Tag Archives: pound

Will sterling keep up this current trajectory?

Tomorrow is UK Retail Sales and Friday is the latest UK GDP (Gross Domestic Product) data. Both of these releases could easily spark volatility in the market underlining the importance of keeping up to date with the market. In the last few weeks sterling exchange rates have crept up notably against the Euro but we are at multi year highs against pretty much everything! Can sterling keep on this trajectory?

Well early indications seem to think so with recent poor borrowing economic data being ignored in anticipation of an interest rate at hike at some point in the future. As is so often the case with exchange rate it isn’t just which currency is the best, it is that others are very unpopular! Take the Euro for example, we may still see some QE (Quantitative Easing) in the future. This form of ‘printing money’ is very bad for the currency as by increasing the money supply it effectively dilutes the strength of the currency. The UK used QE many years ago and this is one of the reasons the pound dipped to almost parity with the Euro, imagine the detrimental effect QE in the Eurozone would have on GBPEUR rates!

If you have any need to buy large volumes of foreign exchange getting the best exchange rate is central to making the most of your money. The authors of this blog and I are extremely confident we can undercut other sources like banks and other currency brokers on exchange rates, plus also offer practical assistance in the timing and management of your payments. For a quick rundown of your situation and a comparison why not make contact? We can then have a quick chat at no cost or obligation and you can decide for yourself what is better! After all if you were entirely happy with your current situation you probably wouldn’t have read this far!

Jonathan Watson, jmw@currencies.co.uk

Sterling exchange rates may be in for a volatile few days to end off the week? (Daniel Wright)

Important Economic data still to come out this week

Following a very quiet start to the week for the Pound here are a few key pieces of economic data due out over the coming few days that may affect the value of Sterling against these major currencies.

The two key days for me may be the Bank of England meeting minutes tomorrow morning at 09:30am followed by BOE Governor Mark Carney speaking in the early afternoon and U.K GDP (Gross Domestic Product) data due on Friday, also at 09:30am.

We are currently still very close to a two year high against the Euro and a nearly at a six year high against the Dollar so trading levels are still extremely attractive for anyone looking to buy either of these two currencies.

Last night we had Governor of the RBA Glenn Stevens speak and he has now once again spoken and confirmed that he is happy with the current monetary policy in Australia, seemingly changing his view that the AUD is too strong and giving the Australian Dollar some early morning strength.

Today – Reasonably quiet for economic data today with the main focus being on U.S inflation data which is due out at 13:30pm this afternoon. As with most U.S data this can have an effect on all major currencies as it does affect global attitude to risk.

Wednesday – Inflation data also starts the day off tomorrow with Australian having their turn this time. Australian inflation data is due out at 02:30am so could be an overnight market mover so if you have a requirement to buy or sell Australian Dollars in the near future it may be prudent to place a limit order or stop loss to either take advantage of a short spike or protect yourself from adverse market movement. Contact me for more details on how these options work.

Tomorrow morning does has the potential to be a big market mover although it has not been led to too much market volatility over the last few months. We have the Bank of England minutes out for the U.K which are from the last interest rate decision. The key will be if any members of the Bank of England have started voting in favour of an interest rate hike, for a long time now the vote has been all nine members of the monetary policy committee in favour of no change but with all the talk of interest rate changes coming closer will anyone have changed their mind?

In early afternoon Governor of the Bank of England Mark Carney speaks at 12:24pm so be very aware that investors will be hanging off of his every word so Wednesday for me has real potential to be the most volatile of the week.

For those tracking the New Zealand Dollar we have the RBNZ Interest rate decision out at 22:00pm and a small hike in interest rates is expected, if this happens be cautious of a little NZD strength overnight, if they do not hike as expected then we could see the Pound gain a little back. Again a stop loss or limit order overnight may be a sensible approach.

Thursday  Thursday morning is fairly busy once again with a flurry of services and manufacturing data out for Europe throughout the morning from 8:00am until 9:00am followed by U.K Retail Sales data at 09:30am. Expectations are for a small rise in Retail Sales but as you are all aware these releases don’t always come out as expected.

Friday Once again 09:30am is the key for those following Sterling exchange rates as we have GDP (Gross Domestic Product) data out for the U.K at this time. GDP measures the amount the economy has grown or shrunk within a specific period of time. This can be one of the most important releases of the month an again expectations are for a minor increase year on year but no revision to quarter 2.

All in all a fairly busy few days, so if you have a currency transfer to carry out involving any major currency it is well worth making me aware of it or giving me a call so I can notify you of any large market movements or so that you can secure these fantastic exchange rates so that the market does not have a chance to drop back away again if data is not too great.

If you have a requirement in the future but you do not yet have the full availability of funds you can book out a forward contract. This is where you can book a rate out for up to a year in advance with just a small deposit, removing the risk of the currency market making your purchase any more expensive in the future.

This is ideal if you are in the process of buying a property overseas as you can know exactly how much the property is going to cost you today and eliminate the risk of the Pound dropping away again and missing out on this great opportunity.

I look forward to speaking with you if you have any questions or queries or you would like to book out a rate of exchange. You can email me directly on djw@currencies.co.uk and I will be more than happy to assist you.

 

 

Tomorrows Bank of England minutes and Mark Carney’s speech the next focus for the pound (Mike Vaughan)

Sterling has had a positive day against the Euro but lost ground against the dollar pushing slightly closer to the 1.70 level. This all comes ahead of a very busy day tomorrow with the Bank of England minutes scheduled for release at 09:30 following by a speech from Bank of England Governor Mark Carney at 12:45.

In the minutes the split of the nine members within the monetary policy committee will be shown. My expectation is for a 9-0 split in favour of holding the UK’s base rate at 0.5% and as a result I would not expect any significant movement for sterling exchange rates following the release. However anyone buying Euros or US dollars may wish to hold as if the split was to show a member voted for a rate hike then sterling may have a strong showing in the morning session.

Following the minutes Mark Carney will then hold a press conference. In recent months Carney has always shown a positive tone lending support to the pound, however should he dampen the markets expectation for an interest rate hike the pound could easily fall as a result. With the speech scheduled fro 12:45 keep on your toes as this is bound to be a volatile period for sterling.

Should you have an upcoming money transfer to arrange and would like to be kept up to date with the current market trends and how we can save you on your money transfers, then please contact the office on 01494 787478. Alternatively email me with a brief overview of your currency exposure and I will happily run through the various contract types we can offer. Email Mike at mgv@currencies.co.uk

Will the pounds positive trend continue? (Mike Vaughan)

Sterling has started he day on a relatively quiet note with the only notable shift being against the Australian Dollar having lost nearly 1 cent between the high and low. Today is a quiet day in terms of any data and I would expect the pound to remain relatively stable against most majors.

Following yesterdays suspected shooting down of a Malaysian airline it is difficult to predict the impact this may have on the markets and may create some volatility as the events surrounding the tragedy unfold. Keep in contact with your broker for updates on the market.

Looking ahead and the main focus for me will be the Bank of England minutes scheduled for release on Wednesday next week. The report will give insight as to how the nine members of the MPC voted in relation to interest rates and will also give clues as to future monetary policy. What the market is looking for is clues as to when the bank is likely to raise interest rates with some analysts forecasting a rate hike during Q4 of this year. For me I still believe the bank will wait until 2015, but it is this speculation that has pushed the pound to a near two year high against the Euro and a six year high against the US dollar. For me I believe this trend is likely to continue and I would expect more value from the pound in the coming weeks.

To get further information on the currency service we provide and for assistance with your currency transfer then please contact the office on 01494 787478 or email Mike at mgv@currencies.co.uk

 

Sterling has another positive day against most majors (Daniel Wright) Why did inflation data lead to Sterling strength?

The Pound has had a fairly good day on the market once again with a further small improvement against the Euro pushing the GBP/EUR exchange rate extremely close to a two year high which makes it an extremely tempting time to secure Euros for the purchase of property overseas or indeed for any business requirements.

I have had many clients this week decide to lock into their exchange rate on a forward contract to make sure they do not miss out on this current spike should the Pound drop away again and it is indeed turning into a very prudent approach, as many of those clients agreed to buy their property in Europe when the rates were a lot worse.

As an example, if you were buying €120,000 three weeks ago it would have cost you roughly £3,000  less now – This could pay for you to start furnishing your new holiday home or indeed pay for flights over there and back ten times over! To lock into a rate of exchange you only need to have a small deposit available so you do not even need the full availability of funds and you can lock in your rate for anything up to a year – Feel free to email me directly on djw@currencies.co.uk for more information on how to take full advantage of this handy contract type and I will be happy to answer any questions or queries you may have, along with helping you book something out if you wish.

The reason we saw the main spike yesterday was all due to a climb in inflation. A way to combat high inflation is to raise interest rates and generally a hike in interest rates can be seen as positive to the currency concerned. With the markets moving on rumour as well as fact this high inflation level did spark investors to believe that rates may go up earlier than first thought.

Today we saw unemployment figures improve a little for the U.K to 6.5% however this was pretty much cancelled out by the fact that wage growth was a little worse than expectations  and the Bank of England have also stated they need to see wage growth out weight inflation for a period of time before they feel that the recovery is on top form and they really can start to move interest rates up so this was a minor setback.

We do not have a huge amount left to come out this week for the U.K however one release to watch out for, for anyone following the Euro we do have European inflation data out at 10:00am.

If you have an upcoming transfer to carry out and want to get the best exchange rates along with great customer service and knowledge of the markets then email me (Daniel Wright) directly on djw@currencies.co.uk  I welcome all contact for bank to bank transfers however I am afraid I cannot help with cash transactions or speculation.

How much higher can sterling go? Important upcoming events for the pound!

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 jmw@currencies.co.uk or call 01494 787 478.

Weaker manufacturing and industrial production data hurts the pound (Mike Vaughan)

This mornings weaker manufacturing and industrial production data caused a drop off in sterling value pushing GBP/EUR below 1.26 and GBP/USD briefly below 1.71. This data follows on from poor industrial production data from Germany yesterday, is this a trend that is set to continue from the developed economies? For me this is likely to be a short term blip for sterling and halts the run of recent positive data, indeed it is still worth noting that although levels were not as forecast, they were still much better than that released by Germany indicating to me that the period of sterling strength is set to continue, particularly with the prospect of an interest rate rise in the UK within the next 6-12 months.

Looking ahead to the data for the rest of this week and  tomorrow is relatively quiet from the UK and Euro zone with focus on the release of the US FOMC minutes from its latest interest rate meeting. This is scheduled for release at 19:00.

Heading into Thursday and overnight will see the Australian unemployment figures which are forecast to rise from 5.8% to 5.9% and is likely to keep pressure on the Aussie as a result. Thursday will also see the Bank of England releasing its latest interest rate decision at 12:00. Is likely to be a bit of a non-event with rates almost certain to stay at 0.5% but sill one to watch.

Prior to the decision from the Bank of England, the European Central Bank will release its latest monthly report that contains a detailed analysis of the prevailing economic situation and the risks to price stability within the Euro zone. Look for any clues as to future monetary policy at its scheduled release of 09:00.

To finish the week on Friday Canada will announce its latest unemployment data at 13:30. Forecast to remain at 7% and unlikely to impact the loonie too much.

As you can see there is plenty of data out for the rest of the week. To get further insight into the impact these might have on the pound and other majors then please contact the office on 01494 787478. Alternatively email me with an overview of your particular currency requirement and I will happily run through the full currency service we can provide. Email Mike at mgv@currencies.co.uk

Pound makes gains against most majors following ECB press conference (Daniel Wright)

The Pound had another good day on the markets today even with slightly worse than expected Service sector data released this morning.

The main market mover of the day  was during the European Central Bank press conference held by Mario Draghi this afternoon.

Draghi announced that he would not be ruling out the possibility of QE (Quantitative Easing) in the future should the assessment of inflation change in the near future.

For those of you that are not aware QE is basically printing more money and injecting it into the economy through the purchases of gilts and bonds and has been used by the U.S and U.K to seemingly positive effect. generally with even the mere mention of QE you do tend to see a currency get a little weaker and we hit a fresh 21 month high to buy Euros this afternoon.

Following also seeing this news it also put Sterling back to the top of the triangle between Sterling, Dollar and Euro and the Pound appeared to gain against almost all major currencies making them cheaper to buy.

Terrible Retail Sales figures overnight from Australia also led to Australian Dollar weakness so we have seen a good spike in favour of anyone looking to buy Australian Dollars in the near future.

If you have an upcoming transfer to carry out and want to get the best exchange rates along with great customer service and knowledge of the markets then email me directly on djw@currencies.co.uk  I welcome all enquiries for bank to bank transfers however i’m afraid I cannot help with cash transactions or speculation.

Sterling given a further boost following positive UK construction figures (Mike Vaughan)

Sterling was given a further boost this morning pushing through 1.255 against the Euro and 1.7150 against the US dollar following positive PMI construction figures this morning. This data concludes much of the data for the pound this week with the focus heading towards the Euro tomorrow with the ECB interest rate decision and press conference from Mario Draghi. Following the cut in its base rate last month it is highly unlikely anything will happen therefore the 12:45 release is likely to be a non-event and bringing into focus Draghi’s press conference scheduled for 13:30. This will give clues to future monetary policy and the ECB’s projections over the course of the next few months.

Looking across the pond and this afternoon Janet Yellen the head of the Federal Reserve will be speaking later this afternoon ahead of tomorrow’s key non-farm payroll employment figures which can often cause large shifts in the dollar due to the unpredictability of the release. Expectation is for an increase of 217k jobs and will be the last data release from the US due to Independence day on Friday.

WIth the recent run for the pound we are seeing some fantastic buy opportunities for the US dollar and Euro. Should you wish to receive a further insight into the currency service we can provide then please contact the office on 01494 787478 and let us show what saving we can make you when compared to your current provider. You can also email me (Mike) at mgv@currencies.co.uk

 

 

Pound Sterling exchange rates creep up following solid manufacturing figures (Daniel Wright)

The Pound had a good morning against most major currencies following slightly better than expected Manufacturing data released by the U.K.

Expectations had been for a minor drop in PMI Manufacturing data but we actually saw a small increase which in turn gave Sterling a small boost.

We also saw European unemployment figures show a minor improvement at 11.6% instead of the projected 11.7% which potentially held back further gains against the Euro (although this is still not great).

Tomorrow morning we will see growth figures for Europe as a whole so that is the next big Euro based data release to look out for. Most heads however will be turned towards the ECB (European Central Bank) interest rate decision and press conference released on Thursday at 12:45pm and 13:30pm respectively.

For anyone with an interest outside the Euro beware that Non Farm Payroll data in the States is also released on Thursday at 13:30pm (A day earlier due to independence day).

Non-Farm Payroll data is essentially the number of people in Non-agricultural employment over in the States and is a key indication as to how their economy is performing.

This release can cause quite a lot of volatility because predictions are made in advance and these can be wildly out. The market moves on rumours and predictions as well as fact, and should the figure come out quite a way from initial predictions the market does correct itself rather swiftly.The reason this effects the AUD, NZD and ZAR and pretty much most majors is because as I am sure you can imagine it will affect attitude to risk and will lead to rapid movements of large amounts of money globally.

If you have an upcoming transfer to carry out and want to get the best exchange rates along with great customer service and knowledge of the markets then email me directly on djw@currencies.co.uk  I welcome all enquiries for bank to bank transfers however i’m afraid I cannot help with cash transactions or speculation.

 

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