Tag Archives: Sterling exchange rate forecast.
Sterling continues to strengthen against the Euro and riskier currencies but declines against the safe havens like the USD & CHF
It has been a very mixed day for sterling exchange rates against a host of major currencies. While sterling has been strengthening to fresh highs against the riskier currencies (THREE AND A HALF YEAR HIGH AGAINST THE EURO, 2.0567 AGAINST THE KIWI DOLLAR, 1.6049 AGAINST THE AUSSIE DOLLAR, 12.9315 AGAINST THE RAND) it has weakened against some of the safer haven currencies(1.6066 AGAINST THE US DOLLAR, 1.4895 AGAINST THE SWISS FRANC)
Now for the pound, economic data seems to be making very little difference to how the exchange rate performs. Late last night retail sales data showed a decline over the course of the year. This had little effect on the excellent gains the pound has recently made. Most clients that have an imminent exchange are though capitalising on the improvement for sterling especially as we have another big announcement by the Bank of England tomorrow. We are not expecting much out of the interest rate decision but we must always be wary of the dreaded QE scenario. If more than 50% of the members do vote in favour of QE then sterling could weaken slightly. You may not want to take this risk with the excellent rates compared to a month ago and you are more than welcome to contact me at bma@currencies.co.uk before the decision so we can help you make a saving over your high street bank or any other broker that you may have used in the past. Just ask for Ben and I will make sure that I answer your enquiry as quickly as possible.
Looking forward there is always the chance that sterling could continue its trend of rising against the Euro and the southern hemisphere currencies but I feel it will be fairly range bound against the USD and CAD. If you need to SELL any major currency to buy sterling I would be very cautious and fairly worried. The way the pound has performed if the trend continues your losses really could add up. If you are sitting on Euros for instance hoping that the market will reverse and drop back below 1.20 I think it is extremely unlikely and you may be prudent to move sooner rather than later as the losses may continue.
If you would like to speak with me regarding any currency pair we can look at the options that are available to you to help you maximise your exchange. The authors on this site work for one of the largest currency brokers in the UK. We have been trading for over 12 years and have assisted thousands of clients make significant savings. If you have never used a broker and would like more information on the personal service that we provide please do feel free to email me. If you have used a broker in the past then challenge us to help beat their rate so you make an even bigger saving over the high street banks. You can contact me (Ben Amrany) at bma@currencies.co.uk and we can then look at the currency pair in question to help you decide when is a good time to convert your funds.
Ben Amrany
Forecast on data releases that could effect GBP, EUR, USD, AUD & NZD rates.
Good morning readers,
With lots of data out today and tomorrow for the UK and other economies we will take a look at some of the releases and how it may affect your upcoming currency requirement. Scroll down the list to find the currencies that apply to you. If at any time you would like to speak with me regarding your future currency exchange then please do contact me at bma@currencies.co.uk
AUD - The first data release of the day was down under in Australia. They had their GDP figures released just after midnight and it showed a contraction in their economy. Now because their economy slowed more than expected it has increased the likelihood that the Reserve Bank of Australia (RBA) will cut interest rates again to bolster demand. This caused some AUD weakness overnight with the rates moving from 1.4861 to 1.4957.
Moving forward the RBA are under increasing pressure to weaken the Aussie Dollar as it is harming their exports. If further bad data comes out of Australia like employment figures then you will find that there will be further speculation of rate cuts which will continue to slightly weaken the Aussie Dollar. If you have Aussie Dollars to sell I personally feel that with the current high levels against a range of other currencies you may miss the boat if you do not act fast. If you require buying Aussie’s in the near future hold tight as i feel that mid 1.50′s is around the corner. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
EURO – At 11.00 this morning Germany are releasing their factory orders and expectations are that we will see a big contraction on the previous months figures from 1.7% down to 0.5%. If the figure comes out at 0.5% or better then I will expect to see the Euro show some signs of strength.
The big story though is still Greece. Although starting to get very boring it will have a massive effect on Euro rates over the next month. The private sector still need to formally agree their debt swap which is meant to take place on Thursday and only once this is done can Greece agree to activate the 130 billion Euros. Then all eyes will be keen to see if they can meet the part repayment by the 20th of March. Any problem fulfilling the agreement could lead to a disorderly Greek default and potentially trigger further problems across the Euro Zone in Spain & Italy.
With an interest rate decision also looming tomorrow it will be very interesting to hear the comments that come out from super Mario the head of the ECB straight after the release. The markets will be listening very closely to his words and this can bring some of the most volatile times to GBP/EUR & USD/EUR rates. I would expect to see a range bound going forward from 1.1750/1.2050 for GBP and 1.29/1.3250 for the USD over the next couple of weeks. If you are buying or selling the Euro and you can achieve these levels or better I would capitalise. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
USD – For the US today there are a fair few data releases out from Mortgages approvals to the consumer credit change. The most important though for those with an actual exchange to make will be at 13.30 today in the form of the Nonfarm productivity. This shows the output per Hour of labor worked. Non-farm Productivity indicates the overall business health in the US, which has an influence on GDP. The level is expected to decline to 0.8% for Q4 last year.
You may have witnessed over the last few days that the USD has started to strengthen again. It has moved against the pound from 1.5950 down to 1.5709. The ongoing issues in Europe are once again benefiting the USD as the Dollar is being used as a safe haven option once again. With the Greek issue not yet sorted this trend could continue. This year the pound has been as low as around 1.5250/1.53. With sterling still trading at 5 cents higher now may be a good move to capitalise before we potentially see any further Dollar strength. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
NZD – At 8.00pm this evening the Reserve Bank of New Zealand (RBNZ) will be announcing their interest rate decision for this month. We are expecting rates to be held at 2.5% Sterling exchange rates have significantly strengthened by 10 cents in the last few weeks. Sterling spiked to above 1.94 yesterday but is today back down at 1.9240. Like in Europe straight after the rate decision the governor of the RBNZ Alan Bollard will give a speech on the state of New Zealand’s economy and what their stance is on any future policy. The markets will keep a close eye on this and there could be some volatile times during the speech. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
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A busy week of data for sterling exchange rates
Last month saw sterling lose over 4% vs the euro, 1.8% vs. the US Dollar, over 6% vs the South African Rand and Aussie and Kiwi dollars.
There were several key event including the earthquake in Japan, and problems in the Middle east that overshadowed market data making the markets even more unpredictable and volatile than normal. However the main driver for sterling remained interest rate expectations. The MPC in the UK had been expected to hike base rates 0.25% in May, but that has now been set back to August and looks unlikely to happen even then in my opinion.
This month economic data releases may drive the market a little more than in March, so if you have a transfer to make, keep a close eye on these releases. To discuss anything in more detail, fill in the form on the right and you can speak to a currency specialist.
The key data this week for the pound starts with Halifax house prices – due out overnight Monday. This could have a knock on effect to consumer sentiment and the knock on effect can affect retail sales data if figures are really bad.
On Tuesday at 09:00 we have purchasing manager index data- a measure of inflation, that can affect interest rate expectations. As this was a key drive in the weakness of sterling last month it could be an important piece of information for the Pound’s short term future.
On wednesday we have a host of manufacturing and industrial production data at 09:30. The manufacturing sector has performed well in the UK over the last 2 years which is surprising considering our reliance on financial services. However, the weak pound has assisted exporters helping manufacturing organisations in the UK.
Thursday see possibly the most important release of the week, with the Bank of England minutes at 12 noon. A surprise hike could really help the pound spike in value, however that looks highly unlikely as economic growth in the UK has slowed dramatically over the last 6 months. Couple this with the austerity measures, from which public sector job losses came into effect and the end of March, and the uncertainty over the economy looks set to lead the BoE to leave interest rates unchanged.
Currency market data that could cause exchange rate volatility this week
Last week we saw serious volatility on the currency market ultimately allowing the pound to make some good gains across the board. Key gains from previous week lows, came against the Euro +1.66%, the US Dollar +4.9%, and the South African Rand +2.83%.
This week there are several key releases to look out for from the UK, US and EU. Whether you are buying or selling sterling all could move the market and affect your transfer.
Today UK house price datafrom Rightmove today has caused a little sterling weakness, reminding the market of the fragile state of the housing market. Meanwhile inflation data from Germany above expectations has caused a little single currency strength. It is Presidents day in the US so there will be limited volume exchanged this afternoon as the US markets are closed.
Tomorrow the key data from the UK is Public sector net borrowing at 09:30. This has been a key issues for the Government and expectations are for a far lower figure than previous. this could cause sterling strength if it looks like the coalition are bringing borrowing under control. At 15:00 US consumer confidence could cause USD movement, expectations are for a higher figure than last month, for me this could be a little ambitious.
On Wednesday at 09:30 we have the Bank of England Minutes, these could be huge for sterling as there has been massive speculation surrounding interest rate hikes in the UK lending support to the pound. The breakdown of how the member voted may sheds some light on how likely a hike in interest rates is.
At 07:00 on Wednesday we have German GDP data, and from the US at 13:30 jobless Claims. The latter is renowned for causing volatility as the release can differ dramatically to expectations as the US labour market is so vast.
We round off a busy week with UK GDP at 09:30 and US GDP at 13;30 on Friday. UK figures will be carefully watershed by speculations and investors following 2010 Q4′s shocking GDP data showing a contraction of 0.5% in the UK economy. Another quarter of negative growth would mean that the UK is officially back in recession, so this months figure could give some insight into the likelihood of this. There is also some speculation that Q4 could be revised upward therefore lessening the chance of a double dip recession.
Sterling exchange rate volatility as mortgage data causes weakness
The pound has experienced volatile trading this morning, peaking early on at 1.1870 vs. the Euro and 1.6111 vs. the US Dollar, following higher than expected manufacturing inflation figures. This lent support to investor speculation that UK interest rates will be hiked during the first half of 2011.
However, a stark reminder of the fragile nature of the UK economy was bought to the attention of those investors when UK mortgage approvals for December were announced. The figure was 4% worse than previous and highlights the fact that although a hike may help curb inflation it would seriously hamper the UK economy. As a result the pound has weakened a touch as some investors price out a rate hike.
Current sterling exchange rates appear to have the strong possibility of a hike priced in, this means that if rates are kept on hold and this expectation proves to be wrong, the pound could fall away. As a result current rates to buy foreign currency and sell sterling, broadly speaking, may be a lot more favourable now than average levels over the next 3 months.
Currency forecast and how a broker can help you
Sterling has made gains against the Australian Dollar and Kiwi Dollar this morning following some less favourable news from down under. Interest rates in NZ were expected to go up 0.25% this month but that now looks less likely which has weakened the NZ Dollar. In Australia consumer price index (inflation) can out below expectations. This reduces the chance of an interest rate hike (rise) and there fore has weakened the Aussie Dollar.
Against the US Dollar and Euro sterling has lost a small amount but is holding relatively firm at present despite Mervyn King (BoE Governor) speaking to the Treasury select committee at the moment. King has tended to have had a negative effect on the pound in the last 18 months as he has been quite negative when discussing the outlook for the UK and sterling.
The pound sterling forecast website has been running for just over a quarter of a year now and we have built up a big following in that time. I have also spoken with many people who have been following the site and subsequently saved them money on their currency transactions. I would imagine that most people reading out posts and forecasts will be carrying out a currency exchange, or at least considering one. If this is the case, then to find out how you can make a substantial saving on your transfer, do fill in the enquiry form on the right of the page. One of the PSF currency dealers will be in touch to explain more about the service, it may even be me!
Sterling Exchange rate forecast for July
It was a busy week for sterling last week as we had a host of data out. We saw a fair bit of volatility throughout trading with the pound ultimately strengthening over the course of the five days. I expect to see some sterling strength today after the British banks passed the European stress tests and strong UK GDP figures on Friday. GDP data showed the economy grew by a faster than expected 1.1% in the second quarter of the year, almost double the 0.6% prediction. Initial reports suggest that much of the growth came from the service sector, which is key to the UK economy so this could be good next for sterling exchange rates looking ahead.
As a result of this positive news current exchange rates are up 3.2% v’s the Euro and 3.8% v’s the US Dollar from the lows this month. this translates to a big difference for anyone looking to buy US Dollars fore example. On a £200,000 transfer buying at the high compared to the low in July, you would get an extra $11,000.
If you have a currency transfer, particularly if you are buying US Dollars, now could be the perfect time to buy on spot, or lock into a forward contract. Filling the form on the right if you would like further information about these contracts. Looking ahead we could see the USD weaken further allowing the pound to hit the high 1.50’s if we see further poor economic data from the states.
Stress Tests and Euro Rate Forecast
Over the last few month she banking problems in Europe have caused a great deal of uncertainty with investors. Stress tests were carried out in order to increase confidence and the results were released at 5pm on Friday. The tests showed that 7 of the 91 banks failed including 5 from Spain.
All the UK banks passed which could lead to sterling exchange rate improving, couple this with Spanish banks failing we may see some Euro weakness during trading today. It will also be worth looking out for further examination of the tests themselves, as there is some speculation that they not hold a great deal of credibility. If the markets don’t feel confident in the tests, it could have a negative effect on the Euro as there would be more uncertainty surrounding European Banks.
