Tag Archives: GBPUSD exhange rates
There is no shortage of the positive things for the pound at present. It is the only major currency genuinely on course to raise interest rates and the British economy is predicted to be one of the fastest growing in the next few months. Unemployment is falling and the economy is growing, the green shoots have for some finally sprouted…
A quick look up ahead however shows that the path to a stronger pound isn’t quite as clear as some forecasters seem to believe. There are three key elements to look out for.
- Political Uncertainty -
Usually ahead of an election a currency weakens. The Scottish Referendum in September still has many unanswered questions and it would be foolish to discount late swing votes. Markets can be fearful creatures and if sentiments turn negative the pound may lose value. Next year is the General Election which could provide plenty of opportunities for GBP weakness. Even though the Bank of England is independent from the Government will rising interest rates be an election topic? Already portrayed as the ‘mean’ party, the Tories may struggle to maintain their economic plan under a new coalition and Labour’s economic plans look very anti – business…
There is also the prospect of the UK leaving the EU, again it is the uncertainty these events present which could undermine GBP gains…
- Rising Interest Rates may derail the economy -
Rising Interest rates could do more harm than good! Property prices are principally rising in the South East, mainly London and this is skewing the market. Other areas of the country are actually seeing prices fall or remain stagnant. Rising Interest rates may serve to undermine recovery in the housing market across the housing market making it more difficult for purchasers to get a mortgage and reducing the disposable income (that is spent in the wider economy helping for example Retail sales) those with mortgages have.
Many commentators have pointed out we are in a new ‘low interest rate’ economy globally. There are drawbacks to this but perhaps the UK needs to be stronger on its feet before interest rates rise.
- A strong pound can be bad for exports and growth prospects -
There have been some of the UK’s biggest companies this week highlighting the detrimental effect the strong pound is having on their profits. Rising interest rates may serve to strengthen the pound further making UK manufacturing and service less competitive in the global economy.
All in all the pound is at multi year highs against many currencies. Assuming rates will remain where they are is a foolish assumption and anyone considering moving larger volumes of currency should note the difference even 1 cent can make on a big volume of money.
If you need to buy or sell a foreign currency we can offer assistance understanding the market and getting the best rates on your deals. We are a group of specialist currency brokers writing this blog for your help. Please feel free to contact me Jonathan directly to learn more.
Looking ahead is always fraught with difficulties but sometimes it is easier when you know a little more than the average. Just now sterling is at 1.2613 on GBPEUR and 1.7160 on GBPUSD. Other exchange rates are also at multi year highs giving some well deserved relief for anyone transferring money abroad in recent years! I was helping some clients buying property in Europe at 1.10 a few years ago and I remember businesses buying the USD cheering at being able to get 1.50!
Tomorrow we have a very important release for the UK with the latest labour market statistics including the all important Unemployment rate. With Inflation having unexpectedly risen changes in Average earnings will attract slightly more attention, the prospects for GBP strength on the whole seem high.
Thursday is the all important CPI (Consumer Price Index) Inflation data for the Eurozone which will outline just how justified recent ECB (European Central Bank) actions have been in attempting to quell falling inflation or ‘disinflation’. Sterling may therefore make some further gains against a battered Euro.
Priced In? – Markets have probably been pricing in the prospect of a) good UK data and b) bad Eurozone data so anything that comes out worse than expected for the UK and better than expected for the Eurozone could trigger sharp corrections. Movements of up to one cent should not be ruled out depending on just what happens. I would personally be shooting for better rates to buy a foreign currency towards the end of the week (from tomorrow) in anticipation of some positive UK Unemployment data cementing and even lifting current levels.
Should you have further to hold on you can wait until next Friday when we get the first estimate of UK GDP (Gross Domestic Product) for the UK for Q2. I would personally not be surprised to see the rates tick higher on this release although arguably the good news is already in the market. As with the two releases above for me the risk is to the downside, markets expect positive numbers for the UK. Anything to the contrary could trigger sterling losses.
For more information on how to approach your transaction plus an award winning exchange rate when you do, please speak to me Jonathan Watson on email@example.com or call 01494 787 478.
Sterling has hit the big time this year as it shakes off the worst of the last few years and sets sights on the future. The UK’s economic position has improved massively of late and is arguably now one of the worlds leading economies again. Especially when compared to other leading economies and currencies like for example the US and Euro.
There are risks up ahead of course, notably the Scottish Referendum and any further deterioration in the Eurozone economy. On balance we would have to expect sterling to remain well supported and should it manage to avoid the more obvious risks ahead of next year, we could see further strength in the new year as it becomes more apparent the UK’s recovery is underway and the prospect of raising interest rates looms.
Should you have any currency transfers please don’t hesitate to contact us for a forecast on just where the rates could be once your transaction is settled. Getting the best rates through the multiple sources we trade through, we are very well placed to help you maximise any transfers.
For more information please contact me Jonathan on firstname.lastname@example.org
Today the pound has suffered slightly as Average Earnings figures amongst others showed the Unemployment situation in the UK isn’t quite as buoyant as maybe some investors had hoped. This is good news for anyone who needs to buy the pound as the currency outlook would appear to favour GBP strength, if therefore you can sneak in with a transaction on this spike it is good news.
If you have any transactions to consider selling sterling we could see moves higher soon so do make contact to be kept up to date. For those looking to buy sterling making plans sooner really would appear to be the wisest move since as the economic conditions in the UK improve we should see the pound strengthen.
If you have any transactions to consider please let us know.
Today has been a very quiet day on the market for sterling exchange rates as we saw a slight decline against the Euro but we have seen gains against the AUD & NZD.
Tomorrow sees a raft of data released including economic sentiment figures and consumer confidence numbers in the Eurozone alongside retail sales figures for Italy and unemployment data for Spain. The big news though is likely to be the first revision of UK Gross Domestic Product (Growth figures for the economy) which, if revised up could give the pound a big boost and represent some excellent opportunities for those clients looking to transfer funds internationally. Tuesday afternoon sees the focus move across the Pond to the States with their latest consumer confidence figures being possibly the most notable data set. If you have not traded by close of trading in the evening latest UK consumer confidence figures are set to be announced which will give a good indication as to how UK consumers view the economy and any positive figures here could also contribute to the pound gaining on Wednesday morning.
On Wednesday eyes will move over to data from Europe and the US. If there is a strong GDP number from the UK tomorrow and data from other economies are not so favourable Wednesday could be a very good day for the pound. We have German retail sales and unemployment figures, Spanish GDP figures and probably most notably, the latest set of Eurozone inflation data. Inflation has been one of the main factors influencing the Euro recently as there is a large amount of concern that the single currency economy could fall into deflation which could have lasting pressure on their economy. So, should these figures show another drop it could weaken the EUR and lead to more calls for the European Central Bank to act before it is too late hopefully resulting in a spike for GBP/EUR.
Wednesday afternoon we have US GDP figures which, as per the UK’s are likely to be crucial for USD exchange rates but following this we also have US interest rate decision where rates are expected to remain on hold at the record low of 0.25% and another $10bn being reduced from their bond buying scheme as this continues to taper down. Any change from these expected figures could cause volatility.
So the first part of the week is due to be fairly busy with what will I am sure create good buying opportunities regardless of the currency you require purchasing. I always recommend that clients act on spikes in the market to make your funds go as far as possible. We have different contract options which can give you the peace of mind in knowing exactly how far your funds are going. If you would like more information on the currency service I can provide then please do feel free to contact myself Ben Amrany at email@example.com
For information on what is due out in the latter part of the week please continue to check out our site.
If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at firstname.lastname@example.org