Tag Archives: sterling forecast

Sterling Slides Following Draghi Comments (Matthew Vassallo)

Sterling’s value has plunged against the EUR during Friday trading, with the single currency spiking by almost 2 cents at the high. This move has pushed GBP/EUR rates back below 1.40, proving once again how quickly market conditions and sentiment can change. Earlier this week we saw Sterling’s recent momentum against the EUR continue and with mixed reports surrounding Greece the markets seemed unsure which direction to take.

The catalyst for today’s EUR improvement is likely to be European Central Bank (ECB) president Mario Draghi’s comments during his press conference earlier today. He told the world’s central bankers that the current economic conditions inside the Eurozone had improved and it was looking “brighter today than it has done for seven years”. These comments immediately brought market support for the single currency and although the Pound has moved back above 1.40 this afternoon, I do feel the current levels should be taken advantage of if you have EUR to buy.

Despite these losses against the EUR the Pound has held its position against the USD and with rates back above 1.55 the Pound has certainly found some support following a tough couple of months. Cable rates had moved back below 1.50 recently but with uncertainty over when the US FED will raise interest rates, along with an inconsistent run of economic data, the Pound has managed to claw its way back up to the current levels.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

A Volatile Morning for Sterling Exchange Rates (Matthew Vassallo)

It’s been an extremely volatile day for Sterling exchange rates, with huge swings against the EUR, USD & NZD. The Pound was out of the blocks following the opening of European trading, with roughly a cent and a half gained on the EUR in less than an hour. These gains were quickly extinguished however, with the EUR gaining support following poor UK inflation data. The Pound had moved back towards 1.40 against the EUR at yesterday’s high but following this morning’s dip is now sitting around 1.3850.

GBP/USD rates have dropped sharply during Tuesday’s trading, with the Greenback gaining almost 2 cents from this morning’s low. The Pound has benefited from a run of poor US data, which pushed Sterling value up, although after today’s losses it is back below 1.55 on the exchange. It was widely anticipated that the US were going to raise interest rates this summer but this move looked ever more unlikely following the poor US economic data mentioned and this is one of the main catalysts for Sterling’s recent run against the USD. However, head of the FED Janet Yellen tried to downplay fears of poor US growth and even alluded to the fact they could still raise rates this summer. Personally I think this is highly unlikely but even the mere mention of this has helped ease the recent pressure on the USD, bringing some much needed respite.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Economic reality sets in for the pound…

Well it didn’t take more than a week for the economic reality of the UK and sterling to be realised. The euphoria from the Conservative victory has passed as the Bank of England and Mark Carney revised down UK growth forecasts for next year. The prospects of raising interest rates in the UK look to be set out further and further as economic growth falls along with inflation. With the UK economy confirmed to have only grown 0.3%  in the first quarter of this year in the week leading up to the election expectations for sterling to carry on rising look very much misplaced.

Markets unfortunately have very short memories and often overreact to an initial move in one direction with a small kick back as investors take profits. This was definitely seen today as GBPEUR went from 1.4030 this morning to 1.3846 this afternoon. Not good news for all of those Euro buyers hanging on for 1.40!

Economic reality has today set in for sterling and anyone buying a foreign currency who was pleased with positive GBP movers following the unexpected election result, might want to cash in now before it drops further in the future.

For a detailed analysis of your situation and just what to expect when buying or selling the pound please contact me Jonathan on jmw@currencies.co.uk

Sterling’s Value Continues to Rise (Matthew Vassallo)

Sterling’s value has risen again during Wednesday morning’s trading, with the Pound’s recent momentum carrying it through 1.40 against the EUR & 1.57 against the USD. This morning’s spike can be attributed to the better than expected UK unemployment data, which was released at 09.30. Unemployment has dropped from 5.6% to 5.5%, with official figures showing a fall of 35,000, with an overall figure of 1.83 million people now unemployed in the UK.

This improvement helped Sterling continue its momentum from last week, where following a period of uncertainty, the Pound fought back in line with the general election result. There was also further bad news for the Eurozone this morning following the release of their latest Gross Domestic Product (GDP) figures. Figures came in under expectation at 0.4% and this is likely to heap more pressure on the EUR.

We have the latest Bank of England (BoE) Quarterly Inflation report this morning and BoE governor Mark Carney’s subsequent statement and this is likely to prove key as to whether the Pound continues on an upward trend today, or if the EUR can find some market support around the current levels. Personally I feel he will try to dampen expectation as a rising Pound is now what the BoE want. They have already stated their growing concern that UK factory orders are at a two year low, which will only worsen if the Pound’s value continues to rise. I expect the EUR to find support around the current levels in the short-term and looking forward much will depend on how the situation in Greece develops and whether they can meet their debt repayment deadlines.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on mtv@currencies.co.uk

Sterling’s Value Rises Again (Matthew Vassallo)

Sterling has gained value once again during Monday’s trading, following on from the positive spike seen towards the end of last week. This move is a timely reminder to all investors of how unpredictable the currency markets can be, as only a week ago it looked as if the EUR’s momentum was going to carry it back down towards 1.30. Fast forward and GBP/EUR rates have touched 1.40 at today’s high, providing clients with some of the best buying opportunities of the past 6 years.

It is not just the EUR that has taken a hit, as the Pound is up across the board. GBP/USD rates have hit 1.56 at today’s high and GBP/AUD rates are started to creep back up towards 2. The feel good factor following last week’s election is driving Sterling’s value higher, with any uncertainty around the election now removed. Personally I did not see such gains coming quite as quickly but then few had anticipated a Conservative majority. In the end the improvement seen inside the UK economy over the past couple of years has helped to deliver the Tories and Prime Minister David Cameron another term in office.

I do feel that the EUR will find support around 1.40 and I do not expect a sustained move above this level unless Greece defaults on its debt, a scenario I still feel is unlikely to occur. With the EUR still having greater scope for improvement when you consider recent history on the pair, I would look at Sterling’s recent recovery as golden opportunity that should not be missed.

Looking ahead and Wednesday is likely to be a key day this week, with UK unemployment & Eurozone Gross Domestic Figures (GDP) likely to dominate headlines. We also have the latest Bank of England (BoE) quarterly inflation report and this could be key to any fluctuations on GBP exchange rates.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

To what extent will sterling recover in the coming weeks?

Sterling is down against all currencies on political uncertainty arising from the most uncertain General Election in decades. The Tories and Labour are neck and neck fighting to gain any seats to reduce their reliance on other parties in coalition. Just what can we expect for the pound in the next 24 hours and weeks? It looks like sterling is going to fall further whoever gets into power!

Tory Majority – Sterling Positive. As plans on the economy to keep on the current course should help investor confidence surrounding the pound. Although the Tories have pledged a referendum on Europe which could damage business confidence for the coming months and in the future.

Tory and Lib Coalition – Sterling Positive. The Current partnership has reduced Unemployment and is currently in charge of a growing economy.

Tory, Lib, UKIP – Mildly Sterling Positive. Increaeses the chances of an EU Referendum being held sooner than expected which could be GBP negative.

Labour Majority – Sterling Negative. The increased spending plans are unlikely to boost confidence in sterling and fears over the mismanagement of the economy would be rife.

Labour Lib Coalition – Mildly Sterling Negative. The Liberal Influence may be viewed positively by markets.

Labour SNP Coalition – Strongly Sterling Negative. The SNP are likely to seek another referendum on the Union which they are more likely to win than before. The splitting up of the Union could be very worrying for investors seeking certainty on the outlook of the UK.

In short there are many outcomes that may affect your price! To be kept up to date with all the potential outcomes and learn what happens please contact jmw@currencies.co.uk

Sterling Stuttering Ahead of General Election (Matthew Vassallo)

Sterling has taken a hit this week, as the focus switches fully to Thursday’s UK general election. The Pound has performed well against its EUR counterpart for some time, with rates recently hitting a fresh 8 year high above 1.42. Fast forward a few weeks however and the Pound certainly seems to be coming under pressure, with the uncertainty created by the election causing the GBP to lose value. With GBP/EUR rates dipping below 1.35 at today’s low, you can see that we have already lost 7 cents from those recent highs.

Personally I felt the Pound was always likely to dip due to the inconsistent economic data emanating from the UK recently. Add to this the uncertainty created by the election, along with the Bank of England’s (BoE) stance on the matter (they feel the rising value of the Pound has caused UK factory orders to fall to a 2 year low) and it is easier to see why the Pound’s value has diminished. Despite the on-going concerns over Greece, there is a feeling that any resolution there will cause GBP/EUR rates to drop sharply and therefore I would not be gambling on rates moving back up towards 1.40 in the short-term.

Despite these loses against the EUR the Pound has managed to regain some ground against the USD after some heavy losses since the turn of the year. Cable rates have moved comfortably through 1.50, with the pair trading close to their highest point of the past couple of months. This is in part due to the uncertainty surrounding when the US FED will raise interest rates, a move many considered likely as early as next month. This scenario now looks increasingly unlikely and this may well have dampened market expectation in the USD in the short-term.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Sterling Rates Fall Again (Matthew Vassallo)

Sterling has lost further ground against the EUR during Thursday morning’s trading, continuing the trend from yesterday. The Pound has come under pressure against the single currency this week but the reasons for this are not entirely clear as of yet. When you look at its performance against most of the other major currencies, in particular the USD, we’ve actually seen GBP gain ground. GBP/USD rates have moved back through 1.54 and at one stage looked as if the Pound may put pressure on the 1.55 resistance level. Whilst this did not occur, the improvement seen against the USD over recent trading days was certainly unexpected and may be attributed to the rumours that the US FED will not be raising interest rates during the summer.

Moving back to GBP/EUR and it was interesting to note that this morning we saw a run of poor Eurozone data, in particular the Eurozone unemployment rate which came out worse than expected at 11.3%. However, GBP/EUR rates continued to drop, which to me indicates that there is more to this move than general market fluctuation. The two main catalysts in my opinion are likely to be the UK general election, which is now starting to take its toll on Sterling and the Greek debt crisis, which if rumours are to be believed may be moving forward more positively than people thought.

With so much uncertainty over which political party will be in power and therefore no understanding of what policies are likely to be implemented over Europe etc, the Pound was always likely to come under pressure. This is likely to continue for the next couple of weeks and if we do see any sort of resolution with Greece then expect the recent EUR momentum to continue.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

UK GDP Figures Dampen Market Expectation (Matthew Vassallo)

Sterling has had a mixed day on the exchange, with gains against the USD but a fall against the EUR. The latest set of UK Gross Domestic Product (GDP) figures were released this morning and although the economy grew by 0.3%, the figure was under the expected 0.5%. This immediately caused GBP to weaken against its EUR counterpart, with GBP/EUR dropping back below 1.40.

Whilst these figures do indicate a temporary slowdown in the economy, the general consensus is that the UK recovery is still on the right track. Of course any downturn will fuel opposition leaders arguments in the build-up to the election, pointing to the slowdown as evidence that the UK economy is not performing as well as it might. My personal opinion is that whilst I do feel Sterling will struggle to break back through the recent highs, I do not feel the EUR can sustain any sort of run under the current market conditions. Greece is still high on the agenda and with so much negative media coverage, the single currency is fighting with its hands tied behind its back and will continue to continue to struggle in the short-term.

Despite the losses mentioned against the single currency the Pound hasn’t faced the same struggles against the USD, with Cable rates moving up by almost 2 cents from low to high. The pair is now trading above 1.53 and the catalyst for this could be attributed to comments by the US Federal Reserve, who have played down the chances of an interest rate hike in June. Whilst this move was slightly unexpected I do not feel the current trend will continue and as we move through the UK general election and into the summer, I anticipate the USD to put pressure back on the 1.50 resistance level.

If you have an upcoming currency requirement and would like to be kept up to date with all the relevant market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Sterling rises again but for how long?

Exchange rates are like elastic bands, you stretch and stretch until suddenly, “BANG!” and your rate is gone!

I would be so pleased if I was buying a foreign currency with sterling in 2015. GBPEUR has risen almost 15 cents since the start of the year, against the Aussie and Kiwi sterling is at multi years. GBPCAD has been over 1.90 and GBPZAR is comfortably above 18! Is this going to carry on with the most uncertain election in years just around the corner?

Much of sterling’s strength is due to other currencies being weaker. Notably the Euro which has weakened to multi year lows against all currencies. The outcome of all of this could not be so rosy with the election coming up. In short if you are transferring currency in the coming weeks or months please don’t take the current rates of exchange for granted, it could end up very costly. I was working when the last election took place, sterling lost 5 cents in the weeks leading up to the election. The same was true of the Scottish Referendum. Now sterling did recover afterwards but is that really a risk to take? The distinction between those two events and next week’s election is the range of uncertain outcomes.

Even if you don’t need to buy currency just yet making some plans in advance is always sensible when it comes to finance. As a wise man once said ‘A good financial plan is a road map that shows us exactly how the choices we make today will affect our future’. 

For more information on the currency markets and other inspiring quotes please contact me Jonathan on jmw@currencies.co.uk

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