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The week ahead for the Pound – Expectations against Euro, Dollar, Australian Dollar, New Zealand Dollar and Canadian Dollar

Here are my thoughts on the week ahead for the pound against the following currencies. Please do remember you can sign up to our mailing list for free by filling in the form at the top right hand corner of this page and you can also make an enquiry should you have a currency requirement by email me directly djw@currencies.co.uk

Sterling – Euro

The Pound has once again been in great shape against the Euro creeping nearer and nearer to a four year high and following the rate cut by the ECB, problems with the banks in Spain and the potential looming of an Italian bailout I just cannot see the Euro fighting back with any great force anytime soon. Indeed our head of Corporate trading has now changed his view now seeing the Pound go above 1.30 in the coming weeks, this is a man with over 25 years experience in the industry so I treat his opinion as extremely valuable. The Bank of England could easily step in and ruin this outlook with key releases from them tomorrow and Wednesday as discussed below.

Sterling - Dollar

With the general outlook across the globe being fairly poor at present and doom/gloom looking like it may be on-going for some time I expect the Dollar to be the main winner of the week as traders and investors stay risk averse and to continue to plunge into the Greenback. We do see retail sales out for the U.S this afternoon which may set the scene for the week however I think movement for this particular currency will be dependant on attitude to risk rather than economic data.

Sterling – Australian Dollar

The AUD took a minor hit last week following data from China showing that their growth had slowed down (however figures were still good). I feel the AUD may have an ok week this week as we have seen demand for Asian shares start the week on a high which should help boost the Aussie. Expectations for the Reserve Bank of Australia to bring in measurements to aid growth could also help the AUD have a promising week however no mention of this and more problems in Europe could easily push this rate the other way. This pairing can be extremely volatile, if you have a trade to carry out and want to have me as an extra pair of eyes and ears on the market feel free to get in touch djw@currencies.co.uk

Sterling – New Zealand Dollar

Again Asian stocks have started the NZD off on the right foot this week and the high yielding NZD will continue to be sought after as long as risk appetite stays around. Like with the AUD I feel this currency may climb further against the Pound this week unless we see big news for Europe leading to investors pulling out of riskier funds and currencies such as the AUD, NZD and ZAR falling – This could easily happen so make sure you are on the ball should you need these currencies.

Sterling – Canadian Dollar

Sterling may lose the gains we saw on Friday as the CAD follows the trend of the USD and is a good bet to strengthen back a little this week. I still feel it is going to stay fairly rangebound however between 1.565 and 1.5850 it is just a case of catching it at the right time.

Overall There are some key releases for the U.K that could easily damage the Pound this week, our good friend BOE Governor Mervyn King speaks tomorrow following a huge amount of inflation data and then on Wednesday the Bank of England minutes are out at 09:30am and we all know how the BOE seem to like knocking the Pound back down a little when things are looking on the up so be very aware of the markets on Wednesday morning.

If you would like to be kept up to date with market movements or have a currency transfer to carry out then i’m confident I can beat the rate you are getting from your bank or current broker, even if you already feel you are getting a good deal – There is generally always room for improvement on these markets. Why not test me? You can email me directly on djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you both in terms of great rates and customer service. I look forward to speaking with you.

 

New Zealand Prime Minister talks the Kiwi Dollar lower.

Sterling exchange rates have strengthened by over 0.5% this morning against the Kiwi Dollar as last night the New Zealand Prime Minister John Key tried to talk the  currency lower yesterday by calling the NZD overvalued even as the country’s economic growth looks set to outpace the UK, EU, and theUS this year.

Key stated “we’re considering what we can do to resist a rising exchange rate” and “kiwi strength was the result of weakness in US and European economies.” The pound is currently down around 3% this year against the Kiwi and the strong economy in New Zealand is meaning that the Reserve Bank of New Zealand are finding it difficult to raise interest rates as this would strengthen the currency even further.

New Zealand have set their interest rates at a low of 2.5% For those of you that require buying NZD if an unlikely rate hike occurs we may see the KIWI continue its run on the pound. At some point New Zealand will probably raise rates this year. If you are holding out for levels of 2.0 or above you may want to move your target level as sterling has been as low as 1.84 this year. Make sure that you are in a position to be able to move on your funds should a movement be favourable before this occurs. If you require buying or selling the KIWI Dollar then please feel free to contact me at bma@currencies.co.uk and we can discuss all the options that may be suited to your situation. You can even call me on 01494 787 478 if you would like to discuss things in more detail. Just ask for Ben Amrany

Forecast on data releases that could effect GBP, EUR, USD, AUD & NZD rates.

Good morning readers,

With lots of data out today and tomorrow for the UK and other economies we will take a look at some of the releases and how it may affect your upcoming currency requirement. Scroll down the list to find the currencies that apply to you. If at any time you would like to speak with me regarding your future currency exchange then please do contact me at bma@currencies.co.uk

AUD - The first data release of the day was down under in Australia. They had their GDP figures released just after midnight and it showed a contraction in their economy. Now because their economy slowed more than expected it has increased the likelihood that the Reserve Bank of Australia (RBA) will cut interest rates again to bolster demand. This caused some AUD weakness overnight with the rates moving from 1.4861 to 1.4957.

Moving forward the RBA are under increasing pressure to weaken the Aussie Dollar as it is harming their exports. If further bad data comes out of Australia like employment figures then you will find that there will be further speculation of rate cuts which will continue to slightly weaken the Aussie Dollar. If you have Aussie Dollars to sell I personally feel  that with the current high levels against a range of other currencies you may miss the boat if you do not act fast. If you require buying Aussie’s in the near future hold tight as i feel that mid 1.50′s is around the corner. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

EURO – At 11.00 this morning Germany are releasing their factory orders and expectations are that we will see a big contraction on the previous months figures from 1.7% down to 0.5%. If the figure comes out at 0.5% or better then I will expect to see the Euro show some signs of strength.

The big story though is still Greece. Although starting to get very boring it will have a massive effect on Euro rates over the next month. The private sector still need to formally agree their debt swap which is meant to take place on Thursday and only once this is done can Greece agree to activate the 130 billion Euros. Then all eyes will be keen to see if they can meet the part repayment by the 20th of March. Any problem fulfilling the agreement could lead to a disorderly Greek default and potentially trigger further problems across the Euro Zone in Spain & Italy.

With an interest rate decision also looming tomorrow it will be very interesting to hear the comments that come out from super Mario the head of the ECB straight after the release. The markets will be listening very closely to his words and this can bring some of the most volatile times to GBP/EUR & USD/EUR rates. I would expect to see a range bound going forward from 1.1750/1.2050 for GBP and 1.29/1.3250 for the USD over the next couple of weeks. If you are buying or selling the Euro and you can achieve these levels or better I would capitalise. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

USD – For the US today there are a fair few data releases out from Mortgages approvals to the consumer credit change. The most important though for those with an actual exchange to make will be at 13.30 today in the form of the Nonfarm productivity. This shows the output per Hour of labor worked. Non-farm Productivity indicates the overall business health in the US, which has an influence on GDP. The level is expected to decline to 0.8% for Q4 last year.

You may have witnessed over the last few days that the USD has started to strengthen again. It has moved against the pound from 1.5950 down to 1.5709. The ongoing issues in Europe are once again benefiting the USD as the Dollar is being used as a safe haven option once again. With the Greek issue not yet sorted this trend could continue. This year the pound has been as low as around  1.5250/1.53. With sterling still trading at 5 cents higher now may be a good move to capitalise before we potentially see any further Dollar strength. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

NZD – At 8.00pm this evening the Reserve Bank of New Zealand (RBNZ) will be announcing their interest rate decision for this month. We are expecting rates to be held at 2.5% Sterling exchange rates have significantly strengthened by 10 cents in the last few weeks. Sterling spiked to above 1.94 yesterday but is today back down at 1.9240. Like in Europe straight after the rate decision the governor of the RBNZ Alan Bollard will give a speech on the state of New Zealand’s economy and what their stance is on any future policy. The markets will keep a close eye on this and there could be some volatile times during the speech. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

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What will happen to the Pound against the Euro, Dollar, Australian Dollar, New Zealand Dollar, Canadian Dollar, South African Rand and Swiss Franc in the near future?

Key market mover this week:  BOE
Interest rate decision, further QE. On-going Greek debt agreement.

Important DataIf you are considering a trade soon, it’s worth being aware of:

Tomorrow 09:30am – A host of Manufacturing and Industrial Production
data
along with Trade balance figures for the U.K This may throw anything up,
production figures have not been too bad of late however as per usual with
the U.K as soon as things seem on the up we tend to get figures that come out
that knock us straight back down again, so be very wary of this one.

Tomorrow 12:00 – Bank of England Interest Rate Decision  No change in rates is
expected however there is continuing speculation regarding further
Quantitative Easing. Regular traders will be aware that any mention of QE
tends to weaken the Pound so should we see this tomorrow then we may see
Sterling weakness against all major currencies

 Tomorrow 12:45pm – European Central Bank Interest Rate decision There is a slight chance of a rate cut in the Eurozone tomorrow however most major analysts expect the
ECB to hold off for the time being. Key will be the press conference
following the speech which may suggest how the ECB are planning to attack the
crisis going forward.

On-going yet imminent: Greek debt agreement  Signs are this is now
close to being tied up and signed off, in past months whenever an
agreement/resolution (no matter how little I believe most think it will work)
is put into place, investor’s confidence in the Euro rises and in turn the
Euro tends to strengthen. By the sound of it the agreement may be finally
signed off on the weekend by Greek Parliament however anything may happen in
the meantime.

Below is a further outline of
recent trends and themes for some of our main currency pairs.

Market Overview 

GBPEUR

**Still close to 16 month
high buying euros**

It would not surprise me to see
the Euro make a minor fight back in the next week or so, I do not expect
major Euro strength however unless there is a rate cut in Europe then QE
for the Pound and some certainty on Greece may well give it a nudge in the
right direction.

GBPUSD

**2 month high for buying
Dollars**

This pairing has been a hard one
to predict of late, with all of the uncertainty for Greece one would expect
the USD to have gained ground however we have seen quite the opposite over
the past week or so. Personally I feel that the mention of no interest rate
hike until late 2014 will hold the Dollar back from major strength however
I still think it will get stronger again against the Pound in the next week
or so.
       GBPZAR

GBPAUD

GBPNZD

**27 year high for selling
AUD**

At present these perceived
‘riskier’ currencies are winning the battle and seemingly strengthening
with great ease. The AUD is breaking long term records, the NZD is closing
in on them and the ZAR has recovered back an awful long way. The main issue
is that this has happened during major uncertainty within Europe.
Uncertainty usually weakens such currencies so I would be a little wary
that when we do see potentially positive news for Europe and negative for
the U.K we could see all of these currencies strengthen further and the
Pound to get even lower against them, however anything can happen and
markets aren’t moving how they are supposed to at present!
GBP-CHF There is continuing speculation
that the SNB (Swiss National Bank) may move to devalue the Franc again soon
as rates are edging closer to the artificially pegged benchmark they set
against the Euro of 1.20. If this happens

For the best exchange
rates …
Contact me

Daniel
Wright
Associate DirectorForeign Currency Direct
djw@currencies.co.uk0800 328 5884 / +44 1494 725353

Get in touch today…

The Budget – What effect may it have on your currency transfers going forward? Pound, Euro, Dollar, Australian Dollar, New Zealand Dollar, South African Rand

Looking at the budget in bullet point terms – you would have thought the pound may have lost ground today – Although there are some promising parts believe it or not!

Here are the key points that you need to be aware of:

  • Growth forecasts for UK economy cut 0.9% this year and 0.7% next year
  • Borrowing forecasts revised up
  • £40bn “credit easing” scheme to underwrite bank loans to small firms
  • £5bn plan to improve national infrastructure over three years. Further £25bn could be spent in future years
  • £1bn scheme to subsidise work placements for the young unemployed
  • Mortgage indemnity scheme to help 100,000 people get onto the property ladder
  • £500m housebuilding plan in England
  • January rise in regulated rail fares to be capped at 6.2%, not 8.2%
  • Doubling of free childcare places for deprived two-year-olds to 260,000 in England
  • 3p fuel duty rise due in January to be delayed or frozen
  • Bank levy to be increased

Without a doubt next year will be tough for the U.K and indeed the world as a whole, the key for Pound strength is Sterling being the best of a bad bunch… You may have thought that would be reasonably easy with the U.S credit rating being downgraded and an increasing amount of problems within Europe that seem to be rising on almost a daily basis as contagion spreads rapidly like a nasty epidemic that nobody in truth really wants to see.

The trouble is, although we aren’t part of the marriage of the Euro Zone, we have been in bed with it so we are just as open to the problems here in U.K and although Euro buyers may be praying for more problems to arise, they actually hinder the Pound as well.

Also, when there are troubles in the Euro Zone the Dollar seems to be gaining as well due to investors looking for a safer haven to avoid risk. (With the USD being a ‘safer haven’ along with gold being priced in Dollars both lead to an increase in demand and therefore price to buy USD) This means that anyone buying Dollars or Euros with the Pound could actually do with the Euro Zone slowly getting out of trouble with the U.K however being leaps and bounds ahead, raising interest rates at a greater pace and finally looking a little like we used to 5 years ago before this mess all came to light.

An interest rate hike generally is seen as positive for the currency concerned and a cut negative, part of the reason we have not gained against the Euro as many would have imagined – The Euro is more attractive to investors because of a higher rate.

Those looking for Australian and New Zealand Dollars or South African Rand, again a risk factor is a big player. The more trouble globally the cheaper these currencies should be to buy, the more solutions that are seemingly working the more attractive the riskier currencies become, especially by means of carry trading – This is where an investor borrows a currency  with a low interest rate (JPY,GBP) and moves funds to one with a much higher rate (AUD, NZD, ZAR) making their money on the difference. Clearly the performance of these countries economies will also be key in 2012 so watch this space and keep up to date with our timely, non technical updates that hopefully anyone can understand.

If you have a currency requirement imminently or in the coming months then do feel free to contact me directly djw@currencies.co.uk and I will be confident that you receive a much better rate of exchange than using your bank or another broker by using me, along with the very highest level of customer service throughout your transfer.

Interest rates will be market driver for sterling against a host of majors

With a busy week ahead for data releases, sterling exchange rates will mainly be driven by interest rate decisions around the globe.

AUSTRALIA

It will start off at 5.30 tomorrow morning when Australia will set their rates for the coming month. Australia’s interest rates are at 4.75% and a lot higher than here in the UK. Rates are expected to be kept on hold after their last quarters GDP showed a dip for the first time since 2009. If however we do see the RBA reduce rates by a quarter of a point then we may see the pound strengthen from close to all time current lows. I would not hold my breath for this to happen though as the consensus is that rates will be left unchanged.

NEW ZEALAND

Then on Wednesday evening it is Australia’s partners New Zealand with their rate decision. They recently reduced interest rates after the earthquake that hit Christchurch to help boost the economy. Since then they have had a batch of positive data releases and their are rumours that they will shortly be raising rates a couple of times before the end of the year. The KIWI Dollar has recently strengthened against a host of currencies hitting all time highs against the pound and US Dollar. I would expect to see this trend continue for some time until the UK has its own interest rate hike.

EURO ZONE & UK

Then this Thursday lunchtime 45 minutes will split decisions in the UK and Euro. The pound has weakened by around 2% in the last week against the Euro as Greece had agreed in principle a new bailout package. Their have once again been comments from the ECB that interest rates in the Euro may rise over the coming months. The markets have been predicting a rate hike in July. If though the rate hike hits the markets this week then we could see the pound fall back down to its May low of 1.1054. A press conference after the decision will take place and if no movement has occurred from the decision then the press conference can make the markets extremely volatile as it assesses comments from the ECB president.

Their have been rumours that the UK is not a rate hike until 2012 now. I personally feel that we may see a hike in Q4. So for this reason I feel this months rate decision will be a non event for the pound but we should look out for the minutes of the rate decision 2 weeks later. Normally the minutes will give us an indication of how many members voted for rate hikes and can give an indication on future policy stance.

For the pound to really strengthen against a host of currencies we will want to see an indication that rates will rise in the near future. If this does not happen then I think the pound will continue to trade at low levels against the AUD, NZD and EUR

If you would like more information on any data releases to hit the markets please fill in the enquiry form on the side of this page or email me directly with your name, number and enquiry on bma@currencies.co.uk. I will come back to you immediately with info and explain the mechanics of achieving our award winning rates.

KIWI Dollar goes from strength to strength

The pound has hit an all time low against the New Zealand Dollar falling below 2 Dollars to the pound. The rate actually hit a low of 1.9981 as the Kiwi Dollar seems to be strengthening against a host of currencies at present. The prospect of rate hikes, a growing economy, and higher commodity prices have led to calls from exporters for the MPC to weaken the currency.

The strength behind the Kiwi seems to be about strong  New Zealand fundamentals at present and the improvement and resilience of the economy has been much better than you would have been expected a month or two after the (February 22) earthquake.

New Zealand have had a stream of bullish economic data recently and yesterday’s merchandise trade data, which showed a surplus of $1.1 billion in April, the highest monthly surplus on record. It has helped the Kiwi to strengthen by nearly 15% against the USD this year.

So looking forward for anyone with a requirement to buy NZD over the coming months the forecast does not paint a pretty picture with potential future interest rate hikes in New Zealand. If however you are looking at moving a lump sum back to the UK, US or Australia then now could not be a better time. If you would like assistance in getting more for your money when making your money transfer then please feel free to contact me on bma@currencies.co.uk and I can explain the mechanics of trading with us and we can have a chat about potential future movements for any currency pairing.

NEW ZEALAND DOLLAR STILL STRENGTHENING

The New Zealand Dollar continues to go from strength to strength since the dust has settled from the earthquake. The pound hit a high a few weeks ago of 2.2250 but has quickly weakened and reached a low of 2.0550 before pulling back into the 2.06’s yesterday.

It goes to show you how quickly exchange rates can move in a short amount of time. I had a client who secured their Kiwi Dollars they needed for their property purchase on a forward contract when the rate spiked above 2.20. They purchased 250000 NZD and compared to them trading now have saved over £7700. I spoke with them recently and they were absolutely delighted with how much they have saved by deciding to secure there funds on the forward contract.

If you feel that this contract may be suitable for your requirements please feel free to contact us on the enquiry form and an author from this site will be in touch.

Sterling starts the week up against Euro, Dollar, Australian Dollar, Canadian Dollar, New Zealand Dollar, South African Rand, Swiss Franc, Thai Bhat, Swedish Krona, Hong Kong Dollar and many more

A reasonably positive start to the week for the Pound as rates have started ever so slightly on the up most notably agains the Swiss Franc gaining 0.47% at the time of writing this.

The main two reasons for the minor boost are still confidence rising following some pretty solid data releases at the back end of last week for the construction and services sectors and specullation on what the Bank of England will bring in their interest rate decision on Thursday at 12:00.

There is a minimal chance of a rate hike however I do not believe that they will be able to do this just yet, which may lead to Sterling potentialy losing ground at the back end of the week however you never know, working on the currency markets for years I have realised you always need to be ready for surprises!

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Kiwi Dollar strengthens immensely against a host of major currencies

Pound sterling exchange rates weakened last night as New Zealand’s unemployment rate fell more than expected in Q3 to 6.4% from 6.8% in Q2. Straight after the release the Kiwi Dollar strengthened from 2.07 to 2.04 after stabilising at a level of 2.05. Some analysts believe that the fall in unemployment could spark further interest rate hikes which helped the currency strengthen.

If you are planning to immigrate to New Zealand in the near future you may want to speak with us to find out the future outlook for the currency pair as the NZD is hovering at over a 2 year high against the US Dollar and almost historical highs against the pound.

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