Tag Archives: GBPCAD
Asian Uncertainty leads to GBPJPY, GBPAUD, GBPNZD, GBPCAD and GBPZAR Spike. Will it last? (Jonathan)
I posted earlier this week on some positive news from China which had helped fuel strength on these currencies. Anyone who follows these currencies or the site may be aware that one of the main drivers on these currencies is risk sentiment. Risk sentiment can be summed up as investors attitude to risk. Are Investors keen to take a risk or not? Risk sentiment for these currencies, in particular the Aussie and Kiwi is being shaped by data from China and Japan as the Australian economy benefits from trade with these countries. And New Zealand having Australia as its main trading partner loosely tracks the Aussie. News of Japan potentially offering negative interest rates has weakened the JPY and provides some uncertainty as to the future direction of the Japanese economy.
Further interesting news this week was the new Chinese leader Xi Jinping coming into power. I have heard mixed reports over the direction Xi will be looking to take China and we are hearing tensions are still rife between Japan and China. Xi does not govern independently, he is part of a larger group of extremely powerful people in the Communist party who make the decisions. There is still a huge amount of secrecy and uncertainty over foreign policy and the decision making in China so it remains to be seen how China will react to global pressures and consequantly how this will impact the currencies mentioned.
I think it is fair to say no one wants China to continue to dominate and grow more than the Chinese. Therefore I think we can expect that good news will continue to emanate from the region as they do everything to keep the economy growing. This will ultimately keep the currencies relatively strong. A hint of uncertainty over this direction (which will as I say probably ultimately be positive) and over Japanese ties does seem to be presenting some small opportunities today. A couple of cents may not sound like much but trading £100,000 into Aussies at the high versus the low this week would have offered nearly 2000 more Australian dollars. By highlighting such movements and keeping an eye on things to buyers and sellers we can ensure you get the most from your money.
The global demand for raw materials continues and with it these currencies prosper. Consequently wobbles like we have seen this week will present opportunities for savvy buyers and sellers. The correct timing and approach to a currency trade can literally save you thousands so doing everything you can to maximise your exchange rate is key.
For a free, no obligation discussion of all the events affecting and driving your exchange rates please feel free to get in touch for further information. Jonathan Watson jmw@currencies.co.uk 01494 787 478
An end to the recent excellent GBPEUR rates? What will affect pound sterling exchange rates this week? GBPAUD and GBPCAD Forecast
GBPEUR has been trading at between 8 cents and 18 cents better rates than the low of last year at 1.1052 due to debt problems in Europe. Is this likely to continue? Well the last two weeks have actually seen the rate start to fall as the UK recession was recorded to be deeper than thought and Mario Draghi announced that he and the ECB will do everything they can to preserve the Euro.
With the all important Interest Rate decision tomorrow for both the UK and the Eurozone, I think tomorrow will be key in shaping the more immediate movement on GBPEUR. If you would like more information about the exact measures we might expect from the European Central Bank please read my post here http://www.eurorateforecast.com/2012/07/30/key-data-and-events-to-beware-of-on-euro-exchange-rates-this-week-will-the-euro-strengthen/
I expect that the movement will probably provide a spike anyone selling Euros should be prepared to take advantage of since ultimately the problems in Europe are unlikely to be solved quickly. Also Germany’s Constitutional Court are still ruling on the legality of German participation in the ESM and Fiscal Pact. The concern is the use of taxpayer funds and how they are to be spent. I would not therefore be getting too excited, but it is important to note what may happen.
The Euro crisis is affecting all currencies
Draghi’s comments last week rocked markets by changing attitudes to risk by investors. Market sentiment is one of the biggest movers of exchange rates and Draghi’s comments caused the USD to weaken by nearly 3 cents in a matter of hours, as investors sold off safe haven positions. Stock Markets also rallied so this gives some indication of how much importance the comments had on the markets. This makes it highly likely we will see some kind of announcement and indeed movement on rates this Thursday.
USD – Tonight we have the Fed Meeting which could easily move the dollar. Recent talk of QE may be limited by not as bad as expected GDP figures last week, but this is an important release which could move the market. Friday we have US Non-Farm Payroll data which again could move the market so if you need to trade dollars buying or selling speak to us to find out how to get the best rates.
AUD – The Aussie continues to defy expectations and is touching an all time high against the pound. Will it break through these levels? Well despite uncertainty in Europe investors are confident in the Aussie because o f its strong economy and healthy lack of government and public debt. Compared to the rest of the World the Australian economy is the A star student of debt. It has very strong exports of raw materials and this keeps the economy buoyant. Some say it is too reliant on China but with high interest rates and a solid economic outlook, this currency continues to be bought. If you are looking to buy Aussies with sterling it is likely you will continue to face disappointment.
CAD - Just like the Aussie, the Loonie is retaining strength because the country has a healthy balance sheet, i.e it does not owe lots of money to the rest of the world. Coupled with very strong demand for its natural resources (Oil and Timber to name two) this is keeping the currency strong. If you are considering any CAD trades please feel free to speak to me in order to find out all of your options.
If you would like more information about getting the very best rates of exchange please feel free to contact me directly on jmw@currencies.co.uk or call me on 01494 787 478 quoting PSF. I will explain all of your options so that you can make an informed decision and trade at the very best rate of exchange.
Will the pound remain this strong for much longer?
The pound has been on an incredible run of form in the last few weeks as fears over the single currency cause investors to change their positions according to changing economic sentiments. Sterling against the Kiwi, Rand, Loonie and Aussie has been at its best all year in the last couple of weeks. And against the Euro and Dollar too, the pound has made excellent gains which many have capitalised on. The question we can now ask is what next, will this run continue? We have covered in posts over the last few weeks how the pound has found favour because of the UK’s approach to its debts and budget deficit. Compared to the mire developing in the Eurozone, and the US’s reluctant attitude to confront its debt problems, the pound has found favour as traders feel the UK is setting itself up to be in a better position down the road. Is this really the case though?
There are a number of reasons why anyone hoping the pound will continue to make gains on EUR, USD, AUD, CAD, NZD, ZAR and all the rest should beware. Let me explain some of them here:
We are in recession! Stating the obvious perhaps? But when this was announced last month the pound barely moved against most currencies. Recession means the economy is shrinking. That makes dealing with the massive debt pile even more burdensome. With Mervyn King himself predicting no return to growth until the later part of the year the economy and the UK’s ability to tackle its debt has therefore stalled. Will those investors who currently favour the UK’s approach be so supportive if the very measures designed to keep the UK ‘safe’ are in fact doing more harm than good? I would not be surpised to see a real run of bad data in the coming months particularly with the Eurozone crisis going from bad to worse.
UK plc needs a strong Europe You do not need to read too far in the press to find negative comments about Europe. This has and probably always will be the case. The reality nowadays is the UK needs a strong Europe to keep our economy strong and foster growth. One estimate puts at 40% the amount of trade the UK receives from Europe. Many of the private businesses Mr Cameron and co regularly put pressure on to drive through the recovery, rely heavily on orders from Europe. The UK is also deeply exposed to the European debt crisis through our banking sector. If the banks runs in Europe continue to weigh on the European banking sector and the Governments and banks cannot pay back their debts to the UK, we could see UK banks needing recapitalisation. The UK is still limping, licking its wounds from the last financial crisis. The last thing it needs is another kicking now! If considering any transactions involving the pound the next few weeks could really push things one way or the other. To find out more specific to your requirements please feel free to contact me personally on jmw@currencies.co.uk or call +44 1494 787 478.
More QE may be inevitable More Quantitative Easing may be the only option to kickstart the UK’s economy later this year after we are all partied out from the Olympic and Queen’s Jubilee celebrations.
Markets move on sentiment and rumour The currency markets are often only reflections of sentiments. Currently the UK is favoured but this can quickly change. This Thursday, May 24th we have the first revision of UK GDP data for Q1. This data could well expose the reality that the situation in the UK may well get much worse before it gets better. Despite the huge undertakings by the current government the UK’s debt position is still torrid. The fear that may easily creep into investors minds in the coming weeks may be the reality the coalition has cut too much, too fast and has choked off the recovery. Remember it only needs to be these sentiments that develop for the situation to turn. If you are considering an exchange and are happy with current levels or would trade at a slightly better rate why not make us aware? Our highly personal service is designed to ensure you get the most from the markets and we can be your eyes and ears in the market.
I feel personally that with so many clear challenges ahead for the UK, the current positive sentiments for the pound may soon falter. One thing you should always prepare for on exchange rates is the unexpected and if considering any currency exchanges at the moment, to beware of all the events that could move your rate. The current Eurozone crisis may only get more problematic in the coming weeks and the negative effect this could have on the UK and the pound should not be forgotten.
Here at pound sterling forecast we are currency specialists working for the UK’s top currency brokerage. Through this website we can not only offer our expert analysis and opinion, but can also personally assist prospective clients with our award winning service and rates. I have never had any trouble making sure anyone who contacts me via this site gets the very best rates. Even if you have another source you are using, it is always worth a second opinion to double check what you are doing and that you really are getting the best deal. We offer a highly personal service to clients all over the world so to find out more about all of your options please feel free to email me directly on jmw@currencies.co.uk or call +44 1494 787 478.
I look forward to hearing from you.
Last Chance Saloon before UK GDP figures tomorrow… What will happen to the Pound ahead of the most important Sterling data release this year?
Here at PSF we have been highlighting one date for everyones diary buying or selling the pound. And that is the 25th April, tomorrow’s UK GDP figures. Since the start of the year when we found out that in the last quarter of 2011, the UK economy contracted, investors and traders have been waiting with interest the 25th April as it will determine whether or not the UK is in recession.
A recession is technically two quarters of negative growth. With tomorrow’s estimate for Q1 of 2012 estimated at 0.1%, there is very little room for error. If the figures are 0.1% out in either direction we are surely to see movement on the pound. I would expect a negative figure to lead to sterling losses as in my opinion the pound is trading strongly on an assumption the figures will be positive or as expected. Strong Retail Sales for March, improved PMI surveys and other data have all seem to indicate the UK will have narrowly avoided recession.
This decision could really go either way and is in my opinion the most important piece of data to affect the pound this year. If you are looking to buy or sell the pound soon, it is critical to be aware of the possible outcome and affects on the currency. Even though the decision is tomorrow, you could be talking to us in minutes by calling 01494 787 478 or emailing jmw@currencies.co.uk. Dealing with us is totally free and at no obligation. We can quickly explain all of your options so that you can then make an informed decision abvout what you want to do.
The pound is touching fresh highs against the CAD, the Aussie, the Kiwi, the Euro, the Dollar and the Rand. The data coming out worse than expected could really pull the rug from under the pound’s feet. If you are one of the tens of thousands of readers of our blogs and are interested to learn more about all of your options ahead of this event, please feel free to call us on 01494 787 478 or email me directly on jmw@currencies.co.uk
We have saved thousands of people thousands of pounds because we can not only offer information to assist with the actual timing of your exchange, but also provide an extremely sharp commercial rate of exchange. As specialist currency brokers we have years of experience dealing with a variety of private clients and businesses who need to move money internationally. We will always go that extra mile to win business for anyone who contacts us via this site, so why not find out for free if you could be getting a better deal? We actively undercut the banks and because we work for an independent broker choose where we buy from, meaning we can undercut other brokers too. Why not make a free quote request to me directly?
Important data Today
This morning we have Public Sector Net Borrowing at 09.30 which is expected to show government borrowing increased in March. Aside from some US housing data out at 13.30 the real news on the markets will be more fallout in Europe. To be kept up to date with how all of these important events pan out please feel free to get in touch on 01494 787 478 or email me directly jmw@currencies.co.uk
I look forward to hearing from you and assisting you with the best deal
Jonathan
Canadian Dollar surges on higher inflation
Sterling’s biggest loss of the day was against the CAD yesterday as Canada’s annual inflation rate jumped to the highest level in eight years last month, rising to 3.7 per cent, much higher than economists had expected. That prompted speculation that the Bank of Canada may have to raise interest rates earlier than expected and calls are for a rate hike before the year end. The pound lost around 2 cents against the CAD after the data release. If you had traded before the data release you could have achieved an extra $3780 on a £200K purchase.
We have seen the pound fluctuate by over 6 cents in the last month alone and for those with a requirement to buy Canadian Dollars the outlook is bleak if interest rates start to rise by the year end.
If you want to speak with us regarding any future exchanges that you need to make please feel free to contact me on bma@currencies.co.uk
Sterling Euro Spike – gains for the pound today
Sterling euro exchange rates are closing in on the 1.16 interbank level today, following comments from ECB Economist Otmar Issing who said that Greece is ‘insolvent’.
This has weakened the euro and seen flow into the British pound. Couple this with poor GDP figures from the US – further reducing the chance of an already slim interest rate hike in the states. The pound has benefitted in flow from USD to GBP as well and is up half a percent in trading today.
The pound has made good gains against a number of other currencies as well including the New Zealand Dollar GBPNZD, Canadian Dollar GBPCAD and Mexican Peso GBPMXN. If you have a currency requirement in these or any other currency pair, contact a specialist dealer by filling in the form on the right. The currency dealer will be able to explain how you can save money on your transfer and benefit from the very best exchange rates.
Commodity Currencies (AUD, ZAR, NZD, CAD) fall on fears for Chinese Markets
I’ve been asked by lots of clients over the last couple of days what is happening with the commodity linked currencies i.e. the Australian Dollar, Kiwi Dollar, South African Rand and Canadian Dollar. The reason I’ve been asked about these currency pairs so much is that they have lost a great deal of value since the start of the year, (making them cheaper to buy for anyone holding sterling) as you can see below:
GBP /ZAR +9%
GBP/NZD +5%
GBP/AUD +6%
GBP/CAD +4%
While there are some market movers unique to each individual currency (e.g. for the Aussie Dollar, the floods in Queensland have caused weakness) the overriding factor that has moved exchange rates is demand from China. As all the economies of the currencies mentioned export huge amounts of commodities to China, concerns over demand in the Chinese economy, translate directly to concerns for the economy exporting. It is also worth bearing in mind that these currencies have been very strong recently as investors have been keen to hold funds in appreciating currencies.
The reason for the demand concerns from China is rapidly rising inflation in the Chinese economy. As a result policy makers are set to tighten money supply to curb price rises. The know on effect however is that demand in the economy could fall and subsequently fewer commodities are likely to be imported.
Looking ahead it’s likely that these currencies will continue to be highly sensitive to economic policy in China. Considering the closed nature of the Chinese economy, forecasting monetary policy and political moves is very difficult. Subsequently how the AUD, NZD , ZAR and CAD move going forward is particularly unpredictable.
If you need to buy or sell any of the commodity linked currencies discussed, fill in the form on the right and one of the specialist brokers who write on www.poundsterlingforecast.com, will be in touch to look at the options open to you ovmoving forward.
