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Sterling has had a solid day to end the week against the Australian Dollar and US dollar but posted heavy losses against the Euro. The pounds losses against the Euro cam about following better than forecast inflation figures. Since reaching a one year high of 1.2270 in January, the pound has since struggled to keep consistent momentum against the single currency remaining range bound between 1.20-1.22 throughout the course of February. Again this pattern has continued with levels testing 1.22 this morning before falling below 1.21.
Recently deflation has been a major concern for Europe. This is decrease in the general price level of goods and services and is viewed as real concern in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. This has been putting pressure on the Euro, however with this morning figures showing inflation levels had not fallen at the pace many had expected has taken some of the pressure off Draghi and the ECB. If the figures had been weaker it may have left Draghi with little option but to cut interest rates, however this scenario is now less likely and hence the stronger showing for the Euro.
Looking at the USD, todays GDP release was as expected falling from 2% to 1.3% month on month. This along with Janet Yellen’s speech yesterday has pushed cable (GBP/USD) though 1.67 and just a cent below a four year high. Long term I believe the dollar will find support and would look for a push back towards 1.60. It will take a little time for Yellen to impose herself and a continuation of the FED’s approach on QE should lend support to the greenback long term. For anyone buying US dollars the current market is showing some value.
Should you have an upcoming bank to bank money exchange to arrange and you would like assistance with your transfer then please get in touch. When making your decision about the timing of your transfer it is best to get as much information as possible. To find out more about the currency service we provide and the various contracts we can offer then please get in touch on 01494 787478. Alternatively email me with a brief overview of your particular requirement and I will happily get in touch to run through your options and to discuss the current market trends. Email Mike at email@example.com
Sterling falls following inflation figures, with the Bank of England and FOMC minutes set to dominate tomorrow (Mike Vaughan)
Sterling exchange rates posted losses against most major currencies today following the UK’s latest inflation figures. Levels fell to 1.9% and below the Bank of England’s target level of 2%. This has made chances of the bank raising interest rates even less likely in the short to medium term and would suggest the record low levels of 0.5% will remain for some time. This has put pressure on sterling with levels reaching a low of 1.2135 against the Euro and 1.6655 against the US dollar. This could be a real opportunity for buyers of sterling as with unemployment figures and the important Bank of England minutes released at 09:30 tomorrow morning the pound could easily see a reversal.
Looking at other data of note look out for inflation figures from the US at 13:30 tomorrow followed by the FOMC minutes at 19:00 from the FED’s interest rate decision earlier this month. As with their UK counterpart the FOMC minutes will give insight as to future monetary policy from the FED and in particular any changes to policy since Janet Yellen has taken over from Ben Bernanke as the head of the Federal Reserve. For me it is likely they will continue with their stance on QE and look at reducing levels by $10bn per month. This I am sure will lend support to the US dollar in the months to come and may also create a shift for currencies such as the AUD and NZD.
As a specialist foreign exchange broker we offer multiple contracts to help our private and corporate clients maximize their fx exposure. This can include the use of forward, stop/loss and limit orders to name a few. When making a decision about the timing of your exchange these contracts can prove invaluable, particularly during times of market volatility. Should you wish to discuss the currency service we provide in more detail then please call the office on 01494 787478 or email Mike using firstname.lastname@example.org
Sterling has started the trading week poorly showing sharp losses against most majors, notably 1.3% against the AUD and NZD, 0.6% against the US dollar and 0.45% against the Euro. With little data out today from the pounds point of view its seems market sentiment is continuing from last week’s manufacturing and industrial production figures in which the data was softer than expected. Likewise the AUD, NZD, CAD (commodity based currencies) have performed well since Fridays weak US non-farm payroll figures, as this suggests the FEDs stance on tapering will still be one of wait and see. With the FED highlighting unemployment as a key area of focus, the weaker figures on Friday suggests ‘tapering’ will stay on hold for now. This could be good news for sellers of these respective currencies, however I for one feel this trend will be short lived and would still expect the pound to return greater value against the AUD and NZD in the weeks to come.
Looking to the rest of the week tomorrow sees a much busier day for the pound with inflation figures at 09:30, this will be followed by retail sales figures on Friday also scheduled for 09:30. Retail sales figures will be of particular interest and are forecast to show a slight improvement and should set the pound on course for a stronger end to the week.
Other data of note will be US retail sales figures tomorrow afternoon at 13:30. Month on month figures are forecast to show a heavy drop and could cause the dollar to weaken tomorrow afternoon. Euro buyers and sellers watch out for industrial production figures at 10:00 tomorrow, and the ECB monthly report and inflation data at 09:00 and 10:00 respectively on Thursday.
Finally those with an interest in the Australian Dollar look out for employment data overnight Thursday.
Should you have an upcoming exchange to arrange and you would like to discuss the currency service we provide and how we can help you achieve a better exchange rate than major banks and other institutions then please contact the office on +44 (0) 1494 787478 or email Mike at email@example.com
It would finally appear exchange rates are returning to some kind of normality following five years of unprecedented levels. Is this a flash in the pan spike that should be capitalised on or is it the start of a future trend?
Sterling has been performing well lately but the gulf between what the Bank of England says and the market’s own projections must be closed at some point. I personally would not be betting against the Bank of England. As warranted as an interest rate hike may become it will present a major problem for home-owner’s paying mortgages and could potentially tip the scales on a housing crash. The last thing the Bank will wish to do is rock the boat too much.
Tomorrow is the latest Unemployment report for the Eurozone alongside Retail figures. Thursday we have the ECB decision and Press Conference which usually moves the market. If you have any Euro transfers making me aware before Thursday may be sensible as this can be a volatile day!
The Fed is now embarking on the QE taper but market reaction has so far been muted with no major USD gains. Arguably the Fed had given the market plenty of time to adjust to the taper and as such the market is not so far showing any adverse reaction.
Friday is the US Non-Farm Payroll decision which could further help the USD to claw back some ground. In the absence of any negative UK data GBPUSD looks set to remain above 1.60 for the time being.
Let us not forget where we are. Sterling continues to perform well holding ground against a range of currencies, now is a very good time to assess your position if you expect to require currency in the coming months. The interbank rate on GBPEUR is over 1.20 and GBPUSD is at 1.64. GBPAUD is at 1.84, GBPCAD is 1.74 and GBPZAR is 17.48. These are truly remarkable levels when you look at some of the lower rates of the last few years!
These currencies saw some of the biggest losses in 2013 and it would appear that slowly they are returning to more ‘normal’ levels following the financial crisis.
With the mining boom over and the Australian government actively seeking a weaker AUD, it would seem to me wise to sell the Aussie on dips in your favour. The same is true of the Rand which with gold and mining stocks suffering is under further pressure.
The New Zealand dollar could actually strengthen this year if we see an interest rate hike there, although the Bank of Canada are seeking looser monetary policy which should keep the Loonie on the back foot.
We are here to assist in the planning and execution of any international money transfers you need to make (including bringing funds back to the UK or Europe). Please feel free to contact me highlighting any situation or upcoming requirements to which I am sure I can offer some options, useful information and of course our award winning exchange rates.
Jonathan Watson, firstname.lastname@example.org
Or call (+44) 01494 787 478 and ask to speak with me Jonathan.
I wish all our readers a very healthy, happy and successful 2014!
UK GDP data this morning was as expected but has seen the pound lose ground against a host of currencies. Focus will now pass onto US GDP data this afternoon (13:30) with figures expected to show a strong improvement from 0.6% to 2.0%. Should levels be as expected and with the US showing positives sign of recovery Wednesday’s decision to taper QE could now gather more pace as we head into the New Year. This could lend support to the greenback and I would look for the value of currencies such as the AUD and NZD to weaken. For anyone looking at GBP/EUR watch out for Euro Zone consumer confidence at 15:00.
With the Christmas period fast approaching and thinner trading levels creating often significant shifts in the market make sure you are in a position to act on your trade. Our operating hours during the Christmas period will be as follows:
- 23rd December – normal operating hours 08:30 – 18:00
- 24th December – depending on trading levels office may close early
- 27th December – depending on trading levels office may close early
- 30th December – depending on trading levels office may close early
- 31st December – depending on trading levels office may close early
- 2nd January – normal operating hours 08:30 – 18:00
As you can see our office will be open to assist clients during the Christmas break so should be looking at a short term position and would like discuss the service we offer then please contact the office on 01494 787478 or email Mike at email@example.com
I would also like to take this opportunity to wish everyone a very happy Christmas and prosperous New Year.
Well folks it is that time of year when we reflect on the year so far and look to next year. As the site suggest we make forecasts and the forecast for sterling in 2014 would have to be positive. What are the possible pitfalls however and against which currencies will see the most gains? And what can you do to maximise your deals with this knowledge?
Watch the US – where is market sentiment?
The UK is leading the pack with the highest growth rates amongst European economies. The US is growing faster but their QE programme is without doubt fuelling these increases. At some point the US will have to turn off the QE taps and there will be a very strong market reaction not just on the US dollar but on the euro, pound almost every other currency.
Market Sentiment is a key determinant of the value of sterling. If investors are confident in the global economic outlook the pound should do well as the UK relies heavily on trade from overseas and the services sector which makes up a large part of our economy, relies on international trade.
The pound is likely to do well in 2014 as the global economic outlook improves and the UK recovery remains on track. Of course there are many pitfalls ahead and so the right type of contract is key. A forward contract is the perfect way to lock in your rate for the future without exposing yourself. If you are unsure about how this works or would like any information on the currency markets it really is worth your while speaking to us. Please feel free to speak to me Jonathan on firstname.lastname@example.org
Pitfalls, highs and lows
I expect the EU referendum and Eurozone debt crisis will be key factors that could affect sterling rates in 2014. The Aussie looks likely to be on the back foot as does the rand so I think sterling will push higher against these currencies. Whilst the early part of the year should see GBPUSD at similair levels, the prospect of QE tapering means GBPUSD should drop to the kind of levels we saw earlier this year. Although if you ask me we are a very long away away from the US economy being ready to give up its QE addiction.
I do hope you have found this information useful and look forward to hearing from you if you would like to learn more about our excellent rates, informative forecasts and friendly helpful service.
GBPZAR 5 year high, GBPAUD and GBPCAD 4 year highs, GBPUSD at 2 1/2 year high and GBPEUR over 1.20…
Sterling is at truly exceptional levels against most currencies as the UK’s recovery rakes hold and the UK sets itself apart from other leading economies by appearing to be likely to be one of the first leading economies to be raising interest rates. Whilst the United States are debating when to stop QE, the UK have not done any QE for the last year. The ECB are looking at possibly negative interest rates and the Bank of Canada is no longer looking to tighten policy. Overnight we learnt that GDP in Australia was weaker than expected, again a sign of another leading economy weakening whilst the UK has been performing well.
With the often crazy Christmas period fast approaching and changes in banking days there is a lot to be said for wrapping up a transfer like a present. The recent spike on exchanges rates has been a great gift to you and now could be an excellent time to either buy your currency or lock into a forward contract to minimise any losses. You can then remove the stress of the transfer and focus on the more important things at this time of year!
If you have a pending transfer we offer a specialist service to assist you in securing the most from the market. For more information at no cost or obligation please do feel free to get in touch. I am a specialist currency broker and my job is to assist private clients and businesses in managing their exposure to the currency markets, ensuring payments are made quickly and safely at the very best rates.
Please feel free to contact me Jonathan on email@example.com or call +44 1494 787 478 and ask to speak to me.
Sterling steady against the Euro and US dollar but shows strong gains against the AUD and NZD (Mike Vaughan)
Sterling has remained relatively flat against the Euro and clawed back early losses against the US dollar following worse than expected business confidence figures across the pond. In contrast the pound has continued its recent surge against the Aussie and Kiwi dollar, bringing prices against the AUD to the highest buy level in over 3 ½ years! With UK revised GDP data at 09:30 tomorrow expected to improve from 0.7% t0 0.8% this trend could continue during early morning trading.
Looking at the USD watch out for initial jobless claims at 13:30. With unemployment an area the FED have highlighted as needing to show an improvement, before they consider tapering QE, this data could give hints as to when, if at all, the FED will taper QE. For me it is inevitable the FED will continue with their stance on QE, the million dollar question is when. Once they eventually do then expect the greenback to fight back, but with cable at close to year highs and peaking at nearly 1.62 this afternoon – this sill represents good value when compared to the year low of 1.485 back in July.
As with the US dollar, the rates on GBP/AUD are likely to be heavily influenced by the FED. Again should they taper QE then I would expected AUD rates to fall heavily against all majors, as a result those buying AUD may still get more value from this market, although with GBP/AUD at the highest since June 2010 this is still a good opportunity. Anyone selling may wish to consider their options. Contact the office on 01494 787478 to discuss the various contrast we can offer. This may involve the use of a forward contract, allowing you to book rates in advance for a nominal deposit.
As with making any financial decision it is always best to get as much information about the product and the service on offer. As a specialist execution only currency broker we pride ourselves on our efficient, client friendly service and most importantly our price. When using a broker rates can be significantly better than high street banks and other financial institutions. To find out more about the service please contact 01494 787478 or email me with a brief overview of your particular requirement and I will happily provide further insight into current market conditions and the contract that may work best for you. Email Mike on firstname.lastname@example.org
FOMC minutes have created some big shifts on the currency markets. GBP/USD, GBP/EUR, GBP/AUD and NZD exchange rate forecast (Mike Vaughan)
Sterling has been running through a particularly volatile time of late posting strong gains against the single currency since the surprise interest rate cut of last week and pushing rates to a 10 month high. Levels are still some 2.2% better than the end of October. Worryingly each time the pound looks like it will have a sustained period of strength and breach the 1.20 level the Euro fights back, should this trend continue then the current prices must represent value.
Looking at GBP/USD – rates pushed past 1.61 yesterday following dovish tones from Ben Bernanke suggesting interest rates will remain near zero, even should unemployment fall to 6.5%. However following yesterday’s FOMC minutes, Bernanke again announced that the tapering of QE is still certainly on the FED’s mind suggesting it could happen within the next couple of months. As a result the USD shifted back into the 1.60s and we have seen a big shift for the pound against currencies such as the AUD and NZD.
Since the end of October the pound has gained in excess of 3.2% against the NZD and 4% against the AUD. As mentioned the tapering of QE is likely to drive the value of the Aussie and Kiwi down further as it reduces the amount of international money supply and with yields in Australia and New Zealand far more attractive than many other countries, a fall in money is likely to hamper these particular currencies more so than say the Euro or Pound. This combined with the fact the RBA is interested in devaluing the Australian dollar to improve its competitiveness (in fact RBA Chairman Stevens just this morning said he was open minded on intervention to weaken the AUD) suggests AUD and NZD buyers should get more value. Sellers on the other hand should consider their options.
Should you have an upcoming bank to bank money exchange to arrange and you would like to discuss the currency service we provide then please contact the office on 01494 787478 or email Mike at email@example.com