Pound Sterling Forecast

As my colleague Ben mentioned this morning we had the latest set of inflation figures from the UK. Surprisingly inflation increased to 3.5% in March from the 3.4% in February, a move that was a little unexpected with many analysts predicting a slight fall. This has halted a five month run of falling inflation and has divided opinion as to whether the Quantitative Easing programme adopted by the Bank of England is actually working. The next big data set to help determining whether QE has been successful will be GDP (Gross Domestic Product) figures for Q1 of 2012. These figures are released on the 25th of April and will be key for the short term direction of the pound. The UK officially finished 2011 in negative growth and another quarter like this will see the UK back in recession. Personally I think we will have a seen a slight expansion in 2012 but I do believe this to be minimal and can therefore not rule out the Bank looking at further QE heading into is next meeting in May. Regular followers of this blog will be aware the impact QE can have on the direction of the currency involved, therefore any talk of more QE is likley to hamper the pounds recent run – should you wish to take advantage with the pound at a near 19 month high against the Euro and close to 1.60 against the US dollar then email Michael at mgv@currencies.co.uk

Sterling exchange movements against the Canadian Dollar

The biggest mover today against the pound was the Canadian dollar. The loonie as it affectionately known moved nearly 1% against sterling following the release of its latest interest rate decision in which the Bank of Canada decided to keep its base rate on hold at 1%. This did little to surprise the market and was very much expected but it was the report following this release from the  BOC that led to a strong move for the loonie. The report indicated that the BOC will not rule out future interest rate hikes as economic growth and inflation figures were stronger than forecast. An interest rate hike would tend to lead to an increase in value for the currency involved as it makes it more attractive as an investment opportunity and hence demand will increase. Rumours of future rate moves will also tend to have the same affect, indicated by the move this afternoon. Tomorrows Bank of Canada Monetary Policy Report will give further insight into short term projections for interest rate moves and we may see further swings in the CAD.

As a broker working for currencies.co.uk I am here to try and help private and corporate clients decide when is the best time to trade – we take an active look at the market on behalf of our clients and will happily pass on opinions with regards to recent trends and the direction the amrket may move. Should you have an upcoming currency exchange to arrange and you would like to run through the various contracts we can offer then pleas email me at mgv@currencies.co.uk

Today sees the release of the Bank Of England Interest rate decision, no change in rates is expected and to be honest I feel it will probably be a bit of a non event, however be aware that the BOE do like to throw a spanner into the works whenever the Pound does start to perform well so anyhting could happen.

The key data for people to be aware of is U.S Non Farm Payroll data – Regular readers will be aware this can effect all major currencies and can lead to just as much market volatility as an interest rate decision. Now, the big problem is that we have a bank holiday in the U.K this means that you will find it hard to call your bank or broker to book out an exchange rate should rates either move drastically against you or indeed in your favour. There are options available to youand I can help you should your bank not offer these options. You can place a limit order and a stop loss order, this means you set yourself an ideal trading level, or a worst case scenario and should either get hit then your currency is bought out or sold automatically for you, I would then merely get in touch after the Easter break to inform you and you would be required to settle the contract with us as per normal.

I work for Froeign Currency Direct and built this site to help give people simple information on the markets without all the technical analysis that quite simply confuses people, If you find my site of use or want to get more information on how I can save you money then do feel free to email me directly djw@currencies.co.uk and I shall be happy to help.

Well we do indeed have a lot to cram in this week before a long weekend and what may even be a white Easter here in the U.K the way things are going.

After last weeks pasty and petrol combo that grabbed the headlines, this week should bring a slightly more interesting and relevant amount of news as there is a lot of economic data out accross the globe.

Today – GBP EUR AUD

Already this morning we have seen manufacturing data for Germany come out worse than expected and for the U.K data has indeed been better than expected, leading to another good start to the week for the Pound against most major curencies.

Shortly we will see the release of the European unemployment figures at 10:00am and i’m fairly sure that this won’t be news to celebrate for the Euro once again.

Overnight we see the Reserve Bank of Australia release their interest decision and it has been suspected a rate cut could be in order some time soon over there, should we see this then you may find the AUD weaken once again (an interest rate cut is generally seen as negative for the currency concerned as it makes it less attractive to investors). Should you have a transfer either buying or selling AUD then a limit or stop loss order may be sensible to protect yourself overnight, email me djw@currencies.co.uk for more details on this option.

Tuesday – GBP EUR

European GDP figures are out tomorrow morning and contraction is on the cards, this may again lead to Euro weakness in early morning trading however be aware that this is expected and the markets do move on expecatations as well as facts so if this release isn’t as bad as expected the Euro may pull some ground back.

Wednesday GBP EUR AUD

Australia release trade balance figures very early on Wednesday morning, this is a measure of imports and exports and should show us just how well Australia is still riding the Chinese wave.

For Euro followers the ECB (European Central Bank) interest rate decision is out followed by a press conference in mid afternoon. Quite often the rate decision doesn’t throw too much into the mix however the press conference follwing it genrerally leads to Euro volatility depending on what head of the ECB Mario Draghi  has to say about how he plans to tackle the current crisis.

Thursday - GBP CHF CAD USD

Before trading lines open those with an interest in the Swiss Franc may see some movement as CPI (Consumer Price Index) is released, this is inflationary data however I highly doubt it is going to move the marjkets too much, the GBP-CHF rate has been fairly static to say the least of late as investors wait and see just what the Swiss National Bank will pull out of their locker next.

Industrial and Manufacturing production is next on Thursday morning for the U.K and following a fairly positive release this morning I would not be surprised to see this lead to a minor spike again for the Pound.

Heads turn to Canada at 11:00am as the Canadian unemployment rate is released, expectations are for it to stay at 7.4%  (much better than the 23% in Spain however) any change to expectations could lead to a volatile end to the week for the Pound.

The USD finally gets a go on Thursday lunchtime at the end of what is quite a quiet week for the Dollar as jobless Claims data is out (similar to unemployment and may give an indication to how Non Farm Payrolls will come out next)

Finally to round off the week the NIESR (National Institute of Economic and Social Research) release their GDP estimate for the U.K – GDP is in no doubt in my mind going to be the big talking point this month (If figures from quarter 1 for the U.K are negative we are back in a recession officially) and they are expected to predict a growth of 0.1% – Any change to this could lead to a mad end to the week and the it is going to be so tight as to whether the official figure at the end of the month is positive or negative that the Pound will no doubt be extremely jittery this month.

I personally feel the Pound may have another positive week, if you have an upcoming transaction to make either this week or in the coming months then feel free to contact me directly by emailing me djw@currencies.co.uk – The company I work for have won numerous awards for both exchange rates and customer service and if you find my site here a valuable read then having me as your personal broker should come in extremely handy too. I look forward to speaking with you.

Sterling had a great day against the USD in trading yesterday and stayed fairly stable against the majority of majors.

We are around a five month high against the USD, however be aware we are now possibly going to find ourselves in limbo much like we have been against the Euro over the past few weeks stuck hovering just below and just above the 1.20 barrier. GBP-USD is now just below 1.60 and I fear we could see a similar pattern forming until we get a nudge one way or the other by means of an important data release.

Earlier this month 800 Eurozone banks brought €530bn from the ECB in the  “largest investment of its kind”. On the same day Mario Drahgi  the head of the ECB said the Eurozone had avoided a “major, major credit crisis” since this announcement the Euro zone has shown signs of stabilising and the Euro has strengthened by roughly 1% against the GBP.

The GBP/EUR exchange rate is one to watch as Europe  continues to show positive signs of stabilising, in recent years the Euro has  bounced back faster and stronger than expected against the GBP.

• November 2008 rate 1.21, 1 month later GBP fell 15.7% to
  1.02
• June 2010 rate 1.2251, 1month later GBP fell 4.3% to 1.1721
• August 2010 rate 1.2250 3 months later GBP fell 8.7% to
  1.1184
• Jan 2011 rate 1.2069 4 months later GBP fell 8.3% to 1.1057

The GBP hit an 18month high of 1.2157 high at the start the year and has  remained above the 12month average for more than 2months. Ask yourself how much  this type of movement would affect your business or  upcoming property purchase? If you have a currency transfer to carry out in the coming weeks or months either for yourself or your company then please do feel free to email me directly djw@currencies.co.uk with a brief explanation and a contact number and I will be happy to get in touch to assist you with both an explanation of the options available to you and my thoughts ahead of what is sure to be an extremely volatile market.

The States seems to be the talking point this week with Federal Reserve Chairman Ben Bernanke Speaking on Tuesday evening about the economy which of course can throw up absolutely anything as we have seen over the past year or so.

Most importantly we see the release of U.S GDP (Gross Domestic Product) figures On Thursday at lunchtime if you are in the U.K. THis release can effect a host of major currencies and with the old saying on the markets of when the U.S sneezes the U.K catches a cold a positive release for the U.S may indeed benefit the Pound.

With China seemingly slowing down we have seen the Australian Dollar struggle over the past week or so and it wouldn’t surprise me for the AUD to have a volatile week once again. If you have a transfer involving either buying or selling the Australian Dollar I suggest you inform an experienced broker if you already use one, if you don’t and you have been just buying or selling when you see a good rate then maybe it is time you got some help on your side.

Feel free to email me directly djw@currencies.co.uk if you have a pending transfer to make and I will be happy to explain the various options available to you to either protect yourself from adverse market movements or to make sure you take advantage of a spike in your favour no matter what time of day or night.

As the week goes personally I feel that confidence is slowly creeping back into the Pound so we could have a fairly poitive week however as you are all aware, anything can happen these days!

Once again the headlines are all about how much the British public will be poorer than ever over the coming year or tw, but as the Pound goes although I don’t feel it will rapidly strenghen in the coming weeks I do feel that the Pound will gather strength towards the back end of the year should things go to plan.

Of course this is by no means set in stone as all of you will know, predictions can go out of the window within a few days should we see a shock announcement to the markets globally(and there are indeed plenty of those around these days!)

People will no doubt be hit in certain matters with the budget and may gain through others, but the positive thing I am taking from it is that it does appear to support growth in the economy which in essence can only be good for those of you waiting for the Pound to strengthen before you shift your savings overseas to buy that dream second home.

I constantly speak with clients who have now emigrated to New Zealand or Australia and have spent the last year or two dripping over the proceeds of a house sale until the rates they saw when they were applying for their visas a few years ago come back.

Hopefully with the slowdown in China and numerous other factors we may see improvement for people in this positon soon…By no means do I think we will be back at 2 to the AUD or 3 to the NZD but I would not be surprised to see an improvement.

If you have transfers to make involving either buying or selling the Pound I can help you when it comes to getting the best exchange rates both in terms of having a knowledgable input and getting you the highest rate when you do decide to book your currency. Please feel free to email me if you would like me to help and you find my site useful. djw@currencies.co.uk

Interest Rate Decisions – What may happen today?

Today sees the release of interest rate decisions for both the Bank of
England and the European Central Bank at 12:00 and 12:45pm respectively.
Although no change in interest rates is expected, the key for the two will be
as follows:

Further QE for the U.K? All eyes will be on Quantitative Easing when the Bank
of England release data at 12:00pm. For those that have followed the markets
over the past few years you will be aware that even the mere mention of QE
(essentially printing and injecting more money into the economy) tends to weaken the Pound. Last Wednesday the
Pound saw great losses as the BOE mentioned in the minutes of their last
interest rate decision, that more QE had been discussed and indeed two members
of the Monetary Policy Committee had voted for more QE than we actually did
receive, suggesting more may be just around the corner.

ECB Mario Draghi Press Conference – Following the ECB rate decision this afternoon the
markets will no doubt be dominated by the ECB press conference and what plans
‘super Mario’ has to tackle the various problems Europe has to deal with. We
can see quite wild swings during this, the mention of another cut in rates may
be Euro negative and a confident stance surrounding Greece may be seen as Euro
positive. If you have an upcoming transfer to carry out involving buying or
selling the Euro, you should contact me on djw@currencies.co.uk so I can make you
aware of any changes to exchange rates either positive or negative for you.

U.S Dollar Forecast and Non-Farm Payroll Data due tomorrow

The Sterling Dollar rate of late has been
a bit of a rollercoaster for those with a Dollar interest be it buying or
selling, and to be honest with the ongoing European debt problems and investors
not knowing what may be going on behind closed doors this rocky ride is sure to
continue. In times of uncertainty investors tend to look for a safer haven, one of which is the USD.

Tomorrow we also see the release of U.S
Non-Farm payroll data at 13:30pm and this release can be just as important as
an interest rate decision as predictions by analysts in advance can be wildly
incorrect, and with the market moving in advance on rumour as well as fact, a
stiff market correction can happen fairly rapidly, affecting all major
currencies. My personal opinion is that the Dollar will continue to strengthen
in the short term whilst problems in Europe are still rife, and we will be
closer to 1.55 than 1.60 by the end of the week.

If you have a transfer to carry out before
then end of the week email me directly here djw@currencies.co.uk and I will call you back. We have a series of different contract types to
assist you ranging from forward time options, to stop loss and limit orders,
feel free to get in touch for a full and straight forward explanation as to how
these options work.

New Zealand Interest Rate Decision

Last night the RBNZ kept interest rates on hold as
expected, however due to a positive outlook on the economy over in New Zealand
due to an increase in Private sector Consumption and an uptick in wage growth
has indeed opened the door for a potential interest rate hike in the next few
months. A hike in interest rates is generally seen as positive for the currency
concerned and merely speculation of this could continue to strengthen the NZD
in trading this morning.

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then you will be well aware that the European property market isn’t an ideal
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Well, we could be faced with an extremely volatile week ahead with the amount of interest rate decisions we have due out and with the discussions that will follow prior to them.

First up is Australia, they release their interest rate decision overnight on Tuesday night followed by a monetary policy statement shortly afterwards, for the last few months speculation has been rife over whether or not the RBA will cut rates and on this occasion rates are expected to stay on hold. High interest rates generally make a currency more attractive and this is one of the factors that have kept the AUD strong over the past two years.

It would not surprise me to see a shock on this one, either a surprise cut in rates or a fairly interesting monetary policy statement shortly afterwards, personally I feel that should this happen we could see much better rates for buying Australian Dollars by the end of the week.

An interest rate hike is generally seen as very positive for the currency concerned and a cut in rates is seen as a negative, and the currency markets do move on rumour as well as fact, therefore even the mention of a rate cut in the future may lead to Australian Dollar weakness.

Next up is New Zealand on Wednesday night U.K time – no change is expected here however with the current global situation always expect the unexpected!

The U.K steps up on Thursday at midday, any change in interest rates would be front page news so I highly doubt we will see that, however any more QE (Quantitative Easing) could lead to Sterling weakness accross the board as we saw following the Bank of England minutes last Wednesday.

Europe is shortly after at 12:45pm and no change to rates is expected but watch out for the press conference in the afternoon, this might give indications as to current economic performance and plans to tackle certain issues inclusive of Greece which always turns a few heads in the investment world!

Finally, two releases on Friday with the Canadian Interest rate decision, i’m afraid no major shocks expected here, and the Non Farm Payroll data for the States – this can be as big a market mover as a change in interest rates as the predictions in adbvance can be wildly wrong – also this tends to affect all major currencies depending on the release.

If you have an upcoming transfer involving any of these currencies or indeed any other major currency and want me to be the eyes and ears on the market for you, then contact me directly djw@currencies.co.uk leaving a brief description of your requirement and a contact telephone number and I shall be happy to help.

The Pound has once again made gains against the USD over the start of this week as all seems relatively quiet on the European front (not for long though i’m sure) and global attitude towards risk appears to be increasing off the back of this.

In turn, this means that investors tend to pull funds out of their perceived ‘safer currencies’ such as the USD (gold is also priced in Dollars) decreasing the demand for this currency and also making it cheaper to buy.

We have also seen the ‘riskier currencies’ such as the South African Rand, Australian Dollar and New Zealand Dollar make gains from this as demand for them increases.

My view is that more European troubles are sure to come to front page news again it is just a case of when…. As and when this does happen we should see things turn around again… Those looking to sell Dollars or Sell AED Dirhams (pegged to the Dollar) will have a selling opportunity and those buying AUD, NZD or ZAR will have a great buying opportunity (compared to recent times anyway) however the European Central bank would all be great poker players as they are all very good at keeping their cards close to their chest so we may have a little wait on our hands first.

If you have a currency transfer to make be it buying or selling then feel free to contact me directly djw@currencies.co.uk for a direct comparison against your currenct bank or broker and I will do everything I can to beat it by enough to make it worth you using me instead as there is always room for improvement in my experience.