Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

Pound makes gains vs the Euro and could we see further gains when the Bank of England meets on Thursday? (Tom Holian)

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The Pound has had a good end to the week vs the Euro after much better than expected UK Retail Sales data which were published on Thursday morning.

The better weather caused Retail Sales to jump higher than the estimated figure and this in part caused the Pound to have the biggest improvement against the Euro in one day all year.

The good news was further exacerbated by the European Central Bank’s announcement to end their QE programme in December.

The previous expectation was to end it in September so to carry it on until December caused the Euro to weaken.

The further losses for the Euro came when the central bank suggested that any interest rate hike may not be coming for a very long time and this also panicked investors which caused the Euro to come under pressure against a number of different currencies including vs the Pound and the US Dollar.

With the US having raised rates twice this year and seven times since December 2015 this caused a big sell off from the Euro and into the US Dollar.

As we go into next week the big day in terms of movement is likely to come on Thursday when the Bank of England hold their latest interest rate meeting.

Previously the Bank of England kept interest rates on hold with a 7-2 split but with Retail Sales showing a massive improvement this could potentially provide some evidence in favour of hiking interest rates in the future.

I personally still think a rate hike is a long way away but if there are any hints that one may be coming then this could potentially send GBPEUR exchange rates up towards 1.15 if the news is positive next Thursday.

If you have a currency transfer to make in the future and would like to save money on exchange rates compared to using your own bank then contact me directly for further information or a free quote.

Email me Tom Holian teh@currencies.co.uk

Brexit related politics likely to be the biggest driver of GBP exchange rates next week

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Sterling dropped in value yesterday after the latest Brexit related announcement was made.

There are conflicting opinions within the Conservative government as to whether or not there should be a open ended period of time that the UK remains a part of the Customs Union, should a deal not be in place by March of next year as planned.

The topic is heated to the extent that the current Brexit Secretary, David Davis had been rumoured to plan to step down if he didn’t get his way on this. He wanted there to be a time limit on how long the UK would remain part of the Customs Union if there is no plan in place, so based on yesterday’s market movement his plans aren’t favoured by the markets.

Next week there will be discussions amongst British lawmakers regarding the Brexit Bill and the amendments to it proposed by the house of lords recently. I expect this topic to have the potential to move markets depending on what’s confirmed. At the moment Brexit related news appears to be the biggest mover of the Pounds value, especially now that the interest rate hike from the BoE is likely to be pushed back towards the end of the year.

If you would like to be notified in the event of a major market movement, do feel free to register your interest with us.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Flat day for Sterling with little data released, but what factors could impact the Pounds value in future?

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There hasn’t been much movement on the currency exchange markets today, as there hasn’t been any major data releases or political unfolding’s to provide the Pound with much direction.

Its likely that moving forward GBP exchange rates will continue to be driven by politics for the most part, especially surrounding Brexit related updates but I think that economic data is beginning to have more of an influence on the Pounds value.

Sterling would most likely be trading at a higher level than its current prices had the interest rate hike from the Bank of England earlier this month of actually taken place. Once the data begun to disappoint the markets, showing that the UK economic output in the first quarter of this year has dropped off to a 5-year low, hopes of the rate hike slipped which pushed the Pound lower.

If economic data picks up, and talk of a rate hike later in the year increases I think we can expect to see the Pound climb.

Tomorrow morning there will be Manufacturing data released out of the UK, and then on Monday Construction data will be released. Services data, which is the most important sector in the UK will be released on Tuesday so its worth watching the markets at 9.30am if you have a currency exchange to make involving the Pound.

Friday will perhaps be the busiest day next week, and if any of our readers would like to discuss why, feel free to get in touch.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Stronger day for Sterling as UK Retail Sales rebound, is this a turning point for the Pound?

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After some disappointing economic data yesterday morning, the Pound has seen a reverse in its fortunes today after some positive data was released this morning.

Yesterday’s data showed a shock drop in inflation, with the figure released being lower than the markets were expecting to see. This resulted in the Pound weakening as the chances of a rate hike in the short term future declined, with some economists now suggesting that there may not even be one this year.

This morning on the other hand has seen a stronger Pound after some more upbeat news. The Office for National Statistics (ONS) reported that UK Retail Sales grew at 1.4% on an annual basis, which is a much stronger gain than the markets were expecting as a figure of 0.1% had been penciled in. The monthly figure also picked up and doubled the expected figure, and this area of the market is under close scrutiny at the moment due to both poor figures owing to the poor weather earlier in the year, and also the changing high street.

A slowdown in the economy has stopped the Bank of England from hiking interest rates, so any positive news is welcome for the Pound in order to stop the currency losing further value. It’s been coming under pressure ever since the governor of the BoE, Mark Carney hinted at there being no interest rate hike this month.

You can register your interest with me if you wish to be updated in the event of a major move for GBP exchange rates.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Help Trading Sterling – (Daniel Johnson)

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The Pound Remains Fragile

The pound has fallen significantly against the majority of major currencies following a host of poor economic data. This has put a halt to a rate hike from the Bank of England (BOE). It looks as though a rate hike this year is now unlikely.

GBP/USD – Sterling has fallen heavily against the greenback, this is not just due to the poor monetary policy forecast from the BOE it is also due to positive news from the US. US Treasury bonds now have a yield over 3% for the first time in years. The US Dollar is now proving to be very attractive for investors, high returns in a currency considered to be a safe haven.

The US and the Chinese have recently agreed to put a halt to the trade war under the premise that China will purchase USD 200bn worth of US goods and services which has also been a catalyst for Dollar strength.

 USD Buyers – Pray, just kidding. The way things are looking at present, if you have to move short term aim for 1.37. Be prepared to lower your expectations 1.40 is now going to be difficult to achieve.

USD Sellers – You are in an exceptional position, Brexit uncertainty and poor economic data means rate are favourable. There is the possibility for further gains, but greed could prove costly.

GBP/AUD – The Australian Dollar has also benefited from the truce in the trade war from China and the US. Australia is heavily reliant on the Chinese purchasing it’s raw materials, in particular iron ore. The heavy tariffs to be imposed by the US would no doubt have an impact on growth which in turn would hit the Australian economy. News of the China -US truce along with the poor data and interest rate outlook for the UK has caused GBP/AUD to drop as low as 1.76, a long way for  the recent highs of 1.84.

AUD Buyers – Australian Dollar buyers should be aware of new buoyancy levels that I would expect to be between 1.75-1.80. Aim for 1.79 if you have to move short term.

 AUD Sellers – The Reserve Bank of Australia’s (RBA) monetary outlook is quite pessimistic, it is unlikely there will be any change in interest rate until 2019. The pound is chronically undervalued due to Brexit and will rally, when is the question.  A deal between the EU and the UK is meant to be in place by October although I am confident this will not be met. Clarity on the matter will no doubt cause significant Sterling strength.

Aussie sellers, considering a nearly 10 cent gain, take advantage of current levels.

GBP/EUR – Sterling has proved resilient against the Euro. Unfortunately this is more due to Euro weakness than any positive news from the UK. The Italian coalition of League and the 5 Star movement is a concern for the Eurozone. There is the intention to increase public spending significantly and and also make huge cuts in taxes. Italy is the the bloc’s most indebted country behind Greece. Italy’s current debt is 130% of it’s GDP.

There is also talks of the Eurozone consolidating all debt into one large debt pool to avoid any Countries suffering a similar situation to Greece. Germany, the engine room for the Eurozone is trying to avoid taking any part in this and is currently making plans to eradicate all it’s public data in an attempt to avoid taking any part of the debt pool.

The Euro has lost value as a result.

 EUR Buyers – The peak of the market in the last 12 months is 1.1599. Considering the current state of the UK economy aim for 1.1450 if you have to move short term.

 EUR Sellers – You are in a very favourable position be wary of hanging on for significant gains, be aware GBP/EUR was 1.42 + pre-Brexit. Move in the 1.13s.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Thank you for reading.

Reasons why the Pound could hit 1.15 next week

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After the news broke that the Bank of England would be keeping interest rates on hold yet again with a 7-2 split in favour of keeping rates the same the Pound fell after hitting the best level to buy Euros since May 2017.

Since then the Pound has made a small improvement against the single currency as it appears as though the UK is making progress with the Customs Union with a plan being mooted about keeping it in place for the next 3 years until an agreement can be sorted with Ireland.

Although we have yet to have a solution, the period of certainty going forward has meant that the Pound made some gains vs the Euro.

However, although the Pound had a brief respite the focus is likely to turn towards what will happen next with the Brexit negotiations which have weighed heavily on Sterling Euros exchange rates.

Therefore, any gains in my opinion for the Pound could be fairly short lived so it may be worth taking advantage of this short term spike in the Pound’s favour.

Next week there is a lot of data due out for the UK with UK inflation due for release on Wednesday morning.

With inflation such an important factor in what the Bank of England will do going forward this could have a lot of influence on GBPEUR rates shortly after the release.

On Thursday UK Retail Sales are due to be published and I think we could see a large difference compared to the previous month as the weather has been much more stable which in theory should have encouraged consumers to start spending again.

Overall next week I think we could see GBPEUR rates break 1.15 and as we have seen during the last few months when this rate is around it doesn’t last for too long.

If you have a currency transfer to make and would like to save money compared to using your bank then contact me directly for a free quote and a brief outline of your particular requirement.

Enjoy your weekend and I look forward to hearing from you

Tom Holian teh@currencies.co.uk

Will the Pound to Australian Dollar rate now remain below 1.80, and which factors are likely to influence it?

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After opening above the 1.80 mark yesterday, the pair have since fallen below this benchmark and they’re currently trading in the 1.79’s.

There doesn’t appear to be as much resistance/support around this level in the current market, after 1.80 has acted as a resistance for some time. The fall for the Pound today appears to be down to the latest Brexit update, and I wouldn’t be surprised to see this topic continue to influence exchange rates for the remainder of the year and potentially even further into the future.

Today’s update is in relation to the UK government confirming that the UK will not be part of the Customs Union after Brexit. There have been hopes that the UK would remain part of a EU Customs Union post Brexit, and it’s understandable why as once goods pass into the union there is no longer a need to apply taxes as the goods pass through the area and across borders.

The Pound’s slight drop today will be down to fears surrounding this matter and how it will impact the UK economy over the next few years. The next time this matter could move the markets quite dramatically is within the next couple of weeks when a White Paper will be published highlighting the progress the UK’s negotiators have made so far.

Apart from Brexit I think how the central banks of both the UK and Australia act this year will also influence rates. There are no hikes expected down under but there is from the Bank of England later in the year, perhaps offering the GBP to AUD rate an upward bias around that time.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Difficult period ahead for the Pound after Bank of England keep interest rates on hold

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The Pound has had a difficult end to the week following the announcement by the Bank of England to keep interest rates on hold at just 0.5%. The split was the same as before with MPC members Ian McCafferty and Michael Saunders both voting for an interest rate hike.

This did not come as too much of a surprise after the very low GDP figures a fortnight ago but what caused the Pound to really drop was that the UK’s growth forecast was downgraded from 1.8% to 1.4% for 2018 which had previously been predicted in February.

This downgrading is a real concern as we are still in the midst of trying to work our way though the Brexit discussions so things at least for the time being look rather uncertain for the Pound against a number of different currencies.

Indeed, when looking at the rate to buy Euros with Pounds it has fallen by over 2% in the last fortnight or the difference of £1,700 on a currency transfer of €100,000 and the Dollar has improved by as much as 5% in the last month or the difference of £4,200 on a transfer of USD$100,000.

As we go into next week we could see a lot of movement for Sterling on Tuesday as there are a number of key important data releases ahead for the UK.

We begin with UK unemployment data as well as average earnings and both have been improving in recent times. Indeed, as average earnings outpaced inflation at last month’s reading this was one of the justifications of a potential rate hike so if we see another improvement could this help the Pound fight back against the Euro and the US Dollar?

Shortly afterwards the Eurozone will announce its latest set of GDP data with expectations for 2.5% growth so anything different is likely to result in a lot of volatility for GBPEUR exchange rates.

Having worked in the foreign exchange markets since 2003 for one of the UK’s leading currency brokers I am able to offer you bank beating exchange rates as well as helping you with the timing of your transfer.

For a free quote then contact me directly by calling 01494787478 and asking for Tom Holian when calling or email me directly with a brief description of your currency requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Sterling exchange rates continue to weaken, will next week bring change for the Pound?

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The financial markets are geared up for what could be a busy week for GBP exchange rates next week. For the past month or so now the value of the Pound has been influenced by expectations of what the Bank of England will do at their next meeting on the 10th of May, one week from now.

At one stage markets were pricing in an interest rate hike completely. The expectation was for a move upward to 0.75% which would be the highest level since the UK exited the recession almost a decade ago.

In recent weeks a combination of weak economic data and political uncertainty has resulted in a fall for the Pound’s value. The reason or the fall was due to hopes of the hike fading, and once the governor of the Bank of England, Mark Carney ruled out when the next rate hike would happen the Pound fell immediately. In the lead up to this, Sterling was in the headlines for the right reasons after hitting an 11-month high against the Euro and a post-Brexit vote high against the US Dollar.

Now there is little hope of the 0.25% rate hike, hence Sterling softening. Some bulls are hoping for a 0.10% rate hike but after GDP figures showed a fall to a 5-year low in the first quarter of this year, I think this is unlikely and that we may even see the Pound fall further next week once no rate hike is announced.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

May Rate hike from the BOE now in question (Daniel Johnson)

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BOE Interest Outlook weakens Sterling

After recent gains for the pound against the majority of major currencies we have seen the fragility of sterling demonstrated. We have seen a fall in inflation,retail sales and GDP. GDP fell to a five year low at 0.1%. A rate hike from the Bank of England (BOE) was largely factored into the exchange, but following a host of poor data we could see a hike delayed and this is the cause for the current fall in the Pounds value.

There are also concerns regarding the customs union situation. Theresa May will hold a cabinet meeting tomorrow on whether Britain should remain in a customs union with the EU. Brexit negotiator Oliver Robbins is pushing forward a proposal that will keep the UK in a customs partnership and Theresa May is behind this proposal, unfortunately the majority of the cabinet are not so keen. Keep a close eye on developments as this has the power to influence the markets.

GBP/EUR – Sort term euro buyers move if GBP/EUR goes above 1.1450. (1.1599 has been the peak in the last 11 months)

Euro Sellers – Despite the fragility of the Pound, it is still chronically undervalued. Pre- Brexit levels were 1.42. Move in the 1.13s.

GBP/AUD – Buyers move in the 1.84s, sellers 1.82s

GBP/USD Sellers you are in a very strong position at 1.36. Buyers anything above 1.40.

If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk .