Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

UK one year on since Brexit (Dayle Littlejohn)

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One year ago today the UK public voted to leave the European union and the pound has suffered ever since. The pound has dropped 20 cents against the euro, and a £200,000 transfer this time last year would have generated €40,640. For people purchasing a foreign currency this has caused more than a headache however for people purchasing the pound this has provided a fantastic window of opportunity.

UK economic data is light for the remainder of the week and the next key event to look out for is the inflation hearings Tuesday morning. UK inflation has been on the rise for the last 12 months due to the cheaper pound. I wouldn’t be surprised to see the hearings provide strength for the pound and a potential window of opportunity for clients purchasing a foreign currency short term.

Looking further ahead the forming of the Government is the next key political event that could have an impact on sterling exchange rates. I am optimistic that Theresa May will form a deal with DUP which will eliminate some of the volatility and the pound could recover some of the losses we have seen since the PM failed to win a majority.

When buying or selling the pound you also need to analyse the other currency you are converting before making your final decision. Feel free to email me the currency pair you are converting (GBPEUR, GBPUSD, GBPAUD, etc) the reason for your conversion (company invoice, buying a property) and I will provide you with further information drl@currencies.co.uk.

How to save money

The company I work for helps the client understand the factors that are influencing the currency pair they are trading, whilst having the ability to offer exchange rates that the client wouldn’t be able to receive with their own bank. We have been in business for over 17 years and on a daily basis save clients money on currency transfers. Feel free to drop me an email or alternatively you can call the trading floor Monday morning and ask to be put through to Dayle Littlejohn to discuss your options 0044 1494 787 478.

 

Theresa May Declares Brexit Negotiations Started Well (Ben Fletcher)

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Prime Minister May arrived in Brussels today to meet with European Union Leaders for the first time since she lost her majority at the General Election earlier this month. May still without a controlling majority is going ahead with negotiations as previously planned. The Prime Minister, arguably as a token of goodwill, is going to propose protection for both EU and UK expats across Europe as the first point on her agenda.

The GBP/EUR rate today has been particularly timid for the first time in a while, with very little movement across the course of the day. The rate closed near the day high of 1.136 and with Theresa May set to speak tonight there could be turbulence this evening. Sterling has taken a beating with so much speculation on what sort of deal the UK will go for and freedom of movement is key. If Theresa May’s comments are well received then we could see positive movements for Sterling.

Bank of England Committee Member Speech

Kirstin Forbes is an outgoing member of the BOE Monetary Policy Committee and will deliver a speech tomorrow evening. Forbes is known for being hawkish and is a believer in a interest rate hike in the UK. Earlier this week committee member Andy Haldane spoke about an interest rate hike coming this year and Sterling gained nearly a cent against the Euro.

Whilst there is considerable uncertainty, tomorrow may present a window for Euro buyers as the GBP/EUR rate could move above 1.14 of the back of Forbes comments. Euro sellers are still very much benefiting from the recent Sterling weakness but if you do need to buy Euros imminently tomorrow could be an opportunity to take advantage of.

Working for a brokerage I am able to actively monitor the markets for you if you do have a requirement. Setting a rate alert would allow me to notify of movements in your favour should you have a requirement in either the near or longer future. I am confident I can offer you a saving on your existing method of transfer, if you would like to ask any questions about our currency brokerage or the forecasts mentioned above please send me an email to brf@currencies.co.uk.

Busy middle of the week for the pound with the Queen’s speech! What next?

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The pound is still struggling under the weight of immense political uncertainty as we learn later today of the Queen’s speech where the new Government program will be laid out for all to see. But with Theresa May still struggling to secure the support of the DUP (Democratic Unionist Party) just how will the pound react? As if all of this wasn’t enough we also have the Brexit negotiations which have kicked off and so far the talks are ‘going well’ basically because the UK have agreeing to everything and not putting up much of a fight.

As if all of the political uncertainty wasn’t enough to give clients holding pounds the fear factor, Mark Carney yesterday ruled out any interest rate hikes, quashing expectations that saw the pound rise last Thursday.

Of course it isn’t all bad news, a ‘hard Brexit’ is looking less likely now which is mildly supportive for the pound since it reduces the chance of Britain crashing out of the EU with no deal. There is now a much greater push for access to the Single Market from business and also politicians like Philip Hammond. However with the UK economy starting to show signs of weakness from falling living standards the odds seems very much stacked against the pound in the coming months ahead.

With politics remaining the main driver the market will be reactive to the latest news and developments, well informed clients looking to sell the pound for a foreign currency, say for an overseas property purchase or to pay business Invoices, found their prices much better earlier in the week when the pound was almost 2 cents higher against the US dollar and 1.5 cents against the Euro.

Such small difference in the currency can make a massive difference on transfer amounts from £10,000 and over, every extra cent at current rates selling €200,000 is an extra £1500 in your pocket.

If you need to buy or sell the pound at present there are a whole host of important events pending which will influence the future levels. We offer a specialist service to help with the timing and planning of any exchanges that you will need to make, all the time I am asked about getting the ‘best rate’. Well I think it is achieved through lots of preparation and understanding of the market and your own position.

Given the high anticipation surrounding today’s speech we are expecting higher volatility than normal. You can contact me directly on 01494 787 478 and ask the reception team to be put through to Jonathan in order to have a plan of action in place and discuss a tailored strategy for you.

For more information at no cost or obligation on the best sterling exchange rates for larger international transfers, please feel free to contact myself Jonathan Watson by emailing jmw@currencies.co.uk. I am an Associate Director for one of the UK’s largest currency brokerages and have worked for nearly ten years assisting both private and corporate clients in the planning and execution of their currency purchases.

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

Buying Euro and Dollar rates in limbo as we still await election completion (Joshua Privett)

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Buying Euro and Dollar rate have been visibly choppy but haven’t gone anywhere over the past week and a half, with currency markets as frustrated as many in the UK electorate that no clear post-election direction has been laid out.

The Queen’s speech, the outlining of the new Government’s plans and priorities, and likely some snippets of how Brexit policy is going to be effected in the wake of the election result, will commence tomorrow.

However, we have yet to see a formal confirmation of any ‘deal’ reached between the Conservatives and the DUP, and last week the DUP’s Deputy Leader stated that there was ‘no deadline’ for such a deal.

What can we expect for Sterling moving forward?

It’s messy certainly, but whilst not a perfectly clear emergence from the election, we are seeing some clarity on the horizon. With Brexit talks having begun yesterday, the content of the Queen’s speech will be absolutely key in deciding what will happen to buying Euro and Dollar rates.

At the moment there is still an expectation of a positive improvement for Sterling. Whenever it was close to an expected announcement of co-operation with the DUP, GBP/EUR, GBP/USD and GBP/AUD rates were seeing marginal improvements. These were the dashed by delays from unexpected events that took the Governments attention, such as the Grenfell Tower fire and the terror attack at Finsbury Park.

However, surprises can come. Anyone with a Euro, US Dollar or Australian Dollar buying requirement wishing to take advantage of any boosts which occur on Wednesday may be wise to remember this. Whilst waiting to capture an opportunity you can also protect your downside by placing a ‘Stop Loss’ order. This will mean your currency is automatically bought at a rate you are comfortable with, should the market suddenly lurch against you.

All forecasts for Sterling exchange rates are largely dependant on the content of the Speech and how the Government addresses this during Prime Minister’s questions.

Anyone looking to buy Sterling using Euros, US Dollars or Australian Dollars now seem to be on a tighter time frame. The likelihood tomorrow is for Sterling strength so it may be worth securing an exchange rate before the close of play today. Even if you have a requirement later in the year, if you wish to take advantage of these highs to buy Sterling, you can pre-book your currency for a future transfer using today’s rates.

I strongly recommend that anyone with a Sterling based currency requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

You can also call me directly before tomorrow’s events on 01494 787 478 and simply ask the reception team to be put through to Joshua.

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

Sterling exchange rates so far this week, and how to take advantage of favourable exchange rates movements! (Joseph Wright)

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Clients and readers planning on making a currency exchange involving the Pound this week, have so far been presented with more or less the same exchange rates all day pretty much across the board of major currencies.

Sterling exchange rates appear to be relatively calm, as the Pound has made most it’s major movements in recent weeks as the general election outcome in the UK disappointed financial markets.

It could be that the Pound is to recover from its current levels, for example if a deal between the Conservatives and the DUP is struck resulting in additional political stability for example. Should this be the case there could be an opportunity for Sterling sellers to get a lot more Euros/Dollars for their Pounds than they would at the current exchange rates available.

The issue is though, the upward spike could only last a short while, and many of our clients may miss the opportunity.

The way around the potential disappointment would be to get in touch with us and arrange to have Limit Order set up, so that clients can automatically take advantage of an upward spike in their preferred direction.

An example of this type of order can be seen as follows. A €150,000 purchase at 1.14 would cost a client £131,578.95 whereas if they set up a Limit Order and manage to achieve a rate of 1.16 owing to favourable market movements, the cost would then be £129,310.34 which is a saving of almost £2300 based off of just a 2-cent movement.

Most of our readers who get in touch with us aren’t aware of this trade option, and discover that it can take some of the stress of trading away from their currency transfers, and our brokerage offers this type of trade on transfers over £5000+ or it’s equivalent in another currency.

Feel free to get in touch with me if you would like to discuss the mechanics behind this way of making an international transfer. There is no additional cost and the orders can be amended or even cancelled by clients once placed.

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.

Monetary Policy Committee vote causes Sterling strength (Daniel Johnson)

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Is their an interest rate hike on the cards?

Today we saw the UK interest rate decision, rates were kept on hold, but it was a shock to the markets that three members of the Monetary Policy Committee (MPC) voted in favor of a rate hike. The MPC meet once a month in order to vote on whether to make any changes to the interest rate. If the vote comes in away from expectations it can cause volatility on the exchange as witnessed today. There are currently eight members of the MPC and a majority vote in needed for there to be a change in rates.

Today the vote came in at 5-3 in favor of keeping rates on hold, the expectation was for 1 vote in favor of a hike. Inflation is now at 2.9% and we have seen a rapid rise which is a direct result of the vote to leave the EU. Some may deem inflation to be a positive, but this surge is not necessarily welcome. The weak value of the pound is causing exports to become far more expensive. Retailers then push the price increase on to the consumer, this is fine provided the general public continue to purchase goods, however if the average wage does not grow at the same rate as inflation and people stop spending there could be a recession on the cards.

Political Uncertainty still weighing down the Pound

Political uncertainty historically weakens the currency in question and this is definitely the case in the UK at present. Until a coalition is finalised there is little chance of any significant sterling strength. The Queens speech has been delayed until 21st June due to the Grenfell Tower tragedy. This is when she will officially announce we have a government in place. I would expect news of the finalised coalition to surface in the press before hand however and we can expect a spike in sterling value.

Please feel free to get in touch if you have a currency requirement. I will be happy to assist. It is crucial to have a broker with experience if you wish to maximise your return. There is no obligation to trade if you would like my help. I can be contacted at dcj@currencies.co.uk . Thank you for reading.

Daniel Johnson

UK Election fallout: Where next for the pound and sterling exchange rates?

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The UK election has confirmed the almost unthinkable a few weeks ago. Not only did Theresa May fail to increase her majority, she has found herself short of one and sterling has reacted accordingly. The overall position is now looking increasingly uncertain with most commentators expecting that sooner or later Theresa May will be forced to resign. With no clear majority government being yet confirmed by Theresa May, her,  and with it, the UK and sterling’s position is looking more and more dire.

This is great news for clients looking to buy the pound but presenting fresh headaches for clients buying a foreign currency with the pound who did believe the rates were not going to drop much further. With the prospect still of a Jeremy Corbyn Government and even another election markets are now in wait and watch mode to find out what happens next with the UK politically and also the pound.

I cannot see how the pound won’t drop further since this uncertainty is weighing heavily on the market. Business confidence has plummeted and so has consumer confidence and spending. With wages failing to keep pace with Inflation the outlook remains extremely uncertain and the deterioration in the UK is I believe highly likely to continue.

If you have a transfer buying or selling the pound this week is crucial to establish whether or not the recent trend was short-lived or whether it will now bounce higher. If you have a transfer to consider then understanding the market and all of your options well in advance is the best way to limit your exposure.

A well placed Limit order could be the perfect antidote to the current malaise in sterling. Such orders allow you to trade at an improved level should it become available. So for example if you wish to buy Euros at 1.15 we could put a Limit order in at this level. If you want to sell US dollars at 1.25 we could put an order in at this level.

As well as provide expert guidance on the market and potential outcomes we can also offer a proactive service to monitor the market and contain the volatility. For more information on the market and our services please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

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

 

UK Election Update – Potential Outcomes and Impact (Daniel Johnson)

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Are we looking at a Conservative victory?

At present it looks like we could be headed for a majority victory for the conservatives. The latest polls suggest the Conservatives are at 44%, with Labor at 36%. If there is a majority conservative victory the general consensus is Sterling should rally . When the snap election was announced and a torie victory was factored into the exchange we hit 1.19 on GBP/EUR. I would not expect us to hit that level again due to inflation concerns, but we could well see a buying opportunity for pound sellers.

The pound could make large gains against the US dollar if this scenario pans out as it is one of the few currencies which has not strengthened against the pound during the build up to the election. Historically, the currency in question weakens if there is political uncertainty. Which could give an indication that had the election not been taking place GBP/USD would have breached the 1.30 resistance point.

Keep in mind however, the polls have got it wrong before look at  Brexit and the US election as examples.

A hung parliament should cause further weakening of the pound. Once a government is put in place we should see the pound rebound. By how much depends on the coalition. A coalition I feel would not be a good outcome as if parties are combined with differing views Brexit negotiations will become more problematic. Keep in mind some believe negotiations could take up to ten years, we need negotiation to go forward in the most simple fashion.

A shrewd way to trade maybe to put a limit order in overnight. A limit order means you set a target rate of exchange and should that level become available 24hrs a day it will be purchased automatically. During the evening there is likely to be big swings in the market as votes come in. For example if a Labor constituency falls into conservative hands you could see a considerable spike in GBP value. A limit order will enable you to take advantage of this situation.

If  you have a currency requirement it is crucial to be in touch with an experienced broker. The timing of your trade is vital during such volatile  times, If you have an experienced broker on board he/she can keep you up to date with what is happening in the market to help you make an informed decision. Should you find our information useful and you would like me to assist with your trade I will be happy to help you personally. If you inform me of the the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the country and as such I am in a position to better virtually every competitors rate of exchange. You would also be looking at saving anything up to 4% in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog.

This weeks General Election could be the catalyst for GBP exchange rates to hit their highest, or lowest levels this year (Joseph Wright)

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The snap election called by the current Prime Minister, Theresa May is now just 2-days away and the race for number 10 now appears to be at it’s closest since the election was called.

The uncertainty surrounding who will win the election has inevitably resulted in a selling off of the Pound, as currencies tend to come under pressure during times of political uncertainty.

The election was originally called by May in order to pave the way of a smoother and more straight forward Brexit process, as political infighting within Westminster had begun to derail the current UK governments plans to carry out the Brexit negotiation process. Now that there is no clear front-runner to win the election the Pound is under pressure, as a Hung Parliament doesn’t bode well for paving a clear Brexit path.

In regards to GBP exchange rates I think this weeks election could be the start of new trading territory for the Pound in some cases. I wouldn’t rule out a move below the current support level of 1.1350 for the GBP to EUR rate this year should we see a Labour win or a Hung Parliament, but then a Conservative majority would result in a move back into the late teens and maybe even above 1.20 should UK economic data releases continue to impress.

I’ll be happy to discuss the current trends between the Pound any other major currency pairs also should any of our readers wish to?

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.

 

UK General Election only 2 days away (Dayle Littlejohn)

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With only two more sleeps until Brits visit their local polling station to decide who will run the country for the next five years, the main story that is making headline news is how both parties plan to counteract terrorism, which is no surprise after the recent tragedies within the UK.

Labour are arguing that police cuts have had a direct impact on the safety of British people as there are less police officers on the streets, this has also been supported by the Mayor of London.  However Theresa May and former Mayor of London Boris Johnson have insisted that the police are well resourced. This argument will be swaying voters and could have an impact on the final vote count.

In regards to currency when Theresa May called a snap election the pound rose in value and over the last couple of weeks the Labour party have been gaining momentum and therefore the pound has been losing value. Consequently if Theresa May wins the Election I expect sterling exchange rates to improve in value. Any other result could cause the pound to devalue making foreign currency more expensive to buy. On the day of the last election GBPEUR exchange rates fluctuated 4 cents and US dollar exchange rates fluctuated 6 cents. This shows how much of an impact an election can have on exchange rates.

Once the election is over all eyes will turn to Brexit negotiations which are set to begin on the 19th June. With Brussels stating the UK may have to pay a €100bn divorce settle bill, this could be further pressure on the pound in the months to come. However if David Davis gets his way and manages to get away with not paying a fee for the UK’s departure I would expect to see the pound increase in value.

How can I help you?

The currency company I work for enables me to achieve clients rates of exchange that they won’t be able to achieve by using their own bank.

Property purchases and sales are my area of expertise, therefore if you need to purchase a foreign currency or you are about to complete on a sale abroad, today is the day to get in touch to discuss your options and to get an understanding of how we can save you as much money as possible.

When purchasing currency it’s crucial to analyse both the currencies you will be trading, as your 2nd currency will also have an impact on the exchange rate. For example after the election, GBPUSD could fall as I believe the FED will raise interest rates. Where as I expect GBPAUD to rise as Iron ore prices are expected to continue to fall. Therefore two different strategies for clients holding onto pounds buying US dollars and Australian dollars.

Feel free to email me the currency pair you are converting (GBPUSD, GBPAUD, GBPCHF etc) the reason for your conversion (company invoice, buying a property) and I will email you with my forecast for the currency pair and the process of using our company drl@currencies.co.uk.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **