Pound Sterling Forecast

Halfway to recession?

Yesterday morning saw the release of U.K GDP (Gross Domestic Product) figures for the fourth quarter of 2011 released and unfortunately they did not make great reading for the U.K. Gross Domestic Product figuresshow how much an economy grew or contracted in that particular period and the prediction was for the U.K economy to have shrunk by 0.1%

The figure actually came out at -0.2% which doesn’t sound a lot but it does however mean we are indeed closer to a recession than many had first thought.

An economy is officially in a recession when it has two consecutive quarters of negative growth and with the U.K ending the year with one there is every chance now we could start the year with our second and the Pound may drop accordingly.

We will not find out the results for Q1 2012 until April – but if indications are there that this may be negative then Sterling exchange rates may find the next few months very tough – So far in the U.K we have managed to dodge any serious winter conditions, such as the weather we saw this time last year however should it come back and the economy take a hit accordingly then this may be enough to tip the balance.

Of course there are various problems globally that will no doubt hold back many other major currencies, The Euro Zone is also expected to drop back into recession territory as a whole at points this year so there will no doubt be various buying and selling opportunities along the way. Call us today on 0044 1494 725353 should you have an upcoming requirement and let us be that extra pair of eyes and ears on the market for you.

BOE Minutes – How will further QE affect the Pound?

The Bank of England minutes were also released yesterday and the results of which are probably why the Pound did not take a nosedive yesterday. All nine members of the BOE voted in favour of interest rates staying on hold and also, which is key the (QE) stimulus plan to be left on hold for the time being. It looks like the market had slightly priced in further QE in the near term and the fact that not one member was in favour right now should delay further stimulus for another month or two.

When more money is pumped into the economy it generally does weaken the Pound, and regular readers will be aware the mere mention of this does lead to weakness for the Pound, so be aware this will be a hot topic in the coming months.

Federal Reserve minutes and Dollar Exchange rates

Last night the Federal Reserve released their minutes from the first interest rate decision of the year in the U.S. They also tend to comment on economic conditions and how they plan to tackle their economic problems going forward.

In a Statement the Fed state that they expect interest rates to remain extremely low until late 2014 which did weaken the Dollar slightly shortly after the release. Interest rate hikes generally make a currency more attractive to investors and the fact they are planning to keep this low for quite some time may put investors off of putting their money into the USD.

I personally still expect the Dollar to perform well this year due to the problems globally, if you have Dollars to purchase this could be a great opportunity for you as it wouldn’t surprise me to see the GBP-USD rates below 1.50 in the next six weeks.

However, in a press conference later on last night some slightly positive news for Dollar buyers was the fact that Ben Bernanke had stated that the Fed would still be prepared to inject financial stimulus in the near term, which has opened up the door for QE3 in the U.S. This has been expected for some time though so I do not expect this to weigh too heavily on the Dollar.

KEY DATA WATCH: U.S  GDP Data Tomorrow at 13:30pm – This data could lead to a volatile end to the week as it is a key indicator as to how the U.S economy is performing. Expectations are for a reasonable jump in the right direction which could round off the week on a high for the Dollar.

RBNZ Interest Rate decision

The Reserve Bank of New Zealand kept interest rates on hold last night, giving the NZD a little more strength overnight. NZD rates are (like the AUD) closing in on the lowest we have seen in years and there is no guarantee they will be shooting back up again soon, with interest rates staying high and economic data fairly solid you may have quite a wait on your hands if you are awaiting a large movement back.

Data that may affect the Pound Today

Today is extremely quiet on the data front for the Pound and most majors, however do be aware that at any point we could hear news on the Greek debt talks. If so called ‘positive’ news comes from the talks then going on previous movements we could see some Euro strength pushing the Pound back below 1.19 and back out of arms reach of 1.20.

To give you a quick background, we are currency brokers and have been in the industry for years, this site was set up set up two years ago to give clients simple but informative information and now have 20,000 people a month stop by for information.

Last year we had thousands of people get in touch with us through the site, of which hundreds have already used us and we have saved them money over their high street bank or current broker, you can get in touch with us by clicking here and setting up a free, no obligation trading facility to get a quote within minutes….

There is no harm in comparing rates even if you have used someone else for years – Just like buying car insurance you need to always shop around. You can also email me directly djw@currencies.co.uk with any questions or queries.

I look forward to speaking with you.

Good afternoon all,

As I said in my post on Monday today has indeed been by far the most volatilie of the week and as my fellow www.poundsterlingforecast.com writers have said in the last few days… The days of 1.20 did not last long and rates are right back into the 1.19s.

If you have missed the boat then don’t worry too much, rates could shift back up again, however this is not by any means 100% guaranteed!!

I always say that with currency transactions the greedy amoung us end up losing out the most, however I completely understand it is extremely easy to just keep holding out for that little bit extra and many of my clients do, the trouble is if rates then go down again you find yourself caught in a vicious circle desperate for rates to go back where they had been when you could have locked in… a very dangerous and rocky road to travel down!

A word of advice, if you have an upcoming currency transfer then set yourself a target level, if it hits it then buy it straight away and just don’t watch the market any more, more is lost through indecision rather than a poor decision!!

Both the Bank of England and European Central Bank kept rates on hold today, with a member of the BOE saying he felt we had to get more QE (Quantitative Easing) into place, those that are regular readers will know the mere mention of QE has tended to lead to Sterling losing strength, and just the mere rumour of it still carries great force.

The Euro had got weaker due to speculation of a rate cut too which obviously did not happen today, leading to a fight back for the single currency against both the Dollar and Sterling.

To give you a quick background, we are currency brokers and have been in
the industry for years, this site was set up set up two years ago to give
clients simple but informative information and now have 20,000 people a month
stop by for information.

Last year we had thousands of people get in touch with us through the
site, of which hundreds have already used us and we have saved them money over
their high street bank or current broker, you can get in touch with us by clicking
here and setting up a free, no obligation trading facility to get a quote
within minutes….

There is no harm in comparing rates even if you have used
someone else for years – Just like buying car insurance you need to always shop
around. You can also email me directly djw@currencies.co.uk
with any questions or queries.

I look forward to speaking with you.

Ok, so great news for those that have been waiting to buy Euros and unfortunate news for those in the process of selling overseas, but just why has this all started to happen now?

Here is a great article explaining what the current problems are in Europe and also suggesting that we could see yet another rate cut in the Eurozone fairly soon due to potential deflation…. A rate cut is generally seen as negative for the currency concerned and a hike in rates positive, and with the markets moving on rumour as well as fact the mere mention of cuts again has weakened the Euro accordingly – The Greek situation is merely weeks away from coming to a head again too which certainly won’t be doing the Euro much good one would imagine, it seems March will be crunch time for Greece and personally I don’t see there is much left they can do.

It could still take a long time for Greece to leave the Euro as people need to remember in order to calculate a fair value for the Drachma it will take months of tracking rates and a lot of working out, just like when a country has joined the Euro in the past, so nothing is going to happen too quickly on this matter, and Greece leaving may even be seen as positive for the Euro as it is like cutting the rotton part out of the strawberry… To be honest though the whole strawberry is looking a little manky right now!

If you have a requirement to buy or indeed sell Euros, Dollars Australian Dollars, New Zealand Dollars, Canadian dollars, Thai Baht, South African Rand, Polish Zloty, Swedish Krona or any other major currency then please feel free to contact me directly.

To give you a quick background, I am a currency broker and have been in the industry for years, I set up this site two years ago and now have 20,000 people a month stop by for information, and last year had 428 people get in touch with me through the site, of which 401 have already used me and saved them money over their high street bank or current broker, you can get in touch with me by clicking here and setting up a free, no obligation trading facility to get a quote within minutes…. Theres no harm in comparing rates even if you have used someone for years – Just like buying a tv you need to always shop around. You can also email me directly djw@currencies.co.uk with any questions or queries.

I look forward to speaking with you.

Today the ECB cut rates by 0.25% to bring them back to being level with the U.K. This had been widely expected so it didn’t lead to a huge amount of Euro weakness however, in the last 48 hours GBP-EUR rates have indeed shifted up and are nearing a 10 month high for those looking to buy Euros.

The big question on all of my clients lips at the moment (especially those in the middle of a property purchase overseas) is – What shall I do with my money?

The ‘million Euro question’ has no right answer at the moment as  I don’t believe anyone really knows what might be around the corner next…. My personal opinion is not to get too carried away and too greedy, over the last two years I have seen dozens of clients get greedy when rates are going the right way only to see them turn against them drastically and their purchase become more expensive than they even originally budgeted for.

With the risk of sounding like a game show host – Why not at least consider banking half of your currency at a good rate while it is this high, then waiting to see what else happens for your other half. At least then all of your eggs are not in one basket and you have the chance still to take advantage if rates get better yet you do not kick yourself if they should drop away.

Feel free to get in touch with me directly djw@currencies.co.uk if you would like a chat surrounding a potential trade be it buying or selling Euros, or indeed any other currency and I shall be happy to help.

Well what can I say…. I go away for a long weekend and the Pound has slipped away again against the Euro….. The single currency appears to not know how to lay down and give up, and investors out there somewhere are still more than happy to back it.

Tomorrow morning is the next key data due for the U.K and indeed the Pound – further doom and gloom from the U.K could knock the Pound even further against the Euro.

The Pound is indeed still gaining ground against the perceived ‘riskier currencies’ such as the AUD, NZD and ZAR as investors risk appetite declines accross the world, as mentioned before when risk appetite is generally low then the more exotic currencies can tend to weaken…. great news for those of you looking to emigrate further afield!

Personally I feel the Pound will creep up a little further against the AUD, NZD and ZAR in the near term, until some major issues accross Europe at least have reasonably solid solutions in place to resolve them.

Tomorrow will be key for those with Euro requirements be it buying or selling as we could easily see a shift of quite some force surrounding the Bank of England’s release. It would not surprise me to see the Pound struggle again against the Euro and a spanner to be thrown into the works, it is easy when you have a currency transaction to carry out to stare upwards and just hope that rates follw suit, the problem is the currency markets can quite easily nip in your back pocket and steal your wallet whilst you are looking at the sky, and there is no guarantee that they will give it back and rates will return.

If you have a currency requirement imminently or in the coming months then do feel free to contact me directly djw@currencies.co.uk and I will be confident that you receive a much better rate of exchange than using your bank or another broker by using me – So far this year through this site alone 231 people have got in touch and used me personally, joining our growing list of over 40,000 clients here at Foreign Currency Direct.

Breaking news, The European Central bank have cut interest rates to 1.25% which has led to a little Euro weakness… All eyes on the press conference starting shortly!!

Today sees the release of the European Central Bank interest rate decision – New head of the ECB (not jealous of his new job) Mario Draghi has quite a decision on his hands. There have been calls for an interest rate cut in the Eurozone however will he be willing to enter his new position with a bang or will he be looking to get his feet under the table before any big decisions are made?

Personally I feel we have about a 30% chance of him doing so, which should lead to the Euro getting even weaker – however that other 70% option could easily end up with the Euro gaining back some strength as investors may have already speculated that there may be a minor cut.

We still have the continuing Greek crisis which will no doubt still be unfolding and still lead to swings upon releases throughout the day so you certainly cannot rule out a spanner in the works there!

Markets are indeed all over the place at present and it is key you have an experienced currency broker on your side when dealing with any large currency transactions as i’m afraid hope will not move the markets. I am happy to deal with any regular readers that have bank to bank transfers of anything from £5000 up to multi million pound transactions for corporate clients. I can be your eyes and ears on the market and help you develpop a strategy that may save you £1000s.

I cannot directly advise you but it is certainly worth having assistance and a personal opinion of someone that has been in the market for years. If you would like to join our 41,000 satisfied clients then please open a free, no obligation trading facility by clicking here and I will be more than happy to personally give you a call to discuss your requirements. Please ensure you place my name (Daniel Wright) as your point of contact.

To quote one of my fellow traders Sam this morning, “The Government schemes to get people into work to drive us out of economic turmoil are about as useful at the moment as a Blackberry mobile phone.” Both are having a hard time of it lately thats for sure!

This followed poor unemployment figures out for the U.K yesterday, which assisted Sterling in dropping below 1.14 against the Euro for the first time in a couple of weeks after a few minor spikes and some great buying opportunities for those purchasing a property or goods from within the Euro Zone.

This once again highlights how easy it is to keep holding out for that little bit more and to then get caught out. I see so many people do this on a daily basis and if I could give any of you a tip that are in a similar situation, set yourself a realistic target you are happy with and if it gets there – BUY IT.

You can always place a limit order, this tool means that even if your rate becomes achievable at 4am on a Sunday then your currency gets bought out for you – eliminating the risk of you missing out through being unavailable, you would merely receive a phone call upon the limit order being filled asking for settlement under the terms agreed.

If you want more information on limit orders then email me djw@currencies.co.uk and I will be happy to explain them to you in full.

Today we see trade balance figures for the U.K at 09:30am – keep your eyes peeled for this one as further negative data for the the U.K could add to Sterling woes for the week.

The only plus point so far, is the gains against the USD and JPY – The Pound climbed over 1% against the two in yesterdays trading however appears to be slipping back again first thing, we have a flurry of U.S data out this afternoon so this minor spike may be short lived.

Sterling against the perceived riskier currencies has felt the pinch as investors have maybe started to look into carry trading and riskier investments even though in my opnion we are in a market much like 2008 where you just do not know what is around the corner next!

Contact me djw@currencies.co.uk whether you have a currency requirement be it buying or selling any of the majors then I will be able to help you save money over the banks or your current broker, along with ensuring you receive the bery highest level of service to boot.

Tomorrow morning 05:30am - Australian Interest Rate Decision: A big one for those with an interest in buying or sellnig Australian Dollars, no change in interest rates is expected however they have been known to come out and surprise us, the general feeling is we may see if anything at all a minor cut in rates, which would be great news fopr those buying the AUD however by no means is this a certainty, merely a punt.

Wednesday early morning 02:30am – Australian GDP Figures: Once again important figures for Australia in what is lined up to be a busy week for the AUD – GDP figures cover how much the Australian economy grew or shrunk over a specific period of time and could be key should we see any change to predictions. This is another coming out overnight so do not leave yourself open to market fluctuations…. you can place a limit or stop order to protect yourself from market movements, or even take advantage of movements should they go the right way. I have these tools available, email me djw@currencies.co.uk and I will be happy to assist you and explain how these work.

Wednesday Afternoon 14:00pm – Canadian Interest Rate decision: Again no change to rates are expected but be aware that Central Banks have been known to surprise. Canada had poor GDP figures last week and this might lead them to also make economic announcements which could lead to volatility on this currency.

Wednesday Afternoon ??pm – NIESR GDP Estimate (U.K) - The NIESR (National Institute of Economic and Social Research) is quite highly regarded as a fairly accurate prediction for the U.K GDP figures ahead. They are a think tank built up of business leaders and rarely get it too wrong, this release can generally move the market quite a bit and doesn’t always come out at a specific time so be  wary all week that this bombshell could come out at any moment!

Wednesday 19:00pm – Federal Reserve Beige Book (U.S) - This is purely an economic release of plans going forward for the States on battling their economic conditions and any mention of Quantitative Easing is likely to weaken the Dollar. QE is where a central bank essentially prints more money and pumps it into the economy, this can weaken the currency as more of it is in circulation and further down the line it can really  push up inflation, a major case study of this is Zimbabwe where you need a wheelbarrow full of money to buy a loaf of bread these days – not good!

Thursday Afternoon 12:00 & 12:45 – Bank of England and European Central Bank Interest rate decisions - We all know that it is highly unlikely to see a change in the U.K interest rates however all eyes will be on any comments made surrounding the U.K economy and any mere mention of QE (Quantitative Easing) The Europeans however have raised rates twice this year so albeit a tiny one there is a chance they could do this again which would increase the value  of the Euro and potentially take the spotlight off of the debt crisis spreading like wildfire within Europe.

Friday sees some inflationary data for the U.K along with Trade Balance figures, much will change before then though so come back tio the site for more information nearer the time.

If you have an upcoming transfer to make feel free to contact me directly on djw@currencies.co.uk – I can potentially save you £1000s on any transactions be it buying or selling foreign currency, along with offering a fantastic level of customer service. I look forward to hearing from you soon.

My clients continue to ask me just what will happen to the Pound against the Euro and in truth, like major analysts worldwide and the majority of people if I am completely honest you just cannot be completely sure.

What you shoud be doing in this current market is looking at it from an investors point of view, why would you look to invest in either?

The Euro Zone has plenty of problems, and I am still of the opinion that at some point (could be weeks, months or even years the way things are going) something is really going to blow up within the European economies, we have seen signs of it and clearly that things are bad… but there is certainly room for them to get a whole lot worse.

Everything that the European Central Bank are throwing at the problem appears to be a short term fix, and when they run out of options I am sure we will see failures and the Euro weakening considerably as a result. This would stop me being that interested in the Euro as you never know quite when this will happen.

On the plus side for the Eurozone, they have raised interest rates twice this year, an interest rate rise is generally seen as positive for the currency concerned and a cut negative, so this has made the Euro more attractive to investors and in my opinion is the main reason it has kept strong, along with the Chinese and Swiss purchasing large amounts to up reserves and davalue their currency respectively

The U.K on the other hand has not even considered raising rates this year, and may not next year if inflation continues to naturally drop away- this will hold the Pound back in the short term I am sure of that.

What does not help is data releases in the U.K being fairly poor, our Misery Index (inflation times unemployment) being at the highest point in 17 years and our own people deciding to smash their own home towns and cities up just a few weeks ago… the cost for this further down the line will be huge and will surely effect the strength of future economic releases.

My overall opinion is that this pairing will continue to stay in this range as they battle to be best of a bad bunch with the Dollar, what you need to do if you are buying is wait for a small spike in the market and jump on it, before rates get a chance to go back down again.

I can help you save money either way when you do want to buy or sell currency, along with offering fantastic customer service, contact me today djw@currencies.co.uk or fill in the enquiry form on this page