Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

Mixed start to the week for Sterling so far, what factors could impact the Pound to Euro rate this week? (Joseph Wright)

by

The Pound has begun the week with no clear sense of direction as its performance is mixed against the major currency pairs this morning.

This is likely due to financial markets awaiting news on the five new papers on Brexit that will be released this week. Last week there was a release of the first white paper which covered the freedom of movement between through the Northern Irish border which resulted in a slight boost to the Pounds value.

Inflation data last week disappointed resulting in less likelihood of a rate hike from the Bank of England this year which was Sterling negative, so moving forward I think those hoping for a boost to the Pound’s value will hope the markets receive news of the five new white papers as positive.

With Brexit negotiations apparently beginning badly and Brexit Secretary David Davis implying that the European Chief Negotiator Michel Barnier is getting a bit ‘fed up with us’ I think there needs to be a real positive for the UK in order to give Sterling a much needed boost, especially now that GBP/EUR is trading below 1.1o.

Aside from the five Brexit papers we’re waiting on there will be Public Sector Net Borrowing figures for July released tomorrow at 9.30am which could impact rates. Then at 9.30am on Thursday UK GDP figures will be released with 1.7% growth the expectation Year on Year. Expect any deviations form this figure to have the potential to move the markets.

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.

When should I buy my pounds? Will the pound drop lower?

by

The pound has fallen to record lows in the last year triggering huge investment into the UK. It has also created some excellent selling opportunities for anyone holding a foreign currency to buy the pound following say a business transaction or overseas property sale. 100,000 Euros sold today would get you £15,000 more than before the Referendum. 100,000 US dollars sold today would get £11,000 more than before the vote. Such swings are once in a generation events that occur every decade or so. Think the financial crisis of 2007-8 or the ‘Black Wednesday’ in 1992. So has the recent demise of sterling hit a bottom yet or is there further pain for the pound to come?

I am now beginning to feel that the pound has been oversold and that there is now from an investors point of view more reasons to be positive about the pound than negative. Whilst Brexit will continue to be a weight around the neck of the pound I cannot help but feel the strong employment situation in the UK and improved global economic conditions are reasons to be more positive for the future. With UK Unemployment falling to its lowest since 1975 and us having avoided recession or worse since the vote, I think there are many reasons that the UK’s highly skilled flexible economy will drive us through what are clearly going to be a few challenging years.

Brexit is taking shape and it is clear we are going to engage some form of transitional phase that retains as much trade as possible with Europe. Already we are seeing great concessions on Immigration, arguably one of the most sensitive issues of the vote. This leads me to predict we will have a very pro – trade, pro – ‘European’ Brexit. All of this will ultimately be very good for the pound at some point and I do feel as this news starts to filter through the pound will rise.

Remember GBPEUR is at 1.10 partly because the Euro is so strong. Although Euro weakness could be on the horizon as the European Central Bank released commentary yesterday that they fear a strong Euro. I think this pair could now gradually rise as the ECB scales back it’s stronger rhetoric and the weakness on sterling stimulates investor interest.

GBPUSD is at 1.28 because the US have been raising interest rates and there had previously been a very positive view of the Trump administration from a business and financial market perspective. This is gently being unwound and I do believe a more resilient pound will now start to gently chip away at the US dollar as confidence in Trump continues to decline.

Once in a generational events like Brexit, Black Wednesday and the last financial crisis create great opportunities that do not happen very often. Getting exact timing with these situation is never an exact science but with the pound currently touching close to its lowest points against many currencies whilst progress is being made in Brexit talks, suggests to me further dramatic GBP weakness is now much less likely.

To really make the most out of a currency transfer the timing of the exchange is as important as getting the best rates. Luckily we can help with both so if you need to move any funds in or out of the pound why not get in touch to find out more about the best time to transfer your money and get the best rate you can.

Any information provide is completely free of charge , all you need to do is fill in the form or email me directly on jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from and assisting you.

UK Inflation Set to Bring Major Volatility (Ben Fletcher)

by

This morning at 9.30am the latest UK Consumer Price Inflation figures will be released for July, which is a indicator of inflation. There is a expectation that the result will be a slight increase from 2.6% to 2.7%. Last month the inflation level dropped from 2.9% to 2.6% raising doubts of a interest rate hike and the GBP/EUR rate dropped by nearly two cents. Today if inflation does rise slightly faster than expected then I think Sterling could see one of its strongest days in a while, with a movement above 1.11 a real possibility.

There will also be Producer Price Index which indicates the difference of the cost of producing goods for manufacturers. Once again any positive date could have a significant effect on the market.

Sterling’s main hope of a revival comes in the form of a interest rate hike. A rate hike will always help the host currency to strengthen so if inflation does climb up to the 3% level again, then the Bank of England may be forced to act.

UK Government put forward temporary Customs Union

The British Government in an attempt to calm down UK business uncertainty are going to suggest a temporary Customs Union be put in place with the EU whilst trade talks take place. At the moment the 2019 Brexit deadline looks like it may come to soon and British businesses may face something of a cliff edge. This suggestion if received well by the EU negotiating team could help Sterling find support as the uncertainty and risk become slightly diminished.

If you do have a question with regards to my comments or have a different question please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me Ben Fletcher at brf@currencies.co.uk

Sterling’s short term future looks bleak (Daniel Johnson)

by

When will the Pound have the opportunity to Rally?

Sterling continues to lose value against the majority of major currencies. I am struggling to find reasons to base a pound rally on. Brexit negotiations will be key to the Sterling value for the foreseeable future and at present things are not looking good. It is vital to have a stable government for a strong currency and also in order to be in a strong position at the negotiating table. Theresa May’s position is currently under threat with fifteen members of the Conservative party putting forward a vote of no confidence.

Inflation is also a concern. The Bank of England (BOE) had indicated there was the possibility of an interest hike should inflation move above 3%. Inflation then fell to 2.6% and the pound lost value as a result. I am of the opinion this is a good thing, inflation is only considered a positive for an economy if average wage growth is at a similar level. Current figures on wage growth are some way behind at 1.8%. If consumers are not willing to pay for over priced goods and services the country could be destined for recession.

One of the only reasons I can see substantial gains for Sterling is a further rapid rise in inflation and the chances of an interest rate hike become more likely. As mentioned however I do not think this is healthy for the economy  a rate hike is not the solution  to this problem.

GBP/EUR

Eurozone growth has been impressive and sustained. The difference between current growth levels than that of the past is that the economy is growing across industry sectors and there is also wide spread growth geographically. The European Central Bank (ECB) have also hinted at a possible tapering of Quantitative Easing (QE). QE is essentially pumping money into an economy in order to stimulate growth, current monthly increments are €80bn, if this is reduced the Euro will strengthen significantly. There is a small opportunity for Sterling to rally when the German election commences in September when political uncertainty could weaken the Euro.

GBP/USD

There is the chance of further falls for Sterling due to Guam situation. Conflict causes investor to seek safe haven currencies and despite the US being at the forefront of the standoff with North Korea the US Dollar is still the safe haven of choice.

GBP/AUD

Down under the strength of the Australian dollar is a concern due to the heavy reliance on trade partners buying Australian raw materials. Reserve Bank of Australia (RBA) governor Philip Lowe will know doubt attempt to jaw bone and talk down the value of the Aussie rather than making a  more drastic change to monetary policy. I doubt jawboning will have the desired impact.

Hans Redeker from Morgan Stanley recently stated “We expect the AUD to continue to move higher in the short-term as yield-seeking behavior continues,”

The high interest rates  offered in Australia are currently very attractive to the investor and this could be the cause for further AUD strength.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you are selling Sterling, windows of opportunity may be brief. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

Will the Pound continue to climb in the lead up to ‘Super Thursday’? (Joseph Wright)

by

The Pound is edging up this morning, and notably hit a 10-month high yesterday against the US Dollar as yesterday morning there was some impressive Manufacturing data released.

Although much of the build up within financial media surrounds tomorrow as there is a high volume of data out of the UK, the positive sentiment surrounding the Pound could continue this morning as at 9.30am there will be the release of the Construction equivalent of yesterdays Manufacturing data (Purchasing Managers Index).

Purchasing Managers Index (PMI) data reflects sentiment from within the respective sector, so I expect a rise in the Pounds value if this data comes out better than expected. Tomorrow it will be PMI data at 9.30am for the important Services sector that will get the ball rolling in terms of data releases before the Interest Rate Decision is released along with a speech from the Bank of England’s governor, Mark Carney.

If you’re researching and planning an upcoming currency exchange and would like to discuss it, do feel free to get in touch with me as planning around this weeks key data releases may be a good idea.

Tomorrow lunchtime is expected to be particularly busy and I’ll be happy to discuss the main releases and expected outcomes.

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.

What data released this week could impact Sterling exchange rates? (Joseph Wright)

by

If you’re planning on making a currency exchange involving the Pound this week, it’s worth being aware of what data is due for release and how sensitive the markets may be towards it for a number of reasons.

Firstly, during sensitive news releases the markets can swing quite suddenly making a make difference the amounts involved in your transaction. The movement generally depends on whether the data released is in line with the expectations.

Secondly, when the markets are volatile around these times the exchange rates can widen making them less competitive, which is why we generally look to help our clients trade during quiet times within the week in order to not be negatively impacted by this.

The most important day involving the Pound this week will be Thursday, due to the volume of data scheduled for release.

On Thursday at 12pm we will find out the Bank of England’s Interest Rate Decision as well as get an update on the Bank of England’s current asset purchasing facility. There will also be a discussion afterwards and the Governor of the BoE Mark Carney will also be speaking from 12.30pm onwards so lunchtime on Thursday is likely to be a time to avoid if you wish to trade during quieter times this week.

There could be a negative move for the Pound if the BoE are dovish in their comments on Thursday so if you are risk adverse it may also be an idea to consider making this transfer prior to ‘Super Thursday’.

At 9.30am on Tuesday, Wednesday and Thursday there will be data releases covering business sentiment within different sectors from within the UK, so keep an eye on the markets around this time also and feel free to get in touch if you wish to discuss these news releases.

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.

Could the Pound fall even further against the Euro next week? (Tom Holian)

by

Sterling is now trading at its lowest level to buy Euros for over 8 months as the Brexit uncertainty is causing huge amounts of pressure for the Pound.

Although UK GDP published on Wednesday came out as expected with the release of 1.7% year on year for the first quarter the news was not taken positively for the Pound and this caused GBPEUR exchange rates to continue to fall.

At the moment the uncertainty caused by the Brexit is weighing heavily on Sterling and this does not appear to be slowing down.

EURUSD exchange rates are now at their best level since January 2015 and it is becoming clear that not only is Sterling weak but the Euro is very strong against a lot of other currencies at the moment.

Indeed, with the European Central Bank hinting earlier this month that they may be looking at tapering their current QE programme in the near future this has led to an improvement on confidence for the Eurozone and therefore the single currency has strengthened.

We start next week with the release of Eurozone inflation data on Monday morning and this could provide a key as to how the ECB will react with monetary policy when they meet early next month.

I personally think that if the data comes out as expected this could send GBPEUR exchange rates lower so if you’re looking to send money to Europe in the near future then keep a close eye out on what happens.

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Selling a property in Europe and the impact of GBPEUR rates (Tom Holian)

by

If you’re in the process of selling a house in France or Spain over the next few weeks you may find that things tend to shut down during the month of August.

This is typically when solicitors and Notaires tend to take their holiday and so if you’re in the middle of selling your property it may be prudent to find out when they take their time off.

In my experience which dates back to 2003 on a number of occasions property completions can be delayed for a couple of weeks, if not longer, and this can result in funds being delayed before reaching the client.

This adds a huge amount of uncertainty as to what may happen to GBPEUR exchange rates during this period and the obvious tool to combat this uncertainty is to look at buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

Rather than running the gauntlet and having to wait until the actually get your funds this allows you to know exactly how much Sterling will come back to you once you’ve fixed your exchange rate in advance.

There is a lot of uncertainty in the currency markets at the moment owing to the Brexit negotiations and with Euro trading at its best level to buy Pounds since November 2016 it may be worth taking advantage of these current levels.

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Sterling’s uncertain Future (Daniel Johnson)

by

Is there the chance of  a Pound Rally?

Sterling has had a torrid time of late, GBP/EUR sitting just above 1.12 at present. A small increase in GDP this morning did little to bolster the pounds situation. There are many catalysts for pound’s position and I am finding it difficult to find any reason for the pound to rally. The vote to leave the EU is now having a serious impact on the UK economy. UK Inflation has been on a rising rapidly recently hitting 2.9%. The Bank of England (BOE) were potentially going to raise interest rates if the increase continued, with several members of the Monetary Policy committee (MPC) in favour of a hike. The rate hike rumours had caused a short period of Sterling strength, however  the latest inflation data saw a drop to 2.6%. The chances of a rate hike are now significantly less.

I am of the opinion a rate hike is not a solution to the rise in inflation and a fall  in inflation figures brings it closer to average wage growth at 1.8%. I perceive this to be positive for the UK economy despite a fall in the pound. There is a close correlation between average wage growth and inflation. Now imported goods are more expensive due to the weak value of the pound the price increase is being passed on to the consumer. This is fine provided the consumer continues to buy the goods at the new high prices, however should they become discouraged this is when the UK economy could start to really suffer.

Political uncertainty and Brexit weigh down the pound

Political uncertainty historically weakens the currency in question and fifteen conservative MPs have recently given a vote of no confidence regarding Theresa May’s position. There needs to be a stable government in place when Brexit negotiations have only recently commenced. These will be the most important talks for the UK in the last fifty years. It also needs to be made clear the stance on Brexit. Will we see a hard or soft Brexit?

I think compromises will have to be made and the “have your cake and eat strategy” will have to be ditched. Compromises will have to be made on immigration if the UK is to have access to free trade and this kind of defeats one of the main reasons the majority of UK residents voted to leave. There could be public uproar which maybe why things are not moving forward as quickly as they should. This does not bode well for Sterling.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. 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.

Thank you for reading.

 

GBP/EUR Waits For UK GDP Figures (Ben Fletcher)

by

This morning the latest Gross Domestic Product Figures will be released for the UK at 9.30am. The quarterly figures are expected to show growth of 0.1% against last quarter, however compared to this time last year there is thought to have been a decline of 0.3%. The main significance of this data today is that since the Brexit referendum has taken place the UK economy has stayed buoyant and durable. Over the past few months UK data has started to be rocky and I think this trend will continue.

In my opinion the GBP/EUR rate has the potential to fall this morning to the low 1.11’s, if not potentially breaking into the 1.10’s which will be the first time since November 2016. The negative data earlier this year appeared out of nowhere and was unexpected which had an adverse effect on the currency markets, today there could be the same effect.

There is very little optimism around for Sterling at the moment, with the IMF downgrading the 2018 growth over the weekend being the latest negative news for the UK currency. The UK does appear to be engaging heavily in foreign trade talks however none of these can come into effect until the UK has left the EU in 2019. Therefore despite the good news that there will be significant trade deals the markets are struggling to find to much hope just yet.

If you have a upcoming requirement you would like to discuss or ask any questions about my forecast please send me an email Ben Fletcher at brf@currencies.co.uk. Please write me a brief description of what you’re looking to do, I would be more than happy to share my thoughts to try and help you develop a plan that will enable you to maximise your transfer. I will aim to provide you with a response quickly, if you have a urgent query I can be reached on the trading floor at 44 01494 725353.