Tag Archives: GBPEUR Forecast

Why is the Pound losing value at the moment, and will it continue? (Joseph Wright)

Brexit jitters are continuing to weigh on the Pounds value, with the currency losing a substantial amount of value over the past week across the board of major currency pairs.

Currency markets were already weary of the Pounds future price movements as we await the outcome of the Supreme Courts impending decision on whether or no the UK Government requires parliamentary approval before beginning the Brexit.

These fears were exacerbated over the past weekend as a much talked about interview offered the marketplace an insight into the UK PM’s plans for the Brexit. UK Prime Minister, Theresa May alluded to prioritising the control of immigration, as opposed to focusing on retaining the UK’s access to the single market.

Moreover, May commented that the UK cannot keep ‘bits’ of EU membership and this comment has fueled the fire of bearishness towards the Pound at the moment.

It’s for these reasons that we’ve seen the Pound soften over the week, and the sell-off accelerated this afternoon after May announced that she will be giving another major speech on her Brexit plans on Tuesday of next week.

I personally think that the Supreme Court decision will have been announced by then, so there’s a possibility we could see a lot of volatility between GBP exchange rates between now and then.

Until then, I think that anyone with a currency exchange requirement involving the Pound should pay close attention to the Supreme Court decision. The likelihood is that if the Government is successful in their appeal we can expect to see the Pound fall further, as the Government plans on invoking Article 50 at the end of March and there polices generally lean towards a ‘Hard Brexit’.

On the other hand if they’re unsuccessful the general consensus is that the Pound could get a lift. Feel free to get in touch if you wish to be kept up to date with the outcome of the Supreme Court’s decision, as of yet we have no definitive time as to when this announcement will be made.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

You can also speak to me directly on the phone by calling 01494 787 478 and asking reception to speak with Joe.

Will sterling rise or fall on the Supreme Court decision?

The pound is fairly stable and range bound at present as markets keenly await the next direction of the Brexit. We are all eagerly awaiting the next bits of news over the Supreme Court decision and it is this which will determine the more immediate direction on the currency pairing. If you have a transfer to consider involving sterling understanding what is happening and being ready to react is the best way to capitalise on this news. At the moment we do not know when the decision will be released and this is keeping the market nervously on its toes.

Essentially upholding the previous High Court decision should see the pound rally but I think the gains will be limited. My personal expectation is for this to lead to sterling gaining up to 2% against its counterparts. If the decision goes for the government sterling will fall because I believe markets have very much priced in ‘good news’ that the previous decision would be upheld. If it falls in this scenario sterling could lose up to 4% as it becomes apparent a hard Brexit is more likely again. Sterling might retest the kind of levels we saw back in October last year.

GBPEUR Focus

After the Supreme Court decision attention will still remain on the Brexit and any good news for sterling will be shortlived in my opinion. There will still be many unanswered questions and as the resignation of Sir Ivan rogers, the UK’s Ambassador to the EU shows there is scope for further political casualties. Attention towards the end of the quarter will focus on the likelihood of Theresa May triggering Article 50 plus the Dutch and French elections. I expect GBPEUR could trade between 1.12 – 1.23 depending on the various outcomes here. If you wish to trade at these levels and wish to be kept informed of developments please email me on jmw@currencies.co.uk

GBPUSD Focus

The big news on the US dollar is the likelihood of further interest rate rises. A strong jobs report has given rise to expectation we could see further interest rate hikes soon and GBPUSD has dipped. I expect GBPUSD to trade between 1.14 and 1.25 in the coming weeks. As you can see I feel the US dollar will be strengthening.

If you have a currency transfer involving sterling and wish to optimise your position with some expert insight and information please contact me Jonathan on jmw@currencies.co.uk. I work as a currency specialist and have appeared on BBC News discussing Brexit and the impact on the currency markets. I would be very happy to hear from you and answer any questions and help you with your situation.

Thank you for reading, I hope to hear from you soon.

Exchange rates for buying Euros and Dollars showing mixed results to begin the New Year (Joshua Privett)

The Pound has begun the year without much clear direction following what had been quite a difficult festive period for buying Euro and Dollar exchange rates.

GBP/EUR and GBP/USD have shown some gains whilst anyone with an Australian Dollar interest has suffered the most so far in 2017, with a loss of 3 cents on GBP/AUD recorded within the past 48 hours.

Frankly, this is a return to some normality on currency markets. With the Brexit dominating headlines for the final 6 months of last year, markets were remaining flat until any little piece or morsel of news came our regarding the mechanics of the Leave process, and many other events were largely ignored.

Some are now arguing that markets have adjusted to this new ‘reality’ of a long and pro-longed Brexit negotiation and are beginning to return to some semblance of normality. Rates to buy Euros, US Dollars and Australian Dollars now seem to be paying attention to daily releases in economic performance data which had largely been ignored for the last 6 months when determining the value of each major currency.

For example Sterling enjoyed strength to begin the year when performance figures for our manufacturing sector were through the roof (as a cheaper Pound encourages buyers to come to the UK’s shores), and the Euro benefited from similarly positive inflation figures released at 10:00 this morning. This explains the roller-coaster on GBP/EUR over the past few days as both have gained value against the other.

A medium-term look at Sterling exchange rates still sees potential opportunity between the 12-17 January when it is expected the Supreme Court decision on Parliament’s role in leaving the EU will be decided.

The heavy expectation is for the Supreme Court to uphold the Judicial Court’s decision in November to allow Parliament the vote on triggering Article 50, which contributed to the strong Sterling boost that month – and is why most major financial institutions expect a mirroring of this Sterling strength in January.

In the short-term, we can look to economic data for clues on forecasts for Sterling Euro, Sterling US Dollar and Sterling Australian Dollar exchange rates.

The key piece of data this week will be Friday’s unemployment figures in the US, which will send ripples throughout the financial markets, and if last month’s was anything to go by, will likely present further opportunities for Euro and Australian Dollar buyers alike.

With a positive short-term view for anyone buying a foreign currency, and the anticipation of medium term gains, anyone looking to sell Euros, US Dollars or Australian Dollars will be wise to look at their options to protect an upcoming transfer into Sterling from becoming more expensive.

Anyone with a foreign currency purchase later on in the year would be best placed to monitor the markets over the next few weeks, and if you do not wish to leave yourself exposed in the run up to the triggering of Article 50, can secure an exchange rate there and then if any tempting opportunities emerge, whether for an immediate transfer or one planned for the future – it is a simple process to pre-book your currency using the exchange rates available that day.

I strongly recommend that if you have a planned transfer either to buy or sell Euros or Dollars before April this year, you should contact me overnight whilst markets are quiet on jjp@currencies.co.uk. I will respond as soon as I am able to discuss a strategy for your transfer to ensure tempting levels are seized quickly, and that your upcoming transfer is protected from any prospective dips in the marketplace.

Furthermore, I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation should save you thousands on an upcoming transfer. I am happy to provide a quote for your transfer to demonstrate this.

I have had quite a few new clients recently who said their previous broker suggested they had to move immediately with the formal Brexit proceedings looming, but in this market, as has been proven in recent months, there are still heavy opportunities for foreign currency buyers even in the next few weeks.

 

 

When shall I Trade? (Daniel Johnson)

GBP/EUR

I feel long term we will see Sterling rally against the Euro, I feel it is chronically undervalued at present. The only reason the pound is below 1.20 is due to the electorate’s decision to leave the EU. The key factor in the pound’s value is trade negotiations, which currently leaves the nations economy in uncertainty. The High Court Judgement as to whether the government will vote on the triggering of Article 50 is due to complete in early January and this will determine whether there is a hard or soft Brexit. A hard Brexit would weaken the pound substantially. If you have to buy Euros short term and wish to eliminate any risk from your trade it may be wise take advantage of current levels.

Medium to long term as trade negotiations become more apparent Sterling should gain strength. The Euro also has some serious underlying problems which could rear their head. Political uncertainty  caused by the emergence of right wing groups could cause weakness. Also we have Italian Banks bad loans in excess of €360bn, A debt crisis in Greece and shockingly low inflation. Any of these factors could severely weaken the Euro.

GBP/USD

Following the FED’s decision to hike rates and forward planning indicating there could be as many as three more. I think the US dollar has further ground to gain on Sterling. The Dow is finishing at record highs and economic data is very strong. If I had to buy Dollars I would be moving quickly.

If  you have a currency requirement it is wise 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 we can keeo you up to date with what is happening in the market to help you make an informed decision. If you would 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.

 

Rollercoaster day for Sterling points to heavy ceiling for buying Euro and Dollar exchange rates (Joshua Privett)

Today buying Euro rates breached fresh 5 month highs in addition to more attractive levels for Australian Dollar buyers following the historic interest rate decision last night across the Atlantic in the US.

This was only their second rise in interest rates in over a decade. In the world’s largest economy, there was certainly going to be financial ripples as a result.

The obvious and direct result was that for anyone holding Sterling the Dollar become more expensive following the rate hike announcement.

But why did the Euro and Austrlian Dollar take a bit of a dive?

The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transactions concentrated between the two, when one of the two currencies suddenly gets a large boost in demand, as we saw today, the other loses value through decreased demand. This is why GBP/EUR briefly breached 1.20 earlier today as a secondary effect of the hike.

The gains against the Australian Dollar similarly were due to a lower demand for AUD which sucked away some of its recent, and frankly over-inflated, value. The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% for example. However, it is traditionally seen as an unstable currency, so when you have a safe-haven currency which raises its base rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD.

However, markets moved back sharply in the afternoon following this move, with GBP/EUR almost losing a full cent as an example.

It seems markets are worried the recent improvements on Sterling will not carry through the volatile end of year trading period. At the end of the year traders and companies wind down their positions in order to consolidate their profits in a stable currency to avoid coming back to their desks in January and finding outside forces have eaten away some of its value.

Of course the Pound is seen as anything but stable at the moment. So the Pound seems set to lose out to major safe havens such as the Dollar, Swiss Franc, and potentially the Euro, however, more exotic currencies should still see it hold its own.

As such anyone with a buying Euro and US Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.

Sterling buyers, of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.

I am well positioned to help anyone with a Sterling based currency requirement manage their exposure to the markets in the run-up to the new year and beyond in order to maximise your currency return in this volatile marketplace. 

Contact me overnight on jjp@currencies.co.uk to discuss the particulars of your transfer. I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on an upcoming transfer.

You can also contact me on 01494 787 478, and simply as the reception team for Joshua (me) and they will put you through to my line.

 

US Interest Rates up by 0.25% (Daniel Johnson)

Last night saw the US interest rate decision. Janet Yellen the Head of the Federal Reserve indicated at the end of last year there would be as many as four rate hikes during 2016. None of which materialised, she has been branded with a very  cautious reputation. Although the FED is meant to act as a separate entity, I can’t help but think the FED’s caution was due to the uncertainty surrounding the presidential election.

Trump has been very vocal about his wish to raise rates and has gone as far as to threaten Yellen’s position. Rates went up by 0.25% as anticipated so there was little movement on the GBP/EUR. Yellen stated after the hike that there would be up to three hikes this year, this can be taken with a pinch of salt as with most forward guidance.

Many investors left the Euro for US dollar due to safety and of course an increase in return. The dollar rallied against the Euro, but as mentioned earlier there was no great shakes on GBP/EUR.

With all the uncertainty surrounding Brexit trade negotiations and 1.20 seeming to be a resistance barrier if I was buying Euros I would be tempted to take advantage of current levels.

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. If  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.

 

 

Buying Euro rates soar whilst GBP/USD and GBP/AUD remain relatively stagnant (Joshua Privett)

Buying Euro rates of exchange have enjoyed a further boost following the long (to say the least) awaited announcement of further emergency stimulus in the Eurozone to keep growth on track. However, GBP/USD and GBP/AUD have remained relatively stagnant following the Pound’s losses earlier this week.

The Pound has come under renewed pressure this week as the Supreme Court decision over Parliament’s involvement in the Brexit negotiation was debated and fleshed out in what was, on occasion, quite gripping television.

Previously the Judicial Court had ruled in the favour of Parliament being involved in the invoking of Article 50 as a voting process. The frenzy of investors flowing into Sterling, which raised its value through increased demand. was attributed to the high expectation that Parliament’s involvement would yield a longer time-frame for the UK to enact a Brexit, alongside the likelihood that MP’s would push to retain close economic ties with the EU.

This has now been called into question on two fronts. Firstly, MP’s have cut a deal with Theresa May to push through a mandate that Parliament will support the Government’s deadline to enact Article 50 by the previously agreed date of March 2017. In return, May will be more forthright about her plans for her upcoming negotiations with the EU which were announced on Wednesday.

Secondly, the appeal with the Supreme Court is not simply a re-hashing of the previous court case. The Government is using more complicated lines of argument, including precedent from Parliament’s actions, to suggest that the Government can act unilaterally without heavy Parliamentary oversight.

Whilst it is debatable how much this is landing with the judges, markets have certainly been made nervous that even though the Government is appealing, they have a chance of winning. Whilst this is not a murder trail with sudden new evidence coming to light, with little precedence for such a decision in the past, the uncertainty about which way the Supreme Court may swing is high.

This uncertainty is what has caused Sterling to lose some of its recent strength, it is simply a gift for anyone with a GBP/EUR interest that this has coincided with news of further financial stimulus in the Eurozone to reverse some of these losses. US Dollar and Australian Dollar buyers are unfortunately not so lucky.

Moving forward the US interest rate decision on Wednesday next week will likely provide a further boon for Euro buyers (due to the special relationship between USD/EUR) and additional woes for US Dollar buyers.

In the medium term however, the Pound is expected to have its rally against all major currencies dampened further by year-end profit taking which is set to take place in the latter part of December, so whilst US Dollar and AUD buyers may need to move with greater urgency, Euro buyers may see a ‘sweet spot’ emerging on GBP/EUR over the next week or so.

In these instances it is best to be in a position to move fairly quickly in case any tempting opportunities emerge, and the well informed purchaser will certainly have an advantage to avoid being ‘last to the party’ and being forced to accept a rate of exchange below any premium which is reached.

I am in a position to offer a proactive service to help my customers in timing their transfers, particularly during these volatile periods, in order to secure desirable exchange rates. I work for one of the UK’s leading brokerages with the average tenure of our dealer’s being in excess of 8 years in this job – longer than most companies in their entirety – so I am ideally placed to secure the most competitive rates and have never had an issue beating the rates of exchange on offer elsewhere for GBP/EUR, GBP/USD, and GBP/AUD. Simply contact me on jjp@currencies.co.uk and I will respond as soon as I am able.

Similarly if you are looking to be buying Sterling, as my article points out there are likely to be further opportunities for you later in the month with a cheaper Pound, so you can contact me to discuss the options open to you to monitor the markets and secure a desired exchange rate.

 

Buying Euro and Dollar rates soar from Boris and David’s comments (Joshua Privett)

Fresh two and a half month highs were reached earlier today on buying Euro and Dollar exchange rates following surprising and contentious comments made by the men spearheading the Brexit project.

David Davis and Boris Johnson, the Brexit Secretary and the Foreign Secretary respectively, have come out this morning seemingly having taken a U-turn on key positions which financial markets pounced on immediately. At its peak GBP/EUR bridged 1.1950, GBP/USD breached 1.2690 and GBP/AUD just pipped over 1.7150.

Financial markets have made no secret that they want the UK to remain part of the single market. Collectively there is greater appetite for investment in the Pound if they know the transition away from the EU is expected to be gentler – hence the term ‘soft Brexit’.

Johnson, as was shown all over major newspapers today, has stated privately to ambassadors that he was ‘all for’ free movement of people. And David Davis has stated that the UK will likely continue to pay for preferential access to the single market today in a statement in the House of Commons.

An utter reversal on both Government and Boris’s own public opinions stated recently, and the greater likelihood of a softer Brexit suggested in the comments saw the Pound soar against all major pairings, with buying Euros and US Dollar buyers being the key winners.

However, as the day waned on the ‘run’ on the Pound began to lose its momentum and eventually fell back heavily. Speculators taking profit from such serious movements today are seen as the root cause.

Moving forward, GBP/EUR, GBP/USD and GBP/AUD exchange rates will need to navigate the upcoming Italian Referendum and US non-farm payroll figures.

The US figures are to be released tomorrow lunchtime and the Italian Referendum results are expected on Monday.

The referendum will be key for buying Euro rates as a NO result will likely mean the rise of the far right over in Italy, and create further questions marks regarding the Eurozone’s future. Polls are currently neck and neck, but heavy movement is expected on Monday either way. As such a premium will be put on being able to move quickly on Monday to secure tempting levels or protect yourself from any sudden downturns.

I strongly recommend that anyone with a foreign currency requirement using Sterling should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer to safeguard it from any adverse movements and to discuss how best to seize any particularly tempting levels which emerge in the short term.

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

I will also remind our regular readers that if you are looking to be securing an exchange rate for a future purchase based on the recent improvements in the Pound, this is easily done using a forward contract, whereby the rate is pre-booked at today’s levels to be utilized for a later date. Again simply email me on jjp@currencies.co.uk to discuss this further.

Sterling exchange rates enter December in good health, but will the Pound continue to climb? (Joseph Wright)

The Pound is entering the new month in a much stronger position than it entered November, after the currency gained an impressive 4.5% against the Euro through last month as well as performing well against a number of other major currencies.

Yesterday afternoon the Pound spiked upward against the Euro, as did the US Dollar, after both UK GILT (bonds issued by the UK government) and US government issued bond yields both increased in anticipating of further quantitative easing from the European Central Bank, (ECB) and also expectations of an aggressive fiscal plan by the US President elect Donald Trump.

Whilst complicated the result was Sterling strength across the board.

People planning on converting Pounds into another major currency such as the US Dollar, the Euro or the Australian Dollar for example have been presented with a much more attractive opportunity than this time last month, due to the Pounds unexpected gains off the back of the unexpected election of Trump.

Personally, I think the Pound may gain further on the Euro as we enter December and the Italian Referendum this weekend may be the catalyst. If the Italian Prime Minister (Matteo Renzi) is unsuccessful in his plan to change the Italian constitution in order to reform the banking system in Italy, I think we could see further Euro weakness as soon as next week. Feel free to get in touch if you wish to be kept updated on this topic.

Those in the process of buying property abroad or moving large amounts of money internationally have the chance to save thousands if we compare the Pounds value now compared with just a month ago, and with the help of a specialist currency exchange brokerage like ourselves we can help clients get even more for their money as our rates can improve on the banks offerings by between 1-4%.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in contact with me on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.

You can also call in to speak with me over the phone on 01494 787 478, just ask reception for Joe if I don’t answer myself. 

 

Sterling riding high, but will the Pound’s rally continue? (Daniel Johnson)

Pound Sterling Forecast

Since Philip Hammond’s Autumn statement we have seen the Pound rally against the majority of major currencies.  Hammond delivered a realistic , non dramatic statement but made it clear he will be attempting to make Britain resilient to any problems that come from a possible exit from the EU.

The pound has hit new buoyancy levels against the majors, but I am not convinced Sterling will continue to rise in value. We have the Supreme Court Judgement which will determine whether the government will get the final say on the triggering of Article 50 which will officially start the process of Britain exiting the EU.  Scotland also may get involved, the argument that Scotland will be impacted by the decision bears credibility.

If the decision is that the government will have their say then the possibility of a soft Brexit becomes more likely, this should strengthen the Pound, but will elongate the exit process and Theresa May’s target of leaving the EU by the end of March could well be pushed back. If you are looking to sell the Pound you may wish to consider moving before this event.

Pound to US Dollar exchange rates in detail

The key upcoming event for the US is the interest rate decision on 14th December. Janet Yellen the head of the Federal Reserve indicated at the end of last year that there would be several rate hikes in 2016, but none have yet to materialise. Although the FED is meant to act as a separate entity to the government, the political uncertainty created around who would win the presidency may have been a factor in keeping rates on hold.

Trump has been highly critical of Yellen’s unwillingness to hike rates and has gone as far to threaten her with a more bullish replacement. This could well force Yellen’s hand on December 14th and there is a high probability of a rise in interest rates. If you are buying US Dollars it may be wise to move before the interest rate decision. Keep an eye on Non-Farm Payrolls on Friday as this event is notorious for it’s unpredictability and ability to move markets.

Pound to Euro exchange rates in detail

With current levels close to 1.18, a near two month high it is tempting to perform your trade if you are selling Sterling with the Supreme Court judgement and the European Central Bank’s interest rate decision early in December. Many econimists are predicting that Mario Draghi the Head of the ECB will let slip his plans for future Quantitative Easing (QE). QE is essentially pumping moneyinto an economy to stimulate growth. The ECB is currently injecting €80bn a month into the Eurozone. The current program is due to end in March, but with little change of inflation I would be surprised to see QE not continue. There is also the possibility of an increase in monthly increments. If news does filter through on 8th December this could be what the gambling Sterling seller could have been waiting for.

If you have a currency trade it is crucial to be in touch with an experienced broker. The timing of your trade is vital, If you have an experienced broker on board they can keep you up to date with what is happening in the market to help you make an informed decision. I will be happy to help you personally. If you inform me of  the currency pair you are trading, volume and time scale and I will provide a free individual trading strategy. I work for one of the top brokerages in the country and as such I am in a position to better almost every competitors rate of exchange. You would  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.

Daniel Johnson

Executive Dealer – Foreign Currency Direct PLC