Tag Archives: pound

Are you placing too high an expectation on sterling exchange rates rising?

So today the unexpected happened and two members of the MPC (Monetary Policy Committee) Martin Weale and Ian McCafferty both voted to raise interest rates citing improvements in the economy and expectations wage growth could soon rise in line with inflation which has been falling. The effects were immediate and sterling spiked up reaching a peak of 1.2546 (GBPEUR) and 1.6679 (GBUSD) offering relief to anyone buying a foreign currency with the pound. The gains were quickly undone however with sterling finishing the day only about 0.1% above the opening on most pairings.

I think this highlights the danger in banking on big improvements in sterling exchange rates in the future. Here we have had the first split vote since 2011 at 7-2 and the effects were rather timid and failed to help lift sterling to the lofty heights we enjoyed a few weeks ago. I think if you need to buy a foreign currency with sterling making some plans now is a wise move since it is difficult to see where any further major boost will emanate from.

Tomorrow are Retail figures plus Government Borrowing data which may all serve to help lift the pound. Both releases were actually negative for sterling last month so if you are in a position to be holding sterling waiting to buy another currency, moving sooner might be the best course of action. To help catch the very best rates we offer STOP LOSS and LIMIT orders which trigger when certain levels are hit. This is often the only way to catch the best rates since the market can move so quickly!

For more information on what is the best approach to your currency situation please contact me Jonathan on jmw@currencies.co.uk. I have been working as a currency broker for 5 years and have lots of experience in the planning and execution of international payments. I look forward to hearing from you.

Jonathan

 

Sterling falls following UK inflation data (Mike Vaughan)

Sterling has taken another hit today against most major currencies following a fall in the headline inflation rate and taking pressure of the Bank of England to raise interest rates. As a result the pound fell back below 1.25 against the Euro and is now trading at its lowest level against the US dollar since April.

This data comes ahead of tomorrow’s key Bank of England minutes released at 09:30 and another release that may cause the value of sterling to fall. This report will indicate as to how the nine members of the monetary policy committee voted in relation to interest rates and will also give potential clues as to what other monetary policies the central bank may have in store. For me it is likely that the split will have been 9-0 in favour of keeping the UK’s base rate at 0.5% but any surprise results and the pound will be set for another volatile day tomorrow.

Will the pound continue to fall?

For me the pound is likely to remain on the back foot against the US dollar, however I still feel with the continuing threat of deflation in the Euro Zone, the pound will find support and return back to the levels seen in July – for this reason I would suggest the current moves represent a good opportunity if you are selling Euros.

Looking at data to watch out for and tomorrow will also see the release of euro zone construction figures at 10:00 and the FOMC minutes at 19:00. This is the US version of the Bank of England minutes and can cause a shift in dollar exchange rates dependent on the tone of the report.

To get more information regarding the currency service we provide please contact the office on +44 (0)1494 787474 or email Mike at mgv@currencies.co.uk

Pound Sterling Forecast – Economic data out the first few days this week and how it may move exchange rates (Daniel Wright)

A very slow start to the week for Sterling today with very little economic data or news for the markets to move off.

This will more than likely be the calm before the storm this week though as there is plenty of data for investors and speculators alike to get their teeth into which will no doubt cause quite a lot of volatility for most major currencies.

Tonight - Overnight we see the RBA (Reserve Bank of Australia) meeting minutes and the RBNZ (Reserve Bank of New Zealand) inflation expectations, out at 02:30am and 04:00am respecively. RBA Governor Stevens has seemingly turned a corner lately with his comments on the strength of the Australian Dollar and appears to be a little happier with the way things are going, leading to the Australian Dollar gaining some strength back against the Pound and knocking the GBP/AUD rate back below 1.80. Stevens is also due to speak on 00:30 Tuesday night as well.

Tomorrow – Tomorrow morning we see a key inflation release from the U.K which could easily lead to a bumpy ride for Sterling followers during the course of tomorrow morning. Inflation had beejn at 1.9% which is just about below the Government target of 2% so any minor alterations to this, especailly to the upside could give the Pound a morning boost, as one way to lower would be to raise interest rates, so a figure of 2% or above may lead to a little speculation of a rate hike coming a little closer. Of course, comments from the Governor of the Bank of England last week may well cut this potential out.

Later in the day it is the turn of the States for their inflation data, interstingly also expected to come out at 1.9% so if you have an interest in the Dollar be sure to keep a watchful eye on the market shortly after 13:30pm – Or why not email me on djw@currencies.co.uk and I can monitor things on your behalf.

Wednesday – Wednesday morning we have the Bank of  England minutes from the last BOE interest rate decision. No major expectations from this one however it does really have the potential to throw up a surprise or two and news that any of the 9 members of the Bank of England now are voting in favour of an interest rate hike may give also Sterling a shift up in the right direction.

Later in the evening we have the FOMC (Federal Open Market Commitee) minutes, again very similar to the BOE minutes seen a little earlier on this will show how the Fed voted in terms of rate movements and what they discussed at the last interest rate decision, last time around we saw one memebr of the Fed vote in favour of a rate hike which did give the Dollar a little boost.

If you have a currency transfer to carry out and you want to achieve the very best rates of exchange either for your company or a personal transaction, along with highly valuable market knowledge then why not contact me (Daniel Wright) by email on djw@currencies.co.uk with a brief description of what you are looking to do and a contact number and I will be more than happy to assist you personally.

Even if you currently use another broker you may be surprised at how much you can save by getting in touch as a small improvement on an exchange rate can make a big difference to you.

I look forward to hearing from you.

 

 

UK GDP as expected, where to focus now? (Mike Vaughan)

This mornings revised GDP figures were as expected coming in at 0.8% and causing little reaction for the pound, something that is also likely to be seen with the Euro due to the European bank holiday. Lately the Euro has reached a near one month high against the pound having shifted back nearly two cents since the lows seen in July creating, in my opinion, a good opportunity for anyone selling Euros.

Looking at the US dollar and recently the greenback has had somewhat of a resurgence against the pound having rallied 3% since mid July. For me this is a trend that could well continue.

With the prospect of an interest rate hike in the UK this year highly unlikely and some of the data sets in the UK starting to slow, the pound is now on the back foot. To compound this the data from the US is improving and with the end of the FED’s tapering of QE in sight (last taper scheduled for October) I believe rumours will begin to circulate regarding when the FED may raise interest rates and it is this speculation that for me will drive the dollar (in the same way that it lent support to sterling earlier this year). For this reason should you be buying dollars you may wish to assess your position now.

Should you be selling AUD then the current shift of three cents may represent a good return. Levels are trading at a three month high for AUD/GBP and with the RBA minutes released overnight Tuesday next week, then these levels may not hang around too long. Any hint towards an interest rate cut by the RBA and the current AUD strength could be evaporated very quickly. Also looking at the recent trend between this pair and I would expect a correction back towards 1.80 soon.

To get more insight into the currency service we provide and to discuss the various contract types we can offer then please get in touch. With access to commercial rates of exchange we aim to undercut any other financial institution and save our clients money. Please email me with a brief overview of your particular requirement and  see how our service can help you. Please email Mike at mgv@currencies.co.uk

Sterling suffers following Mark Carney’s comments – Pound weakness against all majors (Daniel Wright)

Sterling has had a fairly bad couple of days following reasonably negative comments from the Governor of the Bank of England Mark Carney during the BOE inflation report.

Carneys comments included the fact that he felt the strong Pound was creating a headwind for exports and becoming damaging and that there was a “heightened uncertainty” about slack in the economy.

Mark Carney also declined to comment on the precise timing of an interest rate hike and that there  is no numerical threshold for wage growth that will trigger a rise in interest rates.

This all followed news earlier on in the morning that average earnings had dropped off a little which is bad news for the U.K economy and may well hold back a rate hike.

Apart from a number of other factors, one of the key elements to contribute towards the U.K hiking interest rates and the Pound possibly starting to see good strength off the back of this is wage inflation keeping in line or above general inflation. If the figure stays below then even if people are earning slightly more, the price of goods and services is actually going up at a faster pace therefore they are actually worse off and a rate hike would not be particularly helpful.

This all is a little concerning for anyone looking to buy foreign currency with the Pound for either their company, to purchase an overseas property or indeed for any other reason they may need to send money overseas. The recent rise in the value of Sterling had generally been surrounding both good solid economic data along with growing speculation of an interest rate hike coming closer and with data dropping off a little and the Governor of the Bank of England not being so positive then the Pound could have a grey cloud over it again for a little.

For those who don’t know an interest rate hike is generally seen as positive for the currency concerned and a cut in rates can be negative and with the market moving on speculation as well as fact you can see quite large movements on any comments such as we heard this morning.

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 (Daniel Wright) directly on djw@currencies.co.uk with a contact number and an overview of what your requirements are and I will be more than happy to get in touch personally to explain how I may be able to assist you.

Tomorrow is the most important day for the pound so far this month

Tomorrow is a vital day for sterling exchange rates. 

We expect a further decline in the Unemployment rate , sterling may find a lift on the back of continued improvement in the number of people in work. Also released at this time is the Claimant count which measures the number of people claiming Jobseekers Allowance. Changes in the rates of Earning and Wage growth is bound to attract attention too since concerns remains about the extent to which improvements in the economy are being reflected in better wages for workers. There is fair scope for sterling strength and weakness therefore as the different elements of the ‘Unemployment’ data are released.

To really maximise this event you might want to put a ‘Limit’ or Stop Loss order into the market, this guarantees your rate once the price is hit. With such quick turns on the exchange rate this is the best way to maximise your transaction. Have you made provisions for volatility today? Are you concerned that your bank or broker might not quite be getting you the ‘best deal?’. Email me Jonathan on jmw@currencies.co.uk and let me see if I can help out.

Key Data for Wednesday – Bank of England Quarterly Inflation Report 10.30 am. Once the labour data has hit home there is a only a small window within which to assess the situation before the Bank of England report of key economic topics and we have a speech by Mark Carney. Sterling has soared this summer on expectations the Bank will raise the interest rate sooner than expected but I feel too much has been placed on these comments. Sterling strength might be good if you are buying a new home in France or paying Invoices from Germany but it has a detrimental effect on UK business as they lose their competitive advantage. Lately many UK business have grabbed headlines bemoaning the strong pound and the millions wiped off in profits. I will be watching for any comments on the detrimental effects of a strong pound, the recent worse data for the UK – lower GDP plus a declining rate of growth in the Industrial and Manufacturing sectors all points to slightly worse prospects for the UK economy up ahead and therefore a slightly weaker pound.

Thursday will see Euro data take stage – Important if you are tracking GBPEUR. At 08.00 am German GDP is released which will be very interesting since German Industrial Output posted a shock fall last month. The famous German ZEW survey today showed investor sentiment at a 20 month low for Eurozone’s biggest economy. With Inflation and Growth concerns rife the data at 10.00 am – Eurozone GDP and Eurozone Inflation all become very significant in determining just where rates will head.

Last year GBPEUR dropped to 1.14 and GBPUSD 1.48. On both currency pairing and pretty much all other sterling rates we are around 10% higher than last year. There are never any guarantees on the market but tomorrow’s data looks like it could easily affect current levels, what do you need to do?

If you need to make an exchange understanding what moves the market is key to getting the best deal. We offer a personal, proactive service to help you get the most from the market as well as offer an award winning exchange rate when you do trade. To compare notes or run through all of your options please feel free to contact me Jonathan Watson directly using jmw@currencies.co.uk

 

 

 

Interest rates dictate the movements for the pound and Euro in the UK and Eurozone. (Ben Amrany)

On a day where there was an outside chance of the Bank of England hiking interest rates the pound was left very much disappointed with no movement by the Governor of the Bank of England which left the pound hovering around 1.26 against the Euro and 1.6820 versus the US Dollar.

For those buying or selling Euros the main spotlight for the day was firmly on the European Central Bank (ECB) who also  released their latest interest rate for the month of August. We were expecting more of a chance of policy change from the ECB after two months ago they announced unprecedented monetary easing which assisted the pound in gaining to the highs of 1.2699. The ECB stated they were not making any change to policy and may look at things next month should inflation not start to rise so it may be another month before a further push for the pound occurs.

Even if this does happen though the IMF (International Monetary Fund) recently stated that they felt the pound is a good 10% overvalued and if the Bank of England feel the same we could see a rate hike be put off until next year as it may strengthen sterling further if it happened to soon.

 

As we head into the last day of the week tomorrow the UK trade balance figures could weigh on the pound should our trade balance not fall as much as expected.  We still feel that GBP/EUR will be range bound from a low of 1.25 to 1.2650 and GBP/USD  from 1.6750 to 1.69 for the next week or two.

If you are looking at making an  exchange to buy any of the major currencies we can help you make a saving n your exchange by up to 4% over the high street banks. I offer a very personal service to give you the information needed to help you decide when to buy. If you feel that you would like to compare our rates then please do feel free to contact myself Ben Amrany at bma@currencies.co.uk

 

Busy week for the pound. How to get the best deal on your foreign exchange? (Mike Vaughan)

GBP/EUR

Over the past 12 months we have seen the UK economy start to stabilise after a long period of stagnation and weak growth forecasts. This in turn has given analysts reason to believe the Bank of England will raise interest rates, something that has lent support to sterling over the past few months. I still believe it is too early for the UK to raise the base rate and it is unlikely we will see anything from the central bank until at least the first quarter of 2015, this combined with a slight slowdown in recent UK data (retail sales, construction figures) could mean the pound will stabilise. Remember we are still some 11 cents better than levels in 2013………………

Whilst Eurozone productivity continues to remain unbalanced, we will find that UK exports are negatively affected and this of course could hinder our own recovery moving forward. We also need to consider that the Bank of England (BoE) will be wary about the Pound gaining too much strength, for fear of alienating our main trading partners (Eurozone) even further.

**Anyone with a GBP/EUR requirement should be keeping a close eye on the release of tomorrow’s UK’s construction and industrial production figures at 09:30 and Thursday’s Bank of England and ECB interest rate meeting at 12:00 and 12:45 respectively – all of which are likely to be key market movers**

GBP/USD

Cable rates pushed close to a five year high in July reaching above 1.72 and creating some fantastic buy opportunities. In the past few weeks however there has been a real shift with the greenback having gained just shy of 4 cents. Much of this can be attributed to the slightly softer UK data of late combined with improving sentiment from across the pond. A key area the FED have been focusing on has been the jobs market and with last week’s non-farm payroll data showing another good improvement this could be the shift the dollar needs.

As mentioned above a major reason the pound has strengthened has been due to interest rate speculation and this same scenario could now lend support to the dollar. Earlier this year the FED hinted that they may consider raising interest rates 6 months after the end of their bond buying stimulus program. The end of the US tapering and the final reduction of £15bn is scheduled for October and following this it is likely the focus will turn to when the FED may decide to raise interest rates.

Key market mover this week: US Trade Balance figures Wednesday at 13:30 and Thursday’s initial jobless claims at 13:30

Australian Dollar

The current GBP/AUD see-saw is continuing with neither currency looking to take a strong foothold over the other. Looking back since March and the market has traded a relatively small range between 1.79-1.83.

Overnight the Reserve Bank of Australia (RBA) held interest rates at 2.5% as expected. In the accompanying statement the RBA governor Glenn Stevens pointed to a period of stability with interest rates and moved away from the idea of a cut later this year, pushing rates close to the 1.80 level this morning. For me the period of stability between these two is likely to continue and any shift towards the higher range should be seen as an opportunity for AUD buyers.

Look out for the RBA monetary statement overnight on Friday

To get more information on the currency service we provide please contact the office on 01494 787478 or email Mike at mgv@currencies.co.uk

 

Pound Sterling Forecast – Australian Interest rate decision tonight and a flurry of U.K data tomorrow and Wednesday (Daniel Wright)

An interesting night overnight for those following Australian Dollar exchange rates as we have the Australian interest rate decision along with the rate statement shortly after.

RBA Governor Stevens seems to be constantly changing his mind about the strength of the Australian Dollar being negative for the economy or not so this release could quite easily cause quite a bit of overnight movement depending on what he now says, it is doubtful we will have any change in interest rates but the statement for future policy may be key.

Tomorrow morning there is plenty of European services data throughout early morning trading, followed by Markit Services data for the U.K at 09:30am. For anyone with an interest in New Zealand Dollars employment figures for New Zealand are also out at 23:45pm.

Wednesday morning brings an important start to the day for the U.K with Industrial and Manufacturing production data coming out at 09:30am which will be a key indicator as to how the economy performed throughout July and can lead to quite a bit of market movement.

Later in the day we have the NIESR (National Institute of Social and Economic Research) GDP Estimate. This can also be quite a large market mover as the NIESR are usually fairly close with their predictions.

We also have interest rate decisions on Thursday for both the Bank of England and European Central Bank, we will cover this further later in the week.

If you are looking to carry out a currency transfer either during the week or in the coming months then it would be well worth you getting in touch with me directly.

The brokerage I work for offers award winning rates of exchange and great level of customer service, you would deal with me personally from start to finish too so I will be happy to keep you up to date with the very latest market movements. You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you are looking to do and a contact number and I will be more than happy to help you.

Sterling creeps down following poor manufacturing figures – Non-Farm payroll and unemployment data for the States brings no surprises (Daniel Wright)

Sterling has had a fairly poor end to the week, generally losing ground against most major currencies.

Poor manufacturing figures today were the main reason for the drop for the Pound as a whole, and with U.S news throughout the week being fairly positive the Dollar has made a major charge back against all majors itself.

I had predicted at the start of the week in an earlier post that I felt this could be a good week for the Dollar and it certainly delivered, gaining a few cents back over the course of the week  if you would like to read it again then feel free to click here.

This just goes to show how valuable having a proactive currency broker on your side can be. I have thousands of both private and corporate clients and would be more than happy to welcome any regular readers as well.

If you feel I could help you both in terms of getting you a highly competitive exchange rate and a supremely efficient service.

Feel free to email me (Daniel Wright) on djw@currencies.co.uk with a brief description of your requirements and I will be more than happy to contact you to explain how I will be able to help.

 

 

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