Tag Archives: pound

Sterling exchange rate latest – Economic data due out soon that may cause volatility (Daniel Wright)

The Pound has dropped against most major currencies during trading today, however we have seen a positive movement for Sterling against both the Norwegian Krone and Canadian Dollar.

The Pound in general appears to have fallen slightly out of fashion this week but anyone looking to buy either NOK or CAD in the coming days or weeks will have been pleased to see a decision from oil ministers to keep their output target unchanged. With oil prices being key to both of these particular currencies this news weakened both off with the Canadian Dollar losing roughly half a percent and Norwegian Krone losing over 1%.

We have plenty of economic data due out in the coming few days, first and foremost we have consumer confidence figures due out for the U.K which are actually released shortly after midnight. Consumer confidence is a measure of the general feeling of consumers and a positive figure may give the Pound strength yet negative may lead to quite the opposite.

Tomorrow morning is key for those that have the requirement to either buy or sell the Euro as we see inflation figures released at 10:00am. Inflation has been one of the key talking points during European Central Bank interest rate decisions and the press conference shortly after as there had been a fear of deflation which did lead to head of the ECB Mario Draghi taking fiscal action.

Later on in the day we have Canadian growth figures which may either give the Canadian Dollar a chance to recover or kick it whilst it is down. Expectations are for a positive figure but as regular readers will know the market is here to surprise us.

Over the weekend we also have an extremely important vote surrounding Switzerland which may have an effect on the Swiss Franc and the price of gold. A great overview of that can be seen by clicking here.

If you have foreign currency exchange in the coming days, weeks or months then it may be well worth you getting in contact with me directly. You can email me 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 call you personally. I would be extremely surprised if I could not better any exchange rate that you have already been offered.

Happy thanksgiving to our friends over in America – I look forward to speaking to you soon.

Sterling gains even with mixed data. GBPEUR Forecast

Sterling levels have gained recently despite mixed data releases this week. UK GDP figures yesterday came in as expected with a 0.7% gain through the third quarter of this year however there was a dramatic fall in the business investment figures, from 9.3% to 6.3%. This does suggest that there may be some trouble ahead for the UK as business leaders already start to take their foot of the accelerator in anticipation of the uncertainty caused around the general election only 6 months away. It really does highlight how potentially volatile the sterling pound will be in the run up to the election, a negative trend is generally expected as the uncertainty impacts Sterling’s value so is certainly  period that people looking at buying foreign currency should avoid next year.

There is little economic data out today, Thursday, so I generally expect a fairly quiet day for GBPEUR levels, watch out for Nationwide House Price data tomorrow morning however and the potential for profit taking. Profit taking is when investors reset their levels of investments abroad, so either bringing back profits or re-investing, and this change in demand can have a short term impact on currency values sometimes giving opportunities.  If you are looking at trading within the next week please let us know ASAP and we can help with the timing of the trade. Next week there is a host of economic data including PMI data for Manufacturing, Construction and the Service sector and of course the Bank of England Interest Rate Decision on Thursday. Also watch out for the Autumn Budget Statement expected on Wednesday which I think could be negative.

For a full break-down including the potential strategies you have available to you please get in contact, email myself if you would like a personal response via hse@currencies.co.uk

Currency Forecast 2015 – Knowing what may happen in the future allows you to free up time and limit your risk…

GBP

The pound has been one of the best performers of 2014. Will this be the case for 2015? I have to say for the earlier part of 2015 it looks highly unlikely as a very uncertain General Election should cause GBP weakness. We saw this with the Scottish referendum in September. It is not just the outcome here that is important. Business confidence will be significantly lower as both international and domestic businesses alongside individuals refrain from key decisions owing to the uncertainty. This election will be fought and possibly won or lost on the European question and this will greatly unsettle financial markets which in my opinion have failed to so far price this important event in.

Generally speaking the raising and lowering of interest rates causes a currency to fluctuate. If a central bank actually raise rates (or market observers think they might in the future) the currency should strengthen. If there are thoughts that they will lower rates the currency will weaken.

Applying this to the UK, expectations for most of the summer the bank would raise interest rates caused the pound to spike. Remember currency markets move on rumour and speculation as much as fact. This speculation has now been pushed back (and may be pushed even further back) into 2015, if not 2016. If this is the case it is likely sterling will likely fall further.

If you are expecting a larger currency purchase in the first half of 2015 there might be some good arguments for utilising a forward contract to fix current exchange rates. We were in an almost identical position 2 years ago on GBPEUR approaching Christmas and by March had dropped some ten cents.

Part of our service is keep you updated and examine strategies that will protect you from unexpected swings on the currency market so please email on jmw@currencies.co.uk to discuss the options available to you.

Euro

Inflation is the rate at which prices rise or fall. Rapidly rising or falling prices can destabilise an economy and managing Inflation has been a key aspect of the European Central Bank’s (ECB) economic policy in 2014.

Mario Draghi, President of the ECB has stated that the new year may see the ECB ramp up their Quantitative Easing (QE) programme. The ECB’s approach to their economic situation has changed in 2014 from reactive to proactive with a range of measures to try and encourage growth being put in place.

QE (sometimes referred to as printing money) is where a central bank injects money into an economy to rejuvenate it and some observers have predicted the future will be a ‘stagflationary’ period in the Eurozone. This is where an economy fails to grow and inflation is a problem. It might be that just like Japan and the US before the ECB needs to continuously be ramping up the QE presses, this could lead to Euro volatility depending how the market digests such news.

Predicting 2015’s movements on Euro rates could prove very difficult but with a large amount of policy having been decided on in 2014, it may be the Euro is more susceptible to movements from other currencies.

USD

As we expected the dollar has recovered but just like with sterling the rise is mainly linked to expectations the Federal Reserve will raise interest rates in 2015.

The US economy is finally performing well but is this mainly down to the trillions of dollars we have seen pumped into markets from their QE programme? The end of the Fed’s QE programme may yet unsettle markets, slowdowns in China, the Eurozone and the UK could see the US once again roll out the QE presses.

I would personally not be holding on for them to raise interest rates anytime soon and USDGDP traders might wish to take stock of the 15 cents improvements.

For more information on the forecast and to be kept up to date with the latest news please contact me on jmw@currencies.co.uk

How well do you really understand what is driving your exchange rate?

The pound looks likely to rise against most of the major currencies longer term as the UK appears likely to raise interest rates in the future. This is important because the raising and lowering of interest rates by a central bank greatly affects the strength or weakness of a currency. Understanding this fact – that the raising and lowering of interest rates greatly affects the strength and weakness of a currency – is key to predicting where exchange rates are headed.

One of the major reasons for GBP strength in 2014 is high expectations the UK would raise interest rates in 2014. This expectation has been pushed well back into 2015, if not 2016 and anyone holding on for this to happen to make an exchange had better have a long time to do so! I remember in 2012 we were almost in an identical position , with expectations high the UK would raise interest rates in the coming year or two. We then had the Eurozone crisis deteriorate (remember Greece on the brink of leaving the Eurozone) and the following Spring the UK entered a triple dip recession and the pound crashed from 1.24 to 1.14 in about 6 weeks!

I do not think we are likely to see such a sharp move but with the General Election and increased political uncertainty on the cards for 2015 a tough patch for the pound appears highly likely. Even though May 2015 seems many months away it is not actually that far in terms of exchange rates. Considering you have seen anywhere from 5-15 cents movement per year for the last few years on GBPEUR, making some plans now for currency in the new year is clearly sensible. 

We offer a range of contract options to fix exchange rates at currency levels and also to automatically purchase when a desired rate is hit (stop / loss and limit order). Speaking with or emailing us with a brief outline of your situation carries no obligation. We are currency specialists who are here to assist in the safe planning and execution of your transfers.

The real risk on exchange rates is doing nothing and leaving it all to chance so to learn more please contact me Jonathan on jmw@currencies.co.uk,

I look forward to hearing from you.

Thank you,

Jonathan

Tomorrow’s Non Farm Payroll could be more important than the rate decisions today!

US ~Non Farm Payroll data is due tomorrow which could be a big market mover as it is the first one since the US stopped their QE programme. Today’s meeting with Mario Draghi might also be very interesting and should be a market mover, the least interesting thing is probably the UK’s Bank of England decision which is not expected to yield anything new.

How can you make a decision on when is the right time to enter the market if you don’t know what is happening? The idea of this blog is to provide information on just where rates are headed and make sure you get the best price when you do decide to enter the market. If you have a transaction that you need to consider why not get in touch with our specialist team to find out more about moving money internationally at the very best rates.

Sterling has done really well this year as the UK economy improves and investors position themselves for the UK to raise interest rates. Next year we would expect the UK elections to move the market, the increased uncertainty surrounding the political situation in the UK is bound to cause ripples on exchange rates.

When considering making a currency exchange understanding what is driving the exchange rate is vital to getting the most from the market.  Please contact  Jonathan on jmw@currencies.co.uk for a quick overview of your position and to learn more about getting the best rates.

Sterling exchange rate forecast – The coming days and what may happen to the Pound (Daniel Wright)

Sterling has had a mixed week against most major currencies, slipping slightly against the Euro and the Dollar yet making minor gains against the Australian Dollar, New Zealand Dollar and Canadian Dollar.

As far as U.K economic data goes we had manufacturing data for the U.K which was fairly positive however construction and services data has been reasonably negative so the U.K has not had the best start to the month as far as economic data goes.

We still have some extremely key releases to come out this week with the main focus for anyone looking to buy or sell the Euro being the European Central Bank interest rate decision and press conference. For the past few months we have seen the Euro generally weaken during ECB rate decisions and the press conference thereafter due to the continued concerns of deflation in the Eurozone and head of the ECB Mario Draghi taking actions to try and counter act this. Recent European inflation figures actually suggested that what is being done at present is currently working as inflation has risen back up a little.

This may well be commented on in the ECB press conference tomorrow so if you have Euros to buy then this has the potential to give the Euro strength – The press conference is due at 13:30pm tomorrow and usually goes on for around an hour with the rates being exceedingly volatile during this period as investors hang off of Mario Draghi’s every word.

Overnight tonight we have the unemployment rate due out in Australia which could lead to sharp movements for the Australian Dollar outside of our trading hours tonight. Expectations are for the unemployment rate to remain at 6.1% so any change to this may bring quite a lot of market movement. With employment figures for New Zealand earlier in the week moving the New Zealand Dollar by two cents overnight it is certainly a release to be aware of.

Overnight on Thursday we also have the RBA Monetary Policy Statement in Australia which will inform us of any future economic policy to be introduced by Australia and any comments in it may lead to another volatile night for the Australian Dollar. Over the past few months Governor Glenn Stevens seems to have changed his mind like the wind on how happy he is about the strength of the Australian Dollar, the main view though being that he feels it is slightly overvalued so more comments like this may weaken the AUD and p[resent a buying opportunity.

Friday is a busy day for all major currencies. First and foremost we have the Trade Balance figures out for the U.K which will show the balance between imports and exports for the U.K economy for September a positive value shows a trade surplus and would be seen as positive for the Pound.

Later in the day we have Non-Farm payroll data from America and this can have an effect on all major currencies. It is a measure of the number of people in Non-Agricultural employment in America, Non Agricultural due to the fact that this can be seasonal. The reason it has an effect on all major currencies is because it can alter global attitude to risk and the figures predicted can quite often be quite a way out, so be sure to have a keen eye on exchange rate movements at 13:30pm on Friday.

Finally over in Canada we have their unemployment figures with expectations of a small rise from 6.8% to 6.9% which may be a negative for the Canadian Dollar.

If you are looking to carry out a currency transfer in the near future it may be prudent to let me know sooner rather than later so that I can keep you fully up to date with market movements. We also have a range of contract types available inclusive of forward contracts, stop loss and limit orders email me on djw@currencies.co.uk if you would like more information on how these orders work.

Should you find my updates helpful and interesting yet you have not yet registered an account with me then opening an account is completely free, carries no obligation to trade and puts you in the position to book out a rate as and when you wish. If you are currently using another broker or your bank then it is well worth getting in contact  with me for a comparison as I would be highly surprised if I cannot save you money over your current currency option. All you need to do is email me (Daniel Wright) on djw@currencies.co.uk with a brief explanation and a contact number and i will be more than happy to contact you personally.

 

 

 

What to look out for on the pound in the coming months…

When considering making a currency exchange an understanding of what is driving the exchange rate is vital to getting the most from the market. How can you make a decision on when is the right time to enter the market if you don’t know what is happening? The idea of this blog is to provide information on just where rates are headed and make sure you get the best price when you do decide to enter the market.

Sterling has done really well this year as the UK economy improves and investors position themselves for the UK to raise interest rates. Next year we would expect the UK elections to move the market, the increased uncertainty surrounding the political situation in the UK is bound to cause ripples on exchange rates. If you have a transaction that you need to consider why not get in touch with our specialist team to find out more about moving money internationally at the very best rates.

Please contact me Jonathan on jmw@currencies.co.uk for a quick overview of your position

How will UKIP affect sterling?

UKIP continue to make gains in polls and are certainly likely to be a thorn in the side of the more established parties, indeed they already have been. But is this more a reflection of the tough times ahead for the UK (and the pound) or a flash in the pan protest vote?

UKIP have the power to severely undermine confidence in sterling. there is tremendous uncertainty posed by a party with no solid economic idea from what I have seen. Aside from promising to withdraw from Europe and playing on peoples immigration fears it is difficult to find concrete policy. Let it be known that any withdrawal from Europe would have wide reaching consequences for the UK economy and hence the pound. Whilst it might be welcomed we examine the relationship with Europe the economic benefits of being part of Europe should not be underestimated.

We shall learn much more about the true effects of UKIP on the pound in the next few months as we have bi-election and then the General Election in May 2015. The effect on sterling from increased political uncertainty will undoubtedly be negative and anyone hoping to see sterling keep climbing in 2014 and beyond might be disappointed.

To keep up to date with the pound and how important events affect your exchange please contact me Jonathan on jmw@currencies.co.uk

Retail sales tomorrow morning and growth figures on Friday to be key for Sterling exchange rates (Daniel Wright)

Tomorrow morning we see the release of Retail Sales figures for the U.K followed by GDP (Gross Domestic Product) figures on Friday morning.

Retail Sales are expected to have dropped off a little and growth figures are due to show economic growth for the third quarter of 2014 to be at 0.7%.

Sterling has had a fairly flat week as far as currency movements go so these next few days may give us a grandstand finish.

If you are looking to exchange foreign currency in the next few days or indeed weeks then feel free to get in touch with me directly, even if you want a quick comparison to make sure you are getting the most for your money.

You can email me (Daniel Wright) directly 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 get in touch with you personally.

Will it be a busy and positive end to the week for the pound?

Early indications suggest yes! The pound has clearly been the favourite currency of 2014 as the UK leaves its counterparts behind with solid economic growth and economic policies all pointing towards raising interest rates. For me this trend is not finished and whilst the pound has clearly come slightly unstuck this October (the month economic realities often hit home, remember the Wall St crash?) longer term sterling really should remain the investors choice.

Risks remain from the Eurozone slowdown (40% of the UK’s overseas trade is with the Eurozone) and a general deterioration in the global economic outlook but on balance the UK is benefiting from improved domestic demand and whilst it may be that sterling does dip a little more as interest rate expectations are pushed back, I still believe the UK will raise interest rates ahead of the United States. I therefore view any dip in sterling as a buying opportunity well worth capitalising on.

Tomorrow’s Retail figures will be a big indicator as to whether or not the this domestic demand is sustainable and Friday’s GDP (Gross Domestic Product) will again be very indicative of just exactly how the UK is faring, I would personally expect sterling to fall tomorrow but rise Friday. If you are considering an upcoming exchange why not speak with me to learn a little more about the forecast?

What exactly should I do? I cannot unfortunately tell you exactly what to do or when to buy the currency, no one can! I can however keep an eye on the rates for you and highlight improvements and upcoming events which will affect the exchange. The uncertainty of the foreign exchange market means making firm decisions is impossible and it is only by speaking with a true specialist you can fully understand what may happen down the line.

For more information please contact me Jonathan Watson on jmw@currencies.co.uk

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