unfold. Please do not hesitate to get in touch if you would like to know how these events will affect your trading position.

GBP/USD

The Federal Reserve rose interest rates in December and the Pound has fell consistently since the rise. The Fed have also indicated there could be further rate hikes later in the year. The dollar is certainly the most attractive safe haven currency at present with many investors choosing to buy into the Dollar due to global economic uncertainty. The question is will it continue? You have to take into account Sterling’s current dire position.

This week will  several key data releases which will alter the value of GBP/USD – Stateside we have durable goods order and GDP figures to name but a few. I will be happy to have a chat to discuss your currency requirement in more detail to help time your trade.

GBP/AUD

If you are selling AUD I would be seriously tempted to move in current market conditions. The fear of further drops in Chinese growth could well force the RBA’s hand in an interest rate drop which could push GBP/AUD above 2.10 again.  If you have a AUD requirement however I wouldn’t set my expectations too high eg 2.15 + as I feel the state of the UK’s economy will hinder further advances.

If you have a currency requirement in such unpredictable times it is vital to time your trade. I am constantly watching market movement and data releases to try and predict where the market is headed. I am happy to  help you maximise your trade and I can also guarantee to beat any competitors rate.I have consistent large trades going through over the next few days , potentially I can tag new clients on to these trades and gain a very competitive rate.  If you have a currency requirement I would  recommend getting in touch by calling 01494 787 478 or e-mail me directly at dcj@currencies.co.uk. Thank you for reading my blog it is greatly appreciated I look forward to hearing from you.

 

 

 

Have sterling exchange rates bottomed out for now?

The expectations for sterling remain rather unsettled but it does appear that now much of the bad news is priced into current exchange rates. Expectations for the UK economy to have a tough year and for there to be increased anxiety surrounding the UK’s relationship with the European Union will do little to boost confidence in the pound. The uncertainty of the EU Referendum is likely to linger until we have some news on just what ‘concessions’ exactly the Prime Minister has negotiated. In my opinion it seems highly unlikely David Cameron will achieve some of the important terms he seeks as they conflict directly with the core principals of the European Union. One example is Immigration. The UK is seeking tougher new rules on who is allowed into the country and the terms of stay including the duration until they can claim benefits. I think that in the coming weeks once news breaks that the UK is unlikely to have negotiated its position to a more ‘favourable’ EU, the pound will slip further as the bare faced reality of a UK exit from the European Union becomes a real possibility.

to understand where we are going it is useful to look back and one of the main reasons sterling has been so strong in the last year is the prospect of the UK raising their interest rate. Such uncertainty over the EU question leaves any potential interest rate hike much further away in the future and investors are seeking much safer predictable shores such as the US and Euro. Sterling has now fallen to multi year lows against the Euro and Dollar. In my research for this blog and my work generally I have found the Bank of England data team most useful and having contacted some of the team there personally have found them very helpful too. If you have any questions over the latest trends on sterling exchange rates please contact me on jmw@currencies.co.uk and hopefully I can help you make sense of the latest trends!

The rest of the week is not holding too much fruit for those still hopeful of improvements to sell the pound. Tomorrow we have UK Unemployment data and Thursday the latest European Central Bank meeting. These releases could provide some brief respite for your transfer or present a final consolidation of the recent trends. On balance it does appear that the pound will suffer further in the future. Please contact me Jonathan on jmw@currencies.co.uk to learn more.

What lies ahead for Sterling? (Daniel Johnson)

China News

China’s stock market ceased trading yesterday when there was a wide spread stock sell off caused by a tenth consecutive month of weak manufacturing data. This is worrying news for the global economy, China is the second largest economy in the world and the continued slow in growth will have serious ramifactions on financial markets. The FTSE 100 dropped £34bln this morning on the Chinese sell off.

GBP/EUR

Yesterday saw the release of UK manufacturing PMI and it was down from 52.7 to 51.9. This is a worrying statistic clearly showing that the high value of the Pound is hindering our exports. Mark Carney the Head of the Bank of England has indicated he is willing to artificially weaken Sterling in order to prevent a further slump. There is the outside chance that Mario Draghi the Head of the European Central Bank could consider introducing further quantitative easing, this could bolster the Pound against the Euro, however he would have to lose face considering his previous bullish stance at the end of 2015.

When you also consider the last time there was significant drop in China’s stock market dubbed “Black Monday” Sterling took a big hit against the Euro dropping from the near 1.40s down  to the 1.34s and there could be further volatility to follow. It may be wise to move sooner rather than later if you are a Euro buyer, hanging on for that extra buck can prove costly.

GBP/USD

We have already recently had a rise in interest rates state side which has caused substantial Sterling weakness. Janet Yellen the Head of the Federal Reserve has indicated there will be several more throughout 2016 which is sure to cause further weakness for the Pound. There may be some respite when we are further down the election road when political uncertainty could well weaken dollar value.

GBP/AUD

Australia is heavily reliant on raw material export to China and with China’s growth dwindling it does not bode well for AUD. The Reserve Bank of Australia have stated there will no interest rate drop until after February so I do not expect any significant Sterling strength until after this point. I wouldn’t set my hopes to high however if I was an AUD buyer and I would set a conservative target of around 2.08-2.10.

If you have a Currency requirement I would be happy to assist, I will not only keep you up to dated with market movement to help you maximise your trade but I can also guarantee to beat any competitors rate of exchange. If you have a currency requirement I would strongly recommend getting in touch by calling 01494 787 478 or e-mail me directly at dcj@currencies.co.uk . Thank you for reading my blog it is greatly appreciated.

US Rate Hike Comes in as Predicted. What is next for Sterling? (Daniel Johnson)

The USD rate hike came in as expected at 0.25% and the Head of the Federal Reserve Janet Yellen’s statement did little to stir the markets. Sterling has been quite stagnant against all major currency pairings apart from GBP/USD which now sits in the 1.48’s.

There are little data releases of consequence coming out of the UK until the new year, so I would expect buoyancy levels to remain fairly stable. Here are a few of my short- medium term predictions.

GBP/EUR – I expect GBP/EUR to remain in the high 1.30’s, I think GBP/EURwill hit resistance at 1.40. If Mario Draghi the Head of the European Cental Bank increases QE however I expect GBP/EUR to enter the low 1.40’s. (outside chance)

GBP/AUD – I expect the Pound to strengthen over AUD over the coming months due to the underlying problems with the Australian economy. china’s slowing growth and Australia’s housing bubble doe not bode well for the Aussie. If you are an AUD seller I would be looking to move quickly as I feel you only have a small window of opportunity to take advantage of current levels.

GBP/USD – This is definitely not rocket science. If you have to buy USD get it done. USD is sure to strengthen after the rate hike.

If you have a currency requirement I will be happy to help. I can guarantee to beat any competitors rates and I pride myself on helping my clients trade at the right time to maximise their trade. If you would like to get in touch feel free  to call me on 01494 787478 or  e-mail me on dcj@currencies.co.uk . Thank you for reading my blog it is greatly appreciated.