Tag Archives: GBPAUD
As we approach the halfway point of the month we see the pound holding some of the gains we have witnessed in April but still very much under pressure! Unfortunately there is very little on the horizon to indicate significant further gains this month. If you are selling pounds to buy another currency holding out for further gains could be very risky, current levels should not be easily dismissed. Here are some of the key thing to note if you are buying or selling which may affect your rate.
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Will the UK leave the EU? Expect pressure on sterling due to political uncertainty. Markets and investors want certainty in their investments. Fears of the damage a split Tory government, the rise of UKIP and a broken coalition would do to UK business weighed on sterling yesterday. Can Cameron tackle the ghost of conservative past and deal with the question of Europe? It is doubtful I have to say and this will weigh down the pound.
UK Growth Last months data was impressive and welcome but 0.3% is not anything to get too excited about. True the latest data sets have all been positive but the marginal improvements on what were dire figures still have a long way to go. Ultimately the UK’s stagnant housing market (particularly outside London) needs invigorating – Construction is the main drag in recent years. The second revision of growth figures at the end of the month could easily be a market mover.
Depending on which currency pair you are trading there will of course be many other things to move the market. Looking in my crystal ball (which has been pretty clear lately) I cannot see significant gains for GBP against the majors. Maybe a cent or two? Once again I see more danger of things dropping as the confidence of the last few weeks wears off.
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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. email@example.com
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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Sterling is finding better support against most currencies as a positive GDP figure is expected on Thursday. This is of course good news or bad news depending on what you need to do! A positive figure will not in my opinion be enough for sterling to shake the blues but, it may be enough to provide anyone hanging on for dear life with a little sweetener in their price!
The pound has been suffering this year and it is likely this pressure will remain. Economically the UK is in a mess! What has improved lately is the economic conditions in the US which will help UK businesses. Europe on the other hand is on the cusp of worse troubles and with less orders for UK businesses as a result, sustained economic growth from business in the months and years ahead will be difficult. You have been warned!
I suggest therefore if you are considering moving on a currency transaction you pay particular attention to what happens this Thursday. Earlier in the year I wrote about the three key issues to beware of on the pound this year. You can read the post here. The three issues were the EU referendum, the triple A rating and the triple dip recession. Two of those topics have come true, in two days time we will find the answer to the third. The pound is absolutely on the edge!
Expectations are swaying daily but the general consensus seems to be we have narrowly avoided the dip. Such data is notoriously difficult to predict and as such I expect the pound to be very volatile in the coming 48 hours. Do not mistake the UK avoiding the triple dip for proof of a return to the rates we saw last year or earlier this year. The outlook remains negative and this is why I feel anyone selling sterling for another currency should really take stock now!
If you have an exchange to consider in the next couple of weeks Thursday’s data is very much worth being aware of. Our proactive personal service aims to ensure our clients get the best information relevant to their requirements. We are currency specialists with many years experience assisting and guiding both private and corporate clients through their transfers. We offer an unbeatable rate of exchange and it is very rare any of us would be beaten on price by another company or the banks.
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It is no secret that the pound has been under immense pressure in 2013 but have those losses now come to an end? The three events I highlighted at the start of the year have to varying extents come true. To read my post you can click here. I think personally that the pound has reached a limit against certain currencies which means if you are banking on further improvements you may end up disappointed. This post will outline some of things to beware of, so you can take steps to ensure you don’t miss out.
Of course the answer to whether or not sterling rates will suffer is down to which currency pair you are talking about! GBPAUD, GBPNZD and GBPSEK are close to some of the lowest rates ever. That means if you are holding any of these currencies looking to buy the pound, there has never been a better time to capitalise. The continued excellent economic news benefitting these economies and the pitiful news for the pound has all helped to lead to this situation.
On the other hand you have GBPZAR which is up at close to an all time high! A truly excellent time to buy the Rand. This too may continue as long as economic uncertainty weighs on the ZAR and the pound finds some favour.
Against the USD and Euro the pound is struggling to maintain but this may be about to change. Mervyn King the Governor of the Bank of England has said that he thinks the pound has lost enough value. This led to sterling rising last week as it became apparent that perhaps the Bank of England would not be pulling out all the stops to make the pound lose value. Many commentators have commented on to what extent a devalued pound actually benefits the economy anyway. Therefore it would seem on the euro that particularly with events unfolding in Cyprus the best rates selling euros may have passed. On USD I would not be surprised to see rates tick down a little lower but feel that here too, we may have reached close to a bottom.
To sum up selling USD to buy GBP, you are still at close to a 3 year high! And selling EUR to buy GBP you are not far from a 1 1/2 year high.
Tomorrow we have UK GDP data and Thursday US GDP data. These events could easily move rates and the continued Cypriot saga is bound to add some extra uncertainty too. Will Cyprus bank account holders get access to their money on Thursday? The news is literally changing every few minutes. The markets are reacting to the news and it makes forecasting all that more difficult. Suffice to say it is creating opportunities for some.
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This quote by Albert Einstein rings true for those making predictions or looking into the future. Sooner or later the day comes and you find out what you have been waiting for. Tomorrow is always one of those days as we are always looking ahead to see what will happen. Tomorrow in particular could be a very interesting day for sterling and shape movements for the next week or two.
The current spike on GBPEUR and recent improvements for the pound are begging the question will this carry on or will the pound falter? Looking solely at the pound and despite Mervyn King’s comments that he thought the pound had dropped enough, I think sterling will remain under pressure. This will become much clearer tomorrow when we have the UK Bank of England Minutes and the UK Budget. Just what has Osborne and the MPC got up their sleeve? Well probably not much!
It would be political suicide for the coalition to abandon the current plans. Abandoning the current course could potentially be more harmful to sterling. Ultimately whilst borrowing has increased and growth is minimal it could be much worse. Just look at what is happening in Europe right now. The Southern economies are in dire straits and the gulf with the Northern economies, Germany in particular is causing political tension. The so-called bank guarantees have been broken with the news bank accounts in Cyprus will now be subject to raids.
If we were talking purely about the euro I would say rates for buying euros will improve due to euro weakness. However tomorrow we have the UK budget, Bank of England Minutes and Thursday UK borrowing data. With the way the UK and the pound has fared in recent weeks these events are bound to attract international attention after the UK lost the triple A rating a few weeks ago. What hope does Osborne have to restore confidence. It appears the medicine for the UK will be based on more of the same.
A couple of weeks ago GBPEUR dropped to the mid 1.13′s in the morning before climbing to over 1.16 by the end of the day due to the Italian election. This was more movement in a day than you seem sometimes in a whole month! This just shows how if you are considering a transfer it is wise to make some plans to ensure you trade at the best rates.
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Over the last few days rates have pushed up for GBPEUR exchange rates, it has been two consecutive big days of gains that present the quick moving clients with an opportunity to buy at a 4 week high. In monetary forms this equates to a saving of £2,600 on a €200,000 in less than 36 hours.
What is the reason for the rally?
Yesterday we saw gains following the news that the UK economy could have avoided a recession which had been priced into the market. This resulted in a rally of nearly 1 cent on the day. Today the market has gained nearly another cent following comments from Mervyn King the current head of the Bank of England when he said “There Is Momentum Behind Recovery That Is Coming.”
Will it last long?
Probably not, these knee jerk reactions don’t normally last long so if you have funds available and need to buy within the next few weeks I would see current levels as an opportunity to buy. I personally don’t believe his comments long term as you only have to look at recent data from the UK to see there is no real recovery. It may be he is talking about a recovery coming this year but I certainly cannot see one within the next few months.
How do I get notified of these spikes?
Well timing trades can save thousands on an exchange. Using a pro-active currency broker will help as they will notify you of these spikes so you can take advantage. Contact me directly if this service is of any interest, Steve Eakins, at firstname.lastname@example.org
Why would I use a broker?
Here I work for a company called Foreign Currency Direct, and comparisons have shown that we can save clients as much as 3% – 6% on currency transfers when compared to rival brokers and the high street banks. Simply put, if we could not save you money we would not be in business. We are an FSA regulated company and have been highlighted as the “Best Exchange Rate Provider” with the “Best Exchange Rates” in Britain by The Sunday Times for three consecutive years and more recently by the Telegraph.
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Pound hits 17 month low against a basket of currencies. GBP/Euro, GBP/US dollar and GBP/AUD forecast (Michael Vaughan)
Sterling exchange rates continued to react negatively to news over the weekend that Moody, the credit rating agency, downgraded the UK’s once secure AAA credit rating, but what does this mean for the pound?
Many are arguing that the downgrade should not be over hyped as this seems to be more and more common in this financially uncertain world. Of course the news is not great for sterling but is also not wholly unexpected with warnings having been made in the past that this scenario could well happen. Although the UK may be hit with increased borrowing costs in the future it is likely in my opinion to have limited negative impact on the UK economy, much in the same way it did when France and the US had their respective ratings downgraded. It has now left much of the of the western world in the same predicament, with only Germany and Canada holding onto their triple AAA status. For this reason I do not feel the impact on market confidence, and confidence in sterling will take as bigger hit as it may well have done had this happened a few years back.
I am still holding on to the same opinion that the pound is undervalued and I hold out in hope that we can avoid the ‘triple dip’ recession come the end of Q1. It is inevitable to me that until this point the pound will continue to struggle but the uncertainty surrounding Europe will also at some point return. Indeed the Italian election is likely to create more volatilityand has caused slight Euro weakness this afternoon as it emerged that estimates indicate Berlusconi’s centre-right party has pulled ahead with 31pc, closely lagged by Bersani’s centre-left group with 29.5pc. Beppe Grillo’s Five Star Movement looks to have won around 25pc. Political uncertainty can cause reduced confidence in the market and this may counteract any losses seen by the pound earlier this morning. I for one feel GBP/EUR will be contained around 1.15 area for the foreseeable future.
As with the Euro, the pound has suffered at the hands of the US dollar and Australian Dollar. I would certainly suggest anyone selling the greenback or Aussie to take stock and consider taking advantage. The US dollar is trading at the best in nearly 2 1/2 years and the Aussie is getting close to a 25 year high. Gains for both have been significant and certainly an opportunity for sellers, what about buyers? Again I see sterling making gains as we head throughout the course of the year, I see heavy resistance for GBP/USD at 1.50 and would expect the dollar to weaken as we head towards the US debt ceiling deadline in May. As for GBP/AUD I still feel the Reserve Bank of Australia will continue with its stance on interest rates and I would expect interest rate cuts throughout the year. I feel short term (1-2 months) those buying USD and AUD with the pound will continue to be disappointed but I can see a correction towards 1.55 on cable and 1.50 on the AUD in Q2.
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As we start a new month will we see confidence return to the pound? Get the best deal on your foreign exchange.
Since the turn of the year the pound has had a torrid time and makes for some pretty poor reading. Below I have given the figures against a number of commonly traded currencies to see the difference this makes on a £200k money transfer over the last 30 days:
GBP/EUR – high/low change – 4.65% – €13,920 difference on £200k money transfer
GBP/USD – high/low change – 3.95% – $12,800 difference on a £200k money transfer
GBP/AUD – high/low change – 4.4% – AUD 13,180 difference on a £200k money transfer
GBP/NZD – high/low change – 4.55% – NZD 17,040 difference on a £200k money transfer
GBP/CHF – high/low change – 3.1% – CHF 8,960 difference on a £200k money transfer
As you can see it has been a poor start to the year but will it continue?
To me it is all a little surprising how far the Euro has moved, if you look at the fundamentals behind the UK and our European counterparts, surely we are still in a better position than Europe? One could argue that Mervyn King (head of the Bank of England) its getting his way as he has been open in calling for a weaker pound to improve the UK’s exports, he is also notorious for talking down the UK’s chances of short term recovery whereas Mr Draghi (his counterpart at the European Central Bank) is often far more bullish when it comes to European finances. For me this is somewhat of a facade and I for one feel this pair is due a correction heading back towards the 1.20 territory. Should you be selling Euros, for this reason, and whilst levels are not far from a 14 month high, it may well be worth considering your options – this may include the use of a forward contract allowing you to guarantee your position even if you do not have full availability of your funds.
As for the USD, AUD, NZD and CHF – the moves for these might be dependent on investor confidence. Currently investors seem to have found comments from many of the central banks as positive and hence we appear to have seen a drive towards riskier currencies such as the AUD and NZD. To me this trend may continue in the short term but I also feel the current sell prices should be attractive. To me it is inevitable problems in Europe will re-surface and this is likely to knock investor confidence, this may also be compounded as the extended US debt ceiling deadline draws closer in May. This could cause the USD to move back towards 1.60, and likewise a move away from the AUD and NZD. I also feel the Reserve Bank of Australia will continue with their monetary easing and this could also pile pressure on the AUD and NZD – I can see these moving back towards 1.55 and 1.93 respectively.
The major benefactor of falling confidence could be the CHF, and I see this staying strong for the foreseeable future.
If you would like updates on the market, register your interest by emailing me with your particular currency requirements (contact details, currency pair, volume and time frames). I would be happy to run through my current forecasts and to provide you with a quote for your upcoming exchange. I can be reached at firstname.lastname@example.org
Anyone with an interest in the pound should keep an eye on UK GDP tomorrow. GBP/EUR, GBP/USD, GBP/AUD and GBP/NZD forcasts
Sterling exchange rates have struggled since the start of 2013 falling 3.5% from the high when compared to the low. This is a substantial move in a little over 3 weeks and is a worrying trend for the pound.
For me the next big data set for anyone with an interest in this pair will be today’s eagerly anticipated UK GDP data. Following the NIESR (National Institute for Economic and Social Research) forecasting -0.3% growth for Q4 of 2012, the market is predicting the worst. Early indications are not particularly positive and were compounded yesterday following predictions from the IMF (International Monetary Fund) that the economy will expand by just 1%, less than the 1.1% they predicted in October and below the official Government forecast of 1.2%.
Preliminary forecasts are suggesting anywhere between -0.1% and -0.3%. I for one feel that should the data come in as expected or hopefully better than expected i.e. 0% or better then I believe the pound could have a better end to the weak. I am also a little surprised at how poorly sterling exchange rates have performed since the turn of the New Year. Yes recent data has not been as good as we had hoped for; however the fundamentals behind the UK economy are surely in a better place than those of our counterparts in Europe?
I for one feel this pair is due a correction and can see levels heading back towards the 1.20 territory. Should you be selling Euros, for this reason, and whilst levels are not far from a 1 year high, it may well be worth considering your options – this may include the use of a forward contract allowing you to guarantee your position even if you do not have full availability of your funds.
Where now for cable? Pound at a 5 month low
As with the Euro the pound has had a tricky start to 2013 when compared against the greenback. Cable rates have been steadily falling, moving just over 2% from the high to low this year (a difference of $6,720 on a £200k transfer). For me tomorrows GDP will also be key for the short term trends on this pair, but longer term the debt ceiling deadline expiring at the end February could cause some volatility for the USD. Anyone that closely monitors the currency market will be aware that ultimately the main factor that can drive the money markets is investor confidence. During times of confidence riskier currencies (typically currencies offering higher yields such as the AUD and NZD) will perform very well and the so called ‘safe currencies’ historically the USD and CHF will devalue. However the current market does not seem to be moving as expected and for this reason is becoming increasingly difficult to forecast, and potentially the USD is not the safe haven it once was?
On Wednesday the US House of Representatives approved legislation that temporarily suspends the requirement for Congress to approve the nation’s debt ceiling (initially due to expire at the end of February). Republicans voted to approve the nearly four-month suspension on limiting America’s borrowing, backing away from an immediate battle with President Barack Obama and a possible first-ever default on the country’s obligations. Until changing course, Republicans had been threatening to demand dollar-for-dollar spending cuts to match the increase in the nation’s borrowing limit. As a result the dollar has strengthened – something that may well continue and I can see this testing the 1.57/56 in the coming weeks. Longer term, watch out for the ‘debt ceiling’ to rear its ugly head again, this may well push dollar rates back towards 1.60 in the months to come.
As mentioned in the previous paragraph these currencies have far outperformed Sterling in recent weeks and months. In fact the Aussie is just 3 cents away from the all-time record lows seen in August 2012 and likewise so is the Kiwi. This to me is representing an excellent time for anyone selling these currencies as I for one feel the Reserve Bank of Australia is likely to continue with its monetary easing as seen over the past 18 months. I would expect another rate cut within the next 3 or 4 months as the RBA is again likely to be concerned about the strength of the AUD and the impact on its export market. I would also expect the slowing mining sector in Australia to directly impact the dollar (caused by falling growth in China) and this too is likely to put pressure on GBP/AUD – I would not be surprised to see a move back towards 1.55 as a result.
As for GBP/NZD – historically the Kiwi will track the AUD and I would expect a move back above 1.90.
If you would like updates on the market, register your interest by emailing me with your particular currency requirements (contact details, currency pair, volume and timeframes). I would be happy to run through my current forcasts and to provide you with a quote for your upcoming exchange. I can be reached at email@example.com
Pound exchange rates have struggled since the start of the year against most majors bar the US dollar, the burning question for many is will this continue? For me I am a little surprised at some of the moves, in particular the heavy losses we have seen against the Euro. I am still confident the Pound will have a better year against the single currency but early indications suggest any gains may be some way off. Moves have come about due to a couple of factors. Last week Mario Draghi (head of the European Central Bank) decided to keep the base interest rate for the Euro zone on hold at 0.75% – this was not wholly unexpected, however many analysts and market commentators (myself included) had expected a likely rate cut to assist the ailing European economy in the next few months. Following Draghi’s press conference this seems increasingly unlikely and as a result demand for the Euro has increased and hence so to the value. To compound this figures from the NIESR (National Institute for Economic and Social Research) a well respected think tank have predicted -0.3% growth for Q4 2012, making the dreaded triple dip recession very much a reality. This will be confirmed on the 25th January – a date that should be firmly in your mind if you are dealing with Sterling in the coming weeks. Of course if the figures are better than expected the pound may be grossly undervalued and a correction seen. Keep in contact with your broker to for up to date analysis of the current trading conditions.
The Australian Dollar has posted strong gains against the pound today rallying nearly 0.5% but has held steady against the single currency. This week is relatively quiet for the Aussie with the most notable data set being on Thursday with employment change figures. Figures will give clues as to the current performance of the Australian economy and could throw up some surprises for the dollar throughout the course of Thursday’s trading. Elsewhere data sets for the beginning of the week are dominated by European and UK data todaywith German GDP data and European trade balance figures followed by UK Inflation and Retail sales figures. Those looking at buying AUD with GBP should also keep an eye on a speech from the Governor of the Bank of England Mervyn King. King is scheduled to speak at 10:00 and historically can be overly cautious about the UK’s prospects, this could keep pressure on the pound and I see rates hovering around 1.5150-1.52.
EUR/AUD exchange rates have been relatively stable over the course of the last three months, reaching a high of 1.28 and a low of 1.22, the average trade price sitting in the region of 1.25/26. Current market levels are at 1.2652 and I personally see little change for this pairing in the coming weeks and would expect a range between 1.25/27.
AUD buyers or sellers may also wish to keep a close eye on GDP data from China on Friday. Figures are release early Friday morning and expected to rise from 7.4% to 7.8% year on year. With China being the largest net importer of raw materials from Australia, these figures can have a major impact on the Aussie value, with better figures from China generally meaning a strengthening of AUD. Better figures on Friday could boos the dollar and vice versa.
As a specialist foreign exchange broker my aim is to help my clients achieve the most from their current positions. By speaking with us early and giving an idea of timings for your exchange we can run through the best contracts to help maximise your exchange. Keeping in contact with your broker is essential in the current climate with big swings experienced across most pairings. To run though our service in full and for an in depth forecast then please email Mike at firstname.lastname@example.org