Tag Archives: meeting
Sterling report and forecast – “If Greece gets the green light the Euro may start moving through the gears and driving forward once again” (Daniel Wright)
An extremely important week ahead for Europe and indeed the Euro as European leaders meet once again today to try and get a resolution on the next bout of Greek aid. Looking back at what has happened when we have seen the Europeans come to a conclusion on pending decisions like this previously you tend to see the Euro strengthen as confidence in the Eurozone once again rises.
German Chancellor Angela Merkel seemed confident that this would be agreed in the coming few days saying “There’s no time to waste in finding a solution for Greece. a plan is being intensively worked on,” she said. With little data out today for the U.K and indeed the Eurozone the key for today will be progression with the almost certain agreement being announced. Personally I would not be surprised to see further Euro strength so if you have a transfer involving buying Euros to carry out it may be prudent to contact your account manager this morning on 01494 725353.
We have a similar situation with this pairing however the focus for the States at present is the on-going issue with the Fiscal Cliff. Personally I feel this will get resolved however it will no doubt be at the eleventh hour so I would expect Dollar weakness leading up to the deadline and then a solid USD fight back should a positive outcome be announced.
GDP figures due out for both the U.K on Wednesday and the States on Thursday, along with a considerable amount of economic data for the U.S from Wednesday onwards could lead to a volatile end to the week. If you are looking to buy USD then let us be the eyes and ears on the market for you, click here and one of our experienced and knowledgeable traders will call you back.
There are still plenty of problems for South Africa and I personally feel there will be lots to come in the next few weeks. Interest rates were kept on hold last week but the door is open for us to see an interest rate cut for South Africa in the near future. Recent strikes have led to manufacturing production figures absolutely plummeting and this certainly doesn’t seem to be the end of what could be huge problems for the ZAR which personally I feel may lead to the Rand being extremely volatile and indeed the Pound gaining further ground this week.
A quiet week for Australia and New Zealand on the economic data front however attitude to risk will play a big part in where these pairings will head this week. Should the Greek aid go ahead you would imagine currencies such as the AUD and NZD would strengthen as investors will be more inclined to take on riskier currencies. Global attitude to risk is sure to be key in the coming months with Greece, Spain and the Fiscal cliff being the main drivers for this.
Important Economic data out over the next few days
Today European ECOFIN meeting – As mentioned this could be key for the next tranche of Greek aid, investors will be keeping a close eye on progress throughout the day.
Tomorrow (AM) U.K GDP data – This latest set of figures is out tomorrow morning and the market isn’t expecting much of a shock however you should be wary that the market is there to surprise us.
Tomorrow (PM) A flurry of data for the States tomorrow afternoon with the pick of the bunch being housing data, Consumer Confidence and Federal Reserve’s Ben Bernanke, speaking at 13:30pm.
Wednesday (AM) First thing Wednesday morning we have the release of Swiss GDP data so this with an interest in the Swiss Franc may wish to have either a limit order or stop loss in place for this as it is released at 06:45am.
Thursday (PM) We see the release of U.S GDP on Thursday afternoon, this could easily effect all major currencies so be prepared for a volatile afternoon no matter what currency pairing you are interested in.
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Ongoing European crisis, global uncertainty and what it means for your currency transfer
EU Finance ministers met over the weekend and will be in discussion most of the week to finally try and come up with a resolution to a problem that appears to be spiraling out of control across Europe. Greece will need a second bailout, European banks need to be recapitalized to cope with Greek debt exposure and numerous economies are desperately trying to bring in cuts to take their expenditure below GDP.
Many economies within Europe have large exposure to Greek debt and if Greece is allowed to fail, many others may slowly follow suit. In my opinion the meetings this weekend and that we have seen after the last few months are only going to bring in temporary solutions and that inevitably at some point, finance ministers will have to throw in the towel and stop throwing money into the Greek black hole.
No headline deal has been announced however so far on Saturday ministers announced that €110 Billion of new capital must be raised by European banks to cover their loans to indebted nations, as the EFSF (European Financial Stability Fund) quite honestly has too much to deal with trying to prop up Greece, Italy, Spain and Portugal – To be kept up to date with the very latest releases and market movements get in touch by filling in the enquiry form on the right hand side of this page and let us be the eyes and ears on the market for you.
If you have a requirement to buy or sell Euros this week then you should ensure you are protected against adverse market movements by means of a stop loss order. An announcement can be made at any time and we will be sure to be receiving constant updates over the first few days of the week leading to a volatile time for the Euro.
Personally I feel there may be a few spikes for Sterling against the Euro this week, however like in the past once the meeting has ended and a new apparent fantastic approach to resolving the problems has been announced the Euro may strengthen considerably, putting us back down to 1.13 by the end of the week. If you get the chance to buy when the mid-market level is above that, then in my opinion I would be highly tempted. Contact us today by filling in the enquiry form on the right hand side of this page should you be worried about what the week may bring and one of our experienced traders will be happy to explain the various options available to you.
U.S credit rating downgrade again?
An interesting report I read over the weekend suggests that the U.S are in for another credit rating downgrade before the end of the year, according to the Bank of America. Ratings agencies had previously said that if congress did not have credible solutions and policies in place regarding debt problems in the states then this is something they would have to look at, and a downgrade could happen as soon as November.
Although you may think this would weaken the Dollar, the downgrade we saw for the States last time led to Dollar strength, probably as it heightened global uncertainty and in risk-averse times the Dollar is still one of the frontrunners as a safe haven for investors to place their funds into. One other note of caution is the saying on the market that when the U.S sneezes the U.K catches a cold, so how much longer will we indeed hold on to our top rating and what effect will that have on the Pound…. Surely a negative one?
Sterling forecast – the week ahead
Without a doubt the most important release on the financial markets this week will be the result of the current European summit, this will affect all currencies worldwide as it will change attitude to risk and potentially paint the picture as to where the world economy will be in the lead up to Christmas. Personally I feel the result will lead to immediate Euro strength and the antipodean currencies (AUD,NZD,ZAR) will also gain against the Pound as for the time being as investors will still be willing to get invest in the riskier currencies, increasing demand and making them stronger.
Cable (GBP-USD) is expected to plummet by top foreign exchange information site FX Street, however I feel that this week we could temporarily break the 1.60 barrier for the final time this year and we see key Gross Domestic Product figures out for the States on Wednesday at 13:30pm.
There are numerous interest rate decisions throughout the week with Canada, New Zealand and Japan all expected to keep rates on hold, any changes to expectations may lead to high volatility, be aware too that the markets are on alert for Japan to move to devalue the Yen and the interest decision overnight on Tuesday may be the ideal time for them to do so.
In short, an extremely volatile week ahead beckons for all major currencies and those in a position to act fast will benefit from opportunities that may arise, keep in close contact with your account manager and if you know you have an imminent requirement then email me firstname.lastname@example.org and we will be more than happy to assist you.
If you have any questions or queries regarding anything in this report then please do feel free to email me email@example.com fill in the enquiry form on the right hand side of this page..