Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

The Fragility of the Pound has been Exposed (Daniel Johnson)

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BOE Rate hike could be delayed

The Pound has suffered over the last two days of trading. We saw strong gains earlier in the week, hitting highs against several major currencies. GBP/EUR hit 1.1599 for example. This was based on a host of strong UK data such as a 43yr low on unemployment, strong retail sales data and an increase in average wage growth.

There was also a Brexit transitional deal all but agreed, with the UK being granted signal market access for two years before full exit from the European Union.

The fragility of the pound was displayed however, following poor inflation data and terrible retail sales figures. Some could deem inflation dropping below average wage growth as good news with people making more money and goods and services not rising in price. There is concerns however if goods are not rising in price and people are not spending despite having more funds available it does not bode well for the economy.

Retails sales was predicted to come in at – 0.5%, it landed at a shocking – 1.2% down from 0.8% the previous month. There was little Sterling weakness following the release which surprised me considering this would have the potential to stave off a rate hike from the Bank of England (BOE). It took Mark Carney, Head of the BOE to say that a rate hike may occur later in the year for the markets to bite, which caused Sterling to weaken considerably.

It just goes to show how fragile the pound is and should there be a rise to the record highs seen previously it could prove wise to move rather than hope for further gains.

Sterling Sellers – when to move

GBP/EUR – move 1.1450 +

GBP/USD – move 1.43 +

GBP/AUD 1.84 +

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take  a couple of minutes and could be well worth your while.

You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company  trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

Pound hits a post-Brexit high as positive data strengthens the Pound, will Sterling hold onto its recent gains?

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One of the headline currency pairs, GBPUSD (also known as cable) hit its highest level since the Brexit vote yesterday. The US Dollar is often used as a benchmark as its the most traded currency and many commodities/products are priced in Dollars so yesterday’s news is certainly noteworthy.

The main reason for yesterday’s upward movement is due to wage growth in the UK overtaking the rate of inflation for the first time in over a year. It was back in January 2017 that we were last in this position, and now an interest rate hike from the Bank of England is looking almost certain which is boosting sentiment surrounding the Pound.

Many of our regular readers will be aware that the Brexit deal being agreed by UK and EU negotiators last month has also boosted the Pounds value, as fears of a Hard Brexit have now subsided.

The Pound to Euro rate has also improved recently, as has the Pound vs many other major currency pairs. If you have a currency requirement involving the Pound it’s worth considering this, as Sterling’s strength is spread across the board with many expecting to see the currency strengthen throughout the year.

The next piece of important data due out of the UK is Retail Sales figures, which will be released tomorrow at 09.30am for both month-on-month as well as year-on-year. With the poor weather affecting the high street there may be a slowdown, so those hoping for a stronger Pound should be weary of this release along with those of a similar nature.

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.

Will Sterling’s Rally continue? (Daniel Johnson)

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Are we witnessing new Buoyancy levels between 1.15-1.20 on GBP/EUR?

The Pound has seen consistent gains against the majority of major currencies. There has been several catalysts for it’s rise. We have seen very impressive retail sales figures coming in over twice as high as expected at 0.8%. Unemployment currently sits at an 43yr low and average wage growth is very close to parity with inflation which is a true sign of a healthy economy.

Throw into the mix that a transitional deal has all been but agreed fro Brexit and we have firm justification for the Pound’s rise. The UK financial sector is looking far more comfortable with access to the single market granted until full exit from the EU.

If we look at GBP/EUR it has been stuck below the 1.15 resistance point for some considerable time. The above news helped GBP/EUR breach 1.15 fro a small window of opportunity and quickly retracted as it has done several times in the last 11 months. It took news from the European Central Bank (ECB) that a cut in Quantitative Easing (QE) could be held back for GBP/EUR to move above 1.15 and indeed stay above 1.15 for several days. QE is pumping money into an economy in order to stimulate growth, current increments are set at €30bn a month is this was to be cut the Euro would see substantial strength. Inflation has proved to be a concern and the ECB well no hold fire.

I think considering we have now seen GBP/EUR above 1.15 for several days we could be witnessing new buoyancy levels between 1.15-1.20. I would however consider a Stop/Loss order as protection in case the market falls if I was a Euro buyer.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. 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.

 

Pound predicted to rise throughout 2018, but what factors could limit its gains?

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Sterling has performed well once again during today’s trading session, with the cost of buying Euros and US Dollars becoming cheaper. Importantly the Pound to Euro exchange rate breached the 1.15 mark once again today, meaning that the GBP/EUR pair are trading around a 10-month high as they haven’t traded this high since June of last year.

Even though there has been some disappointing data out of the UK over the past week and a half, Sterling has managed to hold on to its recent gains which I think is a positive sign for the Pound moving forward as market sentiment has improved.

Although next months interest rate hike from the Bank of England is looking almost certain, there is of course the chance of it not happening and in this case I would expect to see the Pound fall. The chances of it not happening are slim, but those exchanging Pounds into another currency should be weary as it appears that the rate hike has been priced in already.

The next important bridge to cross regarding the Brexit will be the issue surrounding the Northern Irish border. This matter is yet to be resolved and I think it could cause movement for GBP exchange rates between now and the end of the year, with the Pound likely to climb should there be a positive breakthrough that suits all parties.

There is a quiet week ahead for the Pound so I expect the rates to continue to be driven by market sentiments, and do feel free to get in touch if you wish to be kept updated regarding the 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.

Will the Pound improve next month against the Euro? (Tom Holian)

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The Pound has been performing very well during March following on from some very positive economic data combined with further progress with the Brexit issue.

We have seen Average Earnings increase which have now outpaced inflation for the first time in a very long time and this could give support to the Bank of England for an interest rate hike to come.

The central bank showed a 7-2 decision in favour of keeping interest rates on hold and I would not be surprised to see an interest rate hike coming in May and this is why we have seen the Pound hit these recent levels.

In fact Sterling is now trading very close to the best level to buy Euros since May 2017 creating some excellent opportunities to send money to Europe.

The Bank of England has also confirmed in a letter to a number of banks trading in the UK that they will be given an extension to organise themselves during the transitional period which has provided financial services with more certainty and this has helped to support Sterling.

Turning the focus towards Europe I think we could see a problem ahead for the single currency as Italy are still yet to sort out their coalition between the Lega Party and the Five Star Movement. The instability caused by a hung parliament as we have seen over recent years will often weaken the currency and in this case it could be the Euro.

Later today Germany will announce their latest inflation figures with the expectation of 1.6% so anything less could see GBPEUR exchange rates move in an upwards direction. As Germany is the leading economy in the Eurozone if we see a fall in inflation this could cause a rethink for the ECB when it comes to their current QE programme.

As we move into April I think we could see GBPEUR rates test recent highs and if we get further progression on the Brexit issue this could see Sterling break past 1.15 vs the Euro.

If you would like further information or a free quote when buying or selling Euros then feel free to contact me directly I have worked for one of the UK’s leading currency brokers since 2003 and I am confident of being able to offer you competitive exchange rates as well as helping you with the timing of your currency transfer.

Email me directly and I look forward to hearing from you. Tom Holian teh@currencies.co.uk

 

 

 

Could the EU summit cause the Pound to rise further against the Euro? (Tom Holian)

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The Pound has made some significant gains vs the Euro and the US Dollar after the Office for National Statistics confirmed that average earnings have increased compared to the expectation.

Unemployment in the UK also fell to close to the lowest level since records began and this could provide the Bank of England with support for an interest rate hike in the near future.

The reason is that as wage growth has now outpaced inflation for the first time in a long time it gives support to a rate hike.

The Bank of England will be holding their latest meeting tomorrow and although I do not think we’ll see any change in interest rates if the tone is that an interest rate hike may be coming this could see the Pound make further improvements tomorrow afternoon when the minutes are released.

As we go into tomorrow this could see a lot of volatility coming for exchange rates as the latest EU summit begins.

Earlier this week the Brexit tone was a little more positive than what we have seen recently and this also led to the Pound making gains particularly against the Euro which is good news if you’re looking to send money to Europe at the moment.

The US Federal Reserve will be meeting in a few hours and the likelihood is that we’ll see an interest rate hike which will take US interest rates higher than that available in Australia for the first time in years so if you’re making a transfer involving Australian Dollars this could weaken the currency down under once the announcement has been made.

The statement due to be made by Fed Chairman Jerome Powell will be closely analysed for any signs of how many more interest rate hikes we could see this year and I expect to see Dollar strength overnight against the Euro which could see GBPEUR rates break past 1.15.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank or another currency broker then contact me directly for a free quote. Alternatively call me directly on 01494787478 and ask for Tom Holian when calling.

Tom Holian teh@currencies.co.uk

When shall I move? (Daniel Johnson)

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Sterling Seller Strategy – GBP/EUR,GBP/USD and GBP/AUD

GBP/EUR – Sterling is suffering due to the uncertainty surrounding Brexit. One of the key points of negotiation is whether or not the UK financial sector will have access to the single market following Brexit. This is proving to be particularly difficult. Theresa May’s proposal was for the UK to continue to have access to the single market and to abide by the highest standards of international laws. This was declined by Brussels.

The French wish to attract UK financial services to Paris in order to benefit from tax revenue. Financial services is the biggest form of tax revenue in the UK. French politician, Bruno Le Maire has stated the UK will have to utilise a legal mechanism know as equivalence. Equivalence allows countries outside the EU to have limited access to the single market, this is dictated by Brussels and can be revoked at any time. Hardly a stable situation for UK based financial services.

Until there is more clarity on this situation I feel GBP/EUR will stay below the 1.15 resistance point. 1.15 has only been available for very small windows of opportunity if you are a Sterling seller. If you have to move short to medium term I would suggest performing your trade should interbank hit 1.14 .

GBP/USD – The Federal Reserve interest rate forecast is crucial to the value of the Dollar. Federal Reserve representatives have indicated there could be as many as three rate hikes this year, which bodes well for the green back. Personally, I would be surprised to see as many as two rate hikes from the FED if you consider recent history despite the recent change in Fed chair from Janet Yellen to Jerome Powell. It is being swept under the carpet that a rapid rise in interest rates has the potential to cause serious problems in the US economy.

The most drastic effect of a steep rise in rates would be the increase in pressure on US tax payers to repay current debt. Keep a close eye on this situation if you have a trade involving USD.

If you are selling Sterling short to medium term I would consider anything above 1.40 to be a decent trading level.

GBP/AUD – The Interest rate outlook from the Reserve Bank of Australia (RBA) is quite a negative one and it looks as though there is unlikely to be any change in interest rates this year. Despite that there is still resistance on GBP/AUD at 1.80 and considering the uncertainty surrounding the Brexit situation if you are buying the Aussie with Sterling set your target rate as 1.78-1.79 to move.

This blog is geared toward Sterling sellers, Sterling buyers feel free to drop me an email and I will provide a trading strategy.

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 help. 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

What can we expect this week for the pound?

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Sterling has risen against most currencies which is pushing closer to 1.13 on GBPEUR and 1.40 on GBPUSD. This is partly in response to potential progress being made on the Brexit, hopefully we will start to learn more about the actual final arrangements on Brexit this month. Next week is the EU Summit where we will be looking for news on the final transitional arrangements.

If you have a transfer to sterling or need to buy foreign currency with the pound then the next week is crucial to be making some plans. Sterling has been rather flat since there is not been a huge amount of new news to move the market. Against the Euro we have had 2.5 cents movements in the last month, GBPUSD has moved 4 cents and GBPAUD has been 3.25 cents.

Such movement is reflective of a fairly flat market but one that is likely to become very volatile in the coming weeks. Brexit is of course the main driver on the pound and until we get some real news and clarification of the final deal, sterling could remain range bound. The Spring Statement is at 12.30 which will give us some final news on what we might expect in the future from the UK economy in the future. It is not expected to be a market mover but this will certainly be something to be tracking for the future.

If you have a currency exchange to make then keeping up to date with the latest news is vital to understanding the future direction on the currency markets. We can track the market for you and assist with a commercial rate to help you trade at the best rates.

For more information at no cost or obligation please speak to me Jonathan Watson by emailing jmw@currencies.co.uk. Thank you for reading and I look forward to hearing from you and discussing some strategy to help you maximise your sterling exchanges.

Could the Pound make gains vs the Euro and US Dollar at the EU Summit? (Tom Holian)

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The Pound vs both the Euro and the US Dollar has struggled since the beginning of the month hitting the lowest rate to buy Euros in three months and hitting a 3 week low vs the US Dollar.

The Pound has also remained in a very tight range against a number of major currencies for a long time and even though economic data has been both positive and negative during this period it appears as though the market is waiting for updates on what is happening with the Brexit talks before making its move.

We are now almost a year on from when Prime Minister Theresa May initially triggered Article 50 and the Pound has not really done anything since.

With the EU summit round the corner taking place on March 22-23 this could be the real catalyst for changes to Sterling exchange rates. At the end of last year the Pound made some positive movements after citizens rights were agreed but the gains were relatively short lived.

In the talks coming up the key points will be the crucial transitional period which takes places between March 2019 and December 2020 and as yet little has been decided. The UK still does not have anything formally agreed but if the talks go well could this be what is needed for the Pound to improve?

Only time will tell but what you have to remember is that the talks will need to work for both sides so I’m confident that we’ll be able to show some signs of progress which could help the Pound towards the end of this month.

In the short term Chancellor Hammond will be releasing the Spring Statement on Tuesday which could cause some movement for the Pound.

If you would like to be kept updated with what is happening to Sterling exchange rates or indeed any other currency pair and would like a free quote then contact me directly and I look forward to hearing from you.

I have worked for one of the UK’s leading currency brokers since 2003 and I am confident of being able to offer you bank beating exchange rates.

Email me directly Tom Holian teh@currencies.co.uk

What next for sterling exchange rates?

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For clients with a transaction to buy or sell the pound the EU Summit and Bank of England interest rate decision on the 22nd March will be very interesting. If you are looking for some movement higher or lower to take advantage of this could be the time. Around the last meeting in December the pound was moving around 2-3% against most currencies.

If you need to consider a transaction buying or selling the pound there are still a number of events which could move the market soon, I think in this kind of market where no immediate clear direction is being established, taking advantage of the Limit or Stop / Loss order is key. For more information at no obligation on these options please contact myself Jonathan Watson by emailing jmw@currencies.co.uk

The pound is struggling to break free of the more recent ranges it has occupied which is in part explained by the mixed progress on Brexit. Regular readers will know how important Brexit is to the strength of the pound, markets are looking to understand what Brexit will mean before they can make any bold investment decisions.

Whilst the currency markets do move every second on a daily basis, the investment decisions can be very long term. The big players that move the currency markets which are the banks, pension funds, hedge funds and big institutional investors will often be making long term decisions. Right now it is still very difficult to make any significant long term plans involving the UK and sterling.

Business and investors like certainty to make their decisions, this is something the Brexit vote has removed for the time being. This month we have learned of further progress on Brexit as it becomes clearer to outline Theresa May’s position and plans. Essentially the UK is looking to emulate many of the existing arrangements that allow harmony and free trade at present. This is being seen by the EU as a ‘have your cake and eat it’ approach which the EU have previously ruled out. what we can take is that by agreeing in December the withdrawal arrangements which included the Brexit bill and details on citizen rights and North Ireland, Brexit is taking some shape.

The worst fears of a no deal hard Brexit are being gently removed, but the ideal solution for the market of a very soft deal (very similar to what we have now) which would see minimum disruption to trade is still a long way off, and perhaps still ultimately untenable.