Tag Archives: pound
My previous post from the initial release of the Bank of England interest rate decision and minutes from their latest meeting noted that Sterling weakened against most major currencies at the beginning of the afternoon. This was due to the overwhelming consensus to keep interest rates on hold. What compounded this was the minutes from the meeting which painted a bleak outlook for the UK’s future timeline for raising rates as well.
It wasn’t a negative view of the UK economy as such. Concerns were made about inflation, with core inflation not expected to even hit half of by the BoE’s target rate of 2% by spring 2016, as well as the struggling construction and manufacturing sectors. But employment is still at fantastic levels, with our 5.4% rate of unemployment much better than the historical average of 7.22% since the 70’s, and growth expected to be 2.4% GDP for 2015.
But currency value isn’t simply a reflection of the current state of the economy. It’s about net flows of currency and there seems to be little on the horizon to make Sterling more attractive to purchase.
The minutes from the meeting highlighted that the UK economy is almost at ‘capacity’. This suggests that while positive data will continue to come in, there will be no gains to bolster confidence in the currency in question. For example employment figures may still be high but without the headline news of a fall in the actual unemployment rate itself it is unlikely that Sterling will shine on the markets in the short-term for October.
Furthermore, the continuing concerns about China and global slowdowns were expressed in the report. This has likely delayed the timeline for the UK to raise interest rates further, as this continuation of concern from the last report shows that this will be an ongoing brake for the BoE’s plans to change financial policy.
The only reason Sterling didn’t fall further today, was due to minutes released from the European Central Bank’s latest meeting which showed similar concerns. Which is why the afternoon slide on GBP/EUR halted at 1.356 from highs of 1.363.
With these long-term concerns I believe that the current market presents some excellent opportunities to use Sterling as a buying currency compared to where rates may be by next month.
I strongly recommend that anyone with Euros to buy should contact me overnight on firstname.lastname@example.org to receive a competitive quote on any planned transfers, and my advice on how to strategize any imminent or future transfers. Those concerned about where rates are going should know that these levels can be fixed to avoid further movements in your favour. Unfortunately Sterling’s sustained slide over the past few months isn’t showing signs of abating. 01494 787 478
Once again the Bank of England seems to be treading water with absolutely no change in the voting pattern for an interest rate hike, with still 8-1 against the decision, way off the majority necessary for a change in financial policy.
Markets are scrutinizing the minutes closely, and while this is being digested, Sterling is steadily weakening on the markets. I will write a full overview later on this afternoon for a new 4-week prospect for Sterling, but so far from what I am reading those looking to be using Sterling as a purchasing currency will likely be facing further Sterling weakness moving forward due to apprehensive tones in the BoE meeting minutes.
A cursory observation suggests that anyone with Euros, USD, or AUD to purchase should be looking to move sooner rather than later considering the emerging trends this afternoon.
Feel free to contact me on 01494 787 478 and ask the reception for Joshua for a free quote on your transfer as well as my opinion on your current situation, we can discuss a strategy on how minimize the effects of today. I guarantee to beat any rate offered elsewhere, which is all the more important when markets are moving against you.
Those looking to purchase Sterling can do the same or email me on email@example.com to discuss a strategy on how to ride this continued move in your favour to its peak.
GBP/EUR rates cascaded downwards towards the end of UK trading yesterday, then US markets opened and the same trends we were seeing for the UK market throughout the day were replayed across the Atlantic.
As predicted in my post yesterday morning, we are now in the lower 1.3’s as the trends established by markets on Friday have continued on unabated.
The main determinant for this recent loss of Sterling value has actually been due to developments in the US. Janet Yelen, the head of the Federal Reserve Bank of America, gave near guarantees that the US will be raising interest rates before the end of the year.
Since the 2007/2008 financial crisis, arguably the main determinant of any major currency’s value is its timeline to raise interest rates once again. The US is making bold claims of their own, while the UK seems to be shying away. Andy Haldane, one of the 9 members at the Bank of England who vote on our interest rate level each month even mentionned the possibility of future cuts to protect the UK from negative market forces (a poorly performing China).
As such there was amass sell-off on Friday of Sterling into the US Dollar for investors looking for more likely short-term gains. GBP/USD crashed, but the large sell of of the Pound also caused secondary effects for its other currency pairings. The loss of demand for Sterling is why GBP/EUR has fallen so drastically as well.
These trends continued into Monday, but it is likely that this trend in favour of Euro sellers has now halted.
We have been down at these levels last week. Rates instantly shot back up as the temptation to sell Euros when these rates presented themselves became too high, causing markets to correct themselves rapidly.
Markets will now be looking ahead to the release of Eurozone inflation tomorrow, as such, the recent market forces in favour of Euro sellers are no longer the sole focus.
Anyone with Euros to sell I strongly recommend calling me on 01494 787 478 and asking the reception for Joshua. This way I can provide you with advice on the best time throughout the day to convert your Euros, and once we have a strategy in place I can offer a free quote on your transfer (to which we offer a rate-beating guarantee).
Those with Euros to buy may see tempting opportunities in the wake of thes recent lows by the end of the day, email me on firstname.lastname@example.org to discuss how to maximise any moves in your favour to a level you desire or require with a limit order.
Friday shocked markets with rates undergoing a continued slide in the afternoon for most major Sterling pairings. GBP/EUR almost hit 1.34 once more and GBP/USD is down to 1.52 in a very poor Friday afternoon for Sterling.
A couple of triggers contributed to this slide which benefitted Pound purchasers.
Mario Draghi, the head of the European Central Bank, gave the single currency a welcome boost by stating that further quantitative easing had not be decided on as of yet for the Eurozone. He had previousy spoke of further emergency stimulus as a necessity, so this sudden change of tone reversed much of the recent weakness in the Euro following the Volkswagen scandal last week. The resulting Euro strength was why GBP/EUR fell so sharply in the afternoon.
More generally, the Pound lost value due to the bullish remarks by head of the Federal Reserve Bank of America, Janet Yellen, about the near guarantee of an interest rate hike before Christmas in the US economy.
The timeline for when an economy will raise interest rates has arguably been the most important factor for a currency’s value since the 2007/8 financial crisis. Recently the UK has been more dovish about the prospect, with one of the members of the Bank of England publicly stating that cuts could be required rather than hikes to protect the UK economy against slowing global demand.
With a more positive view on short term hikes for the US over the UK, a large amount of Sterling holders moved into the USD. This caused GBP/USD to fall and the mass sell-off of Sterling caused weakness across the board on Friday.
This week has little data on offer to reverse this trend. In fact, the only data releases of importance today will be housing and private expenditure data for the US economy this afternoon. Two regularly strongperformers for the US economy, should these come in as expected these will cement positive views on Yellen’s comments last week and cause futher capital to flee Sterling and into the Dollar – causing further falls in most GBP currency pairings.
I strongly suggest that anyone with Euros or USD to buy should contact me on 01494 787 478 and ask the reception for Joshua for a free quote on your transfer, as well as tailored advice on your situation. Quote this article for commercial rates of exchange on your transfer to help make up for your recent losses on the currency market.
Euro sellers, email me directly on email@example.com to discuss a strategy on how to ride this recent wave in your favour further.
Sterling drops against all majors in a poor final weekly session for the Pound – Will this last? (Daniel Wright)
The Pound ended the week down against all majors in a week where very little economic data was actually released for the major economies.
In my opinion this is just a slight blip and presents a fantastic window of opportunity for anyone looking to sell Euros, Dollars, Australian Dollars, Canadian Dollars or any other major currency to buy Sterling.
Betting on interest rate hikes for the U.K has indeed been put back and yesterday BOE Governor Mark Carney did warn on a potential house price crash due to the buy to let market, but the economy is still performing pretty well compared to many others and with the rugby world cup currently giving the U.K economy a shot in the arm.
With this in mind I would expect retail sales figures to rise over the coming months and if the U.S do move forward with their rate hike in the next few months then speculation will be rife on the U.K following suit and Sterling may well get a boost from this.
My personal opinion on what to do in a market like this is to make good use of limit orders. A limit order is basically where you can place an order into the market to buy currency at a specific rate of exchange and should that level become achievable, even for a few seconds at any point (24 hours a day, 7 days a week) then your currency is bought out automatically for you.
The beauty of the order is that it can be cancelled or amended at any point as long as they have not been filled and there are no extra costs to use them.
If you feel that we could be of great use to you in terms of helping with an upcoming exchange or you would like more information on a limit order then you are more than welcome to contact me directly.
We welcome all new clients and can not only offer different contract types but we can also get extremely good rates of exchange.
All you need to do to get further information is to email me (Daniel Wright) on firstname.lastname@example.org and I will be more than happy to get in touch with your personally.
Do you find this site of use? If so then it makes sense to contact us to assist you with your currency exchange!
Here at Pound Sterling Forecast we have now spent over 5 years keeping readers fully up to date with market movements by giving timely, up to date and non biased market views and opinions.
All the writers on this site work for a currency brokerage with a turnover of half a billion pounds a year that has won numerous awards both for rates of exchange and customer service so we thought we would make you aware in case you didn’t know.
I have personally had nearly 5000 new clients get in touch with me through the site over the years and for anyone exchanging over £10,000 there has not been one that we have not been able to make a saving for, so if you are in the process of buying a property overseas, emigrating, buying a car or your company carries out large currency exchanges then it would be well worth you contacting me personally even if you feel you are currently getting a good deal through another broker as more often than not you can still do a lot better.
If you are using the bank then it is essential that you get in touch as it is very rare a banks exchange rate is anywhere near what we can offer as a company.
You can email me (Daniel Wright) the creator of this site personally on email@example.com or fill in the enquiry form on the right hand side of this page with a brief description of what you need to do along with a contact number and I will personally call you to discuss your requirements and let you know how I can assist you.