Tag Archives: recession
Crunch time for the UK, will recession be avoided? Exchange rate forecasts (Mike Vaughan)
As my colleagues post highlights opinion in the office is entirely divided. The majority of traders believe a 0.1% figure will be released and this in turn should lend support to sterling exchange rates as a result. I for one have predicted this and hope for a better day pushing GBP/EUR above 1.18, GBP/USD towards 1.54 and GBP/AUD pushing closer to 1.50 – a trigger point for many AUD buyers.
Of course the decision will be a close one and many of those with an interest in the money markets will be keeping a very close eye on the 09:30 release. The office has a range of predictions from 0.1% to – 0.2%. To avoid recession we need to see 0% or better, something that may give the economy a much needed boost. Of late data in the UK has been somewhat better with the only exception retail sales, but these have been affected by unseasonably poor weather, something you cannot legislate for. Today could prove incredibly volatile, should you wish to remove this uncertainty then get in touch early on 01494 787478 or email mgv@currencies.co.uk
Although UK GDP data is likely to dominate today’s trading, other data to watch out for will include the following:
US Jobless Claims at 13:30 – expecting to show a slight decrease possibly lending support to the US dollar this afternoon.
Overnight we have the interest rate decision from Japan – expected to stay on hold at 0.1% and should cause little movement for GBP/JPY but watch out for the Bank of Japans monetary statement that will follow. This will outline the policies the BofJ will have in store and could have an impact on riskier currencies such as the AUD, NZD and ZAR as the JPY is often used in conjunction with these currencies through he use of a carry trade. This is when investors borrow in a low yielding currency i.e. JPY and look for higher grossing currencies such as AUD, NZD and ZAR. It is a risky trade as the exchange rate movement can remove any gains from the higher yield offered and as a result economic sentiment from Japan could adversely affect the riskier currencies. I for one feel further opportunities will be seen for buyers of the AUD, NZD and ZAR in the coming few days and weeks.
To finish off the week watch out for annualised US GDP at 13:30 tomorrow. Expected to show a strong improvement which should drive cable rates back towards 1.51/52 to finish off the working week.
Should you have an upcoming trade to arrange and you would like to discuss the market in more detail and how we can help you achieve a competitive commercial rate of exchange then please get in touch. We are here to help. Please email with your particular currency requirement and I will happily get in contact to discuss your options to help you maximise your trade. Email mgv@currencies.co.uk
Our trading floor predictions for tomorrow – GDP figures and the high/low against the Euro (Daniel Wright)
I thought it may be interesting to quiz a group of traders on our trading floor regarding their thoughts on what we may see tomorrow for the U.K GDP (Gross Domestic Product) figures and where this may put rates during the day against the Euro.
The general feeling appeared to be growth for the U.K – Only just however, below below are the predictions of the traders we polled – if you fancy making your own prediction then email it to me
djw@currencies.co.uk why not see if you can beat the traders, we may even give away a prize if anyone is spot on!
Personally I feel we may see 0.1% growth as expected just about avoiding recession and that the market will creep up a little but will not absolutely rocket as many people do already expect the U.K to just about tiptoe around the R word.
If we are technically back in a recession you would imagine the Pound may drop considerably so it is key to have protection in place if you are close to budget on your overseas purchase – You can place a stop loss order (setting yourself a worst case scenario to be bought out automatically) or book some of your funds on a forward contract (booking a rate for a date in advance for a small deposit) Email me directly if you want a full explanation on these free contract types or just want assistance and the best exchange rates on any currency transfers. Catch me on djw@currencies.co.uk with a brief explanation of your requirements and a number to call you back on and I will be more than happy to help.
Our predictions – Just goes to show how close this is!
| Dealer | GDP | HIGH/LOW |
| JMW | -0.30% | 1.1684 |
| SPE | 0.40% | 1.218 |
| CAB | 0.20% | 1.195 |
| ATR | 0% | 1.1889 |
| THE | -0.10% | 1.1862 |
| MGV | 0.10% | 1.185 |
| JLL | 0.10% | 1.184 |
| CMG | 0.20% | 1.1837 |
| HJR | 0.10% | 1.1811 |
| BMA | 0.10% | 1.1786 |
| AJB | 0.10% | 1.1765 |
| MTV | 0.10% | 1.1631 |
| ASP | -0.10% | 1.1625 |
| TRH | -0.10% | 1.158 |
| PFH | -0.20% | 1.154 |
| DJW | 0.10% | 1.182 |
| HSE | 0.10% | 1.178 |
How will tomorrow pan out? Email me your prediction djw@currencies.co.uk
GBPEUR, GBPUSD rates wary of the first 2013 GDP figures today that could move rates dramatically (Steve Eakins)
Sterling rates have held steady over the last 24 hours near a 18 month low for GBPEUR and 2½ year low for GBPUSD however data today could drive markets could change this dramatically. In fact one piece of data today could drive rates for the next few weeks, it is a key day for anyone with a currency exchange to make. To start the day we have releases from Germany, France and Italy which will drive the euro price followed by UK news at 9:30. The UK news at 9:30 will give us information about the productivity of both the Industry Sector and the Manufacturing Sectors of the domestic economy. Expectations are for a fall to be seen so don’t be surprised if we see the Pound fall against all major currencies in early trading today.
The biggest news however will be from the UK mid-afternoon. At 3PM GMT the National Institute of Economic and Social Research release their forecasts for the Gross Domestic Figures for the UK Economy through this quarter. Importantly Q4 figures for 2012 saw a contraction so if we see another quarter of negative growth the UK will technically be in a RECESSION, again, for the third time. Adding to the recent loss of the UK AAA credit rating, unemployment figures still climbing and calls for a change to the austerity plan in Government there is a lot of unknowing and worry about the state of the UK economy. Recently this has also been seen in another way as the price of our borrowing costs which are all going up, (bond markets.) Government Debt management, so the interest we pay on debts, is expected to be the third largest expense for the government next year. Bigger than Education and the armed forces combined so something to be really worried about.
Why is this important to your currency move? Well this gets reflected in the strength of Sterling so is why rates have been tumbling this year and are expected to fall going forward. (GBPEUR rates are down 7.5% and GBPUSD down 8% since the start of the year.)
So when do I buy my currency?
Well the bad news is that due to the comments above the general expectation is for rates to continue to fall this coming few months, so buying currency or limiting your exposure sooner rather than later might be wise.
The good news is that exchange rates do not move in a straight line so there will be better opportunities for the quick moving clients. Here this is a service that we provide every hour of every day. Informing our client base of SPIKES in the market so a saving can be found. We put strategies together for our clients helping them try and time their respective transfers and this is something we can offer to you. With a host of economic data due this week (the busy days are today and Friday,) I would expect another SPIKE in the near future. If this is of interest to you and you would like to have access to this kind of information feel free to contact us either on the normal number or with me directly at hse@currencies.co.uk.
You can also register your interest for SPIKE NOTIFICATIONS by emailing us details of your situation including; name, contact number, currency pair, volume and timeframe to hse@currencies.co.uk
Look forward to hearing from you.
GBPEUR rates continue to fall but why? (STEVE EAKINS)
GBPEUR rates have fallen dramatically over the last few weeks. Since the beginning of the year if has fallen over 3% costing anyone with a €200,000 purchase £5,000 more. Why?
Well simply put the world is a very different place in 2013 compared to 2012!!!!! Last year there was a concern that the Eurozone would not last most weekends whereas now there is no concern. This has dramatically changed the risk appetite of traders and GBPEUR buyers have been some of the worst hit. The reasons why:
- Firstly as people are comfortable to take risks they buy the euro and this demand is making it more expensive to buy in any currency.
- The pound was at the end of 2012 seen as a safe haven and was invested heavily, this has now changed so people have been selling the pound buying other currencies. The pound is no longer in demand which is making it weaker on the currency markets.
The outlook for the pound in the short term has not changed either, it all looks fairly concerning. We have UK unemployment figures tomorrow, 10,000 jobs are already at risk on the UK high street due to failing retailers so the expectation is poor. On Friday we have UK GDP figures and this is expected to show a weak negative figure. This means the UK was only
out of recession for 1 quarter last year and makes it a real possibility it could re-enter. This would make the UK the only country in the Western World to go into a TRIPLE DIP recession and does nothing to make the currency any more enticing for investors.
This all builds a poor picture for the early part of 2013. So what do you do if you need to buy euros?
Well I would be limiting your risk, using stop loss orders and keeping a close eye on the markets as there will be better times than others. Here we provide a proactive service helping you trade at the high of the markets plus offering AWARD winning exchange rates. Simply put if we could not save you money, even in this expensive market, we would not
exist. Get in contact to compare your current prices and see how much you could save.
If you would like updates on the market, register your interest by emailing your situation (contact details, currency pair, volume and timeframes) to hse@currencies.co.uk
Thank you,
Steve Eakins
Elite trader
Pound Euro – Spanish news
Over the last week pound exchange rates have remained fairly flat with little movement however this changed yesterday when the Euro gained nearly a cent. This created the best time to sell Euros in nearly 2 months, trading at the high compared to the low yesterday would have made you over £500 more for every €100,000 sold back. This market movement was down to a sudden demand for Euros by city traders and again shows how quickly you need to be to take advantage. If you need to complete an exchange and would like to trade at the best price, register your interest via email hse@currencies.co.uk
Over the next week I agree with most specialists that Spain will become the main story;
- Their Stock markets are at a near 20 year low,
- Unemployment is at a record high
- Their banking system is failing
- Data showed yesterday their economy shrunk by 1.3% in the second quarter of 2012
- €72 billion was taken out of Spainish banks last month
It does not paint a great picture especially after the country’s most economically important region, Catalona, said it needed a €5 billion rescue package from Madrid. Even the Spanish deputy Financial Minister said that “the worst is yet to come.”
The Bank of Spain estimates it may have up to €180 billion in bad debt which many think may be more than can be raised. As a result I would expect GBPEUR to have a range of 3 cents from current levels over the next few weeks in either direction.
Please don’t just assume it will push GBPEUR up as we are unsure whether the UK will have to contribute to the bailout.
If you are exchanging currency contact us today and we can pro-actively help you try and catch your target rate. Either email me at hse@currencies.co.uk or contact me Steve Eakins on the normal number. Simply put if we could not help save you money we would not be in buisness so what have you got to lose? If you have a curerncy requirement please feel free to make contact.
Sterling gains against the Dollar, Flat against the AUD and NZD and also loses against the Euro
The Pound has had a mixed day today gaining ground against the U.S Dollar yet losing against currencies such as the Euro and South African Rand. Rates have remained reasonably flat against the Australian Dollar and New Zealand Dollar which are usually fairly volatile currencies.
We saw that Deutsche Bank expect Australia to fall into recession in 2013 which may mean that it is coming to crunch time for those of you holding out that still have Australian Dollars to sell. here is a link with that story: http://online.wsj.com/article/SB10000872396390443855804577602552781925554.html
Head of the European Central Bank Mario Draghi has backed bond buying plans by the European Central bank which has led to a little Euro strength over the day and also is more than likely why we have seen the Pound gain ground against the U.S Dollar as investors have probably gained back a little confidence in the markets following these comments, pulled out of their ‘safer haven’ investments such as the USD and put them into riskier investments such as the South African Rand.
A decrease in demand for the Dollar following this of course then weakens the currency which may be why we have seen such shifts in trading today.
Tomorrow the most important release on the markets is in the form of the FOMC minutes over in the States, basically the minutes from the last Federal Reserve Interest Rate decision which may involve the discussions around QE3 (Quantitative Easing) and could lead to some overnight volatility depending on what has been discussed.
QE is generally seen as negative for the currency concerned however this has been fairly common knowledge that we may see QE3 at some point in the future so mentions of it being put back may actually strenghen the Dollar.
The most important release for the U.K this week is GDP or Gross Domestic Product figures out for the U.K on Friday, expectation is to see a revised figure to be slightly better for the U.K which may give the Pound a slight boost at the end of the week so if you have a foreign currency you are looking to sell then tomorrow and Thursday may be your opportunity.
For a free analysis of your position and what may move your rate of exchange in the coming weeks and months please feel free to speak with me Daniel Wright directly on 01494 787 478 or you can email me on djw@currencies.co.uk I welcome private and corporate clients of any size so do feel free to contact me today.
The slightest change in exchange rates can make quite a difference to the cost of an overseas property or the amount you will get back from the sale of one, get in touch with me today if you are in a position regarding overseas property and I shall be more than happy to assist you.
GBPEUR when to trade?
Euro rates have climbed for the last 2 trading sessions as data from the UK improves and Europe continues its August month of silence. This silence however is expected to break next Tuesday when we have the Europeans tell us their GDP figures for the last quarter. Expectations are already the fact that they will show an improvement, even with all the bad news recently about Europe and the risk that France could re-enter a recession. This is because it is for the last quarter not the coming quarter. As a result I would be surprised to see rates stay as high on the day.
Yes the Europeans are releasing bad information currently for last month and this as a result will hurt future GDP figures so euro weakness is expected in 3-6 months’ time but in the short term I would be very wary if I wanted to complete a GBPEUR trade, whether that be for a completion of a property in the sun or a business invoice.
Other topics to be aware of for a 6 month forecast, up to the end of the year is that it is in the UK’s interest to have a weak pound. This is as a key policy for growth is from exports which are very unattractive with the current strength of the pound.
So when do I buy euros
- If I was buying within the next 7 days I would consider moving on Tuesday morning.
- If I was buying within the next 2-3 months I would be very wary, I would not be surprised to see GBPEUR down at 1.23 over this time.
- If I was buying by the end of the year again I would be wary, happy that it was going to climb but I would be ready to move quickly i.e. use a FORWARD CONTRACT
I’m selling euros, when shall I sell?
- If within the next week I would wait till Wednesday and see what happens
- If within the next 3 months I would personally move in the near future on this expected news.
- If we I had until the end of the year I again would be poised to move with a FORWARD CONTRACT.
As you can tell the general theme is making sure you are ready to move PLUS using the right provider to get you the best price. These are two areas of both focus and passion here at Foreign currency Direct PLC, We have won a number of industry specific awards in both cases for exchange rates and service so if you have a currency exchange to make I am 100% sure we are in a position to help.
End of sales speech, but really what have you got to lose other than a 2 minutes conversation that could realistically save you £1,000’s?
Hopefully you find these blogs of use – For more information or to make sure you are getting the best exchange rate either call us today on 01494 787 478 and ask for myself STEVE EAKINS, or contact me directly via my email HSE@Currencies.co.uk
Olympic opening Ceremony sums up that Britain is indeed great – And anyone based in the U.K that saw the amount of people queuing for Euromillions lottery tickets on Friday do you believe we are deep in recession?
The scene was set and the script was written for the London Olympic opening ceremony to be a shocker… Surely something would go drastically wrong as the eyes of the worlds media watched eagerly for a large error. In fact in my opinion the whole thing was absolutely brilliant and showed what a fantastic force we are and bought a great deal ofjoy and confidence to the U.K as a whole.
Just before the start of the ceremony we had one major rush for Euromillions lottery tickets – Everyone I know bought lots and lots of tickets and every shop I went past on my home had people queuing out of the door, along with that most offices had syndicates running and there was a great buzz as to celebrate the Olympics 100 millionares were going to be made in the U.K as part of a raffle, along with a top prize of over €100,000,000. Needless to say I didn’t win the top prize or indeed become a millionaire but I did manage to get a whopping £45!
The point of all my gabbling on is that I think there are much better economic data figures to come from the U.K in the coming weeks and months, more than likely August/September should be a little more positive compared to what we have seen over the past few months which hopefully should lead to Sterling gaining back a little ground against most of the majors.
This is purely my opinion and I don’t know what is going on behind closed doors… With the Bank of England Interest Rate decision due out on Thursday anythnig can indeed be thrown into the mix.
Should you have a bank to bank currency transaction to carry out either imminently or in the future then I can personally help you. I deal with private and corporate clients and offer not only award winning rates of exchange but an award winning level of customer service to match. Email me today djw@currencies.co.uk if you would like assistance and I shall be more than happy to call you back, If you just want updates for now then feel free to join our mailing list by filling in the form at the top right hand side of this page.
U.K in a recession – Well for now anyway.. Why is the Pound still strong?
We saw surprise figures out for the U.K yesterday that many analysts and indeed everyone who writes for me on this site were not expecting. With such a negative release just why has the Pound managed to continue its rally against the majority of majors?
The figures released yesterday do not include all of the data for the first quarter of 2012, and are due to be revised twice in the next two months and by the look of things we could quite easily see these figures revised back up again in these revisions, as the majority off the data already out is construction based and there is still an awful lot of more positive data to be included.
The Federal Reserve last night carried out their monthly interest rate decision and press conference following it and managed to weaken the Dollar once more which has led to over 5 month highs for those looking to buy Dollars or AED as this curreny is indeed pegged to the U.S Dollar.
Personally, I still feel (and I know I seem to always be positive) that the Pound will have a good year this year… We may not see rapid strength but I would not be surprised to see it continue to creep up against the majority of majors, maybe taking a slight knock along the way. By no means do I expect to see us reachj the dizzy heights of a few years ago yet as there is still a huge amount of work to be done.
If you have a pending currency transaction to carry out it may be prudent to get in contact with me directly, I have worked in the industry for years and carried out currency transactions for thousands of clients, saving them money over their bank and/or current broker whilst offering an extremely efficient and proactive service. If you wish to get in touch email me directly leaving a brief message and contact number on djw@currencies.co.uk or if you are a long way off needing help then feel free to join our mailing list by filling in the form on the top right hand corner of this site.
U.K back into recession!!!
Just when it all looked a little too good to be true as always something came back to completely knock the Pound this morning. Sterling had been at a two and a half year high against a basket of major currencies until 09:30am this morning when we saw Gross Domestic Product figures come out at a much worse than expected -0.2%.
What does this mean?
This is not great news at all for the U.K economy, many economists thought we would see a slightly positive figure and it looked like this was priced into the market so we have seen the Pound drop away against all major currencies in early morning trading, great news for those selling a foreign currency and terrible news for those with the need to buy foreign currency.
The Pound has not taken as much of a hit as one would have expected even following this news so I don’t think it is all doom and gloom and many other economies globally are indeed in deeper waters than the U.K but it will hold back the Pound ever so
slightly in the near term.
If you have an upcoming transaction to carry out feel free to contact me directly and I will be happy to help you get the best rate and a fantastic level of service. djw@currencies.co.uk
