Tag Archives: sterling forecast

Is a Resolution With Greece Close? (Matthew Vassallo)

Whilst the on-going concerns in Greece continue to dominate headlines, the key question is whether or not a resolution is close? Whilst GBP/EUR rates continue to creep up the uncertainty remains but I do feel a resolution will be found, even if it’s only short-term. Greece’s creditors, in particular Germany, will not want Greece to default on their debts and leave the EUR, so I feel at the moment there is a lot of cat and mouse being played before a likely 11th hour resolution. In fact Greece have now put together a list of proposed reforms, which they hope will help to secure a four month loan extension and keep the wolf from the door for a while longer. These reforms include combating tax evasion and the smuggling of fuel and tobacco but whether these are enough to satisfy its creditors happy is not yet known.

With GBP/EUR rates hitting a fresh 7 year high this week it is clearly an attractive time to purchase EUR and whilst it will take a complete shift in market conditions for the EUR to gain any sustained support, any resolution with Greece, even a temporary one, could be the catalyst for this shift.

It’s a relatively quiet week in terms of economic data, so it is likely that tomorrow’s speech by ECB president Mario Draghi and Thursday’s UK GDP figures will dominate headlines as we head towards the weekend.

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

GBP Forecast, how can I avoid the uncertainty of Greece? Watch out for the election too!

Sterling has risen against most currencies except the Euro in 2015 as UK economic data falls short of expectations. I think it important to note that some 40% of the UK’s trade is with the Eurozone and therefore the slowdown in the Eurozone economy will impact the British economy as well. Making plans in uncertain markets is never a bad idea! The pound could come under some strong selling pressures due to the UK General Election in May, however if selling Euros to buy sterling who is to say how weaker the Euro will be by then!

A Stop Loss order will automatically execute when the rate drops to a lower level than desired (protecting against losses) whilst a Limit order triggers when your desired higher rate is reached. Exchange rates change every second and such contracts guarantee your price even if the rate is just hit for a second. Please email me Jonathan on jmw@currencies.co.uk for more information on achieving the best rates.

GBP/EUR Dips Below 1.35 (Matthew Vassallo)

GBP/EUR rates have dipped below 1.35 during Tuesday morning’s trading, bringing some respite for the single currency. This comes after weeks of recent negativity, which has brought EUR exchange rates crashing down and for a while it seemed as though there was little tangible resistance available to stop this slide, certainly in the short-term.

Whilst concerns over Greece continue to cast a dark shadow over the Eurozone economy, we must remember that the future existence of the Eurozone does not hang on whether Greece meet their debt repayments. Whilst I appreciate the negative knock on effects that a Greek default would have on the region, I do not feel that the Eurozone and indeed the single currency is on the edge of collapse, regardless of what the tabloids would have you believe!

Of course the region is struggling and will continue to economically for many years but I do feel that the Eurozone will be keen to support its member states as best it can. Once the relative PR exercise have run their course then I anticipate an agreement will be reached between Greece & it’s creditors, which will allow an extension on their current debt repayment programme.

Looking ahead and we have a host of key data out for the UK tomorrow, with the latest Bank of England (BoE) minutes and UK unemployment rate. It was confirmed that there are now no members of the BoE voting for a rise in UK interest rates and it may be that we are given further insight into this and other key economic issues. With little Eurozone data of note, it is likely any UK data, including Friday’s Retail Sales figures, will cause additional volatility on GBP/EUR rates for the rest of this week.

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 a current provider, then please feel free to contact me directly mtv@currencies.co.uk

Greek Debt Crisis Continues to Dominate the Headlines (Matthew Vassallo)

Greek & Eurozone officials are still locked in talks but as yet, no agreement has been reached over the repayment of their debt. However, reports yesterday indicated that talks had been constructive and Greek PM Alexis Tsipras was hopeful that an agreement would be reached before long.

At the moment we seem to be at something of an impasse and with the clock ticking, if there is no agreement within two weeks then Greece will not be eligible for a 7bn EUR loan, all parties will surely be keen to thrash out some kind of agreement. This uncertainty is being reflected in the exchange rates, with the EUR struggling to make any impression against almost all the major currencies.

Away from the turmoil of Greece and investors eyes switched to the UK quarterly inflation report, which was released yesterday. This was followed by Bank of England (BoE) governor Mark Carney’s subsequent speech, where he voiced concerns that UK inflation could turn negative in the spring, due to the falling oil prices. Whilst he feels this negative turn will only be temporary, it is hardly news which will bread investor confidence in the UK economic recovery.

Whilst GBP/EUR rates spiked during Carney’s speech, I feel this information is likely to temper any major support for the Pound. He insisted that the BoE would consider cutting interest rates further to counter any threat of deflation and that any chance of a UK interest hike had been eliminated until at least 2016.

Looking ahead to next week we have a host of inflation data out for the UK on Tuesday, along with the latest BoE minutes and UK unemployment figures on Wednesday. These are likely to be key releases and any variation from the expected results, is likely to cause additional volatility on the markets.

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  

Greek Bailout Concerns Continue to Dominate Headlines (Matthew Vassallo)

Concerns over Greek debt repayments is likely to dominate the Eurogroup meeting today, when key figureheads will meet to discuss Greece’s bailout package. The currency markets have so far reacted negatively to the on-going concerns over the Greek economy but with new left-wing government in place these concerns have intensified. It’s the uncertainty over the situation which has spooked the markets, as no one really knows how the situation is going to develop.

Will the Greeks be given any leeway on their repayments considering the Eurozone’s, in particular Germany’s, hard stance on the matter? Will they receive an extension to their loan repayments? And if Greece do default on their repayments will the outcome be? All of these questions have yet to be answered and until they are this cloud of uncertainty and negativity will continue to hang over the Eurozone.

The EUR has struggled to make any kind of impact against Sterling, with GBP/EUR rates breaching 1.35 on the exchange during early morning trading. With the currency pair once again closing in on a fresh 7 year high many will be expecting this trend to continue. However, we do need to consider that Eurozone data has improved markedly over the past couple of weeks and any sort of agreement or resolution between Greece and their creditors is likely to give the EUR a boost.

We also a key day tomorrow for the UK economy, with the latest quarterly inflation report being released, along with an address by Bank of England (BoE) governor Mark Carney. If Carney starts to talk down the UK economic recovery, then we could see the Pound’s momentum halted in its tracks.

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

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

It’s been another volatile week for Sterling, as the fallout from a host of key economic decisions continues. The movement seen on the markets over the past couple of weeks has thrown many investors, with aggressive spikes amongst the majority of the regularly traded currency pairs.

GBP/EUR has hit a fresh 7 year high this week, following the Greek election results and it is likely we will see further fallouts over the coming weeks & months. With the new government’s anti-austerity stance, it is likely the new Greek Prime minister is on a collision course with Angela Merkel and other Eurozone heavyweights, as they attempt to renegotiate their bailout package.

Focus will also be on the European Central Bank (ECB) following their decision to inject up to 1.3 trillion EUR into the Eurozone economy over the next two years in the hope this will counter deflation (when the inflation level falls below 0%) across the region.

It is easy to assume under the current economic conditions that the Pound will continue on its upward curve against the EUR but a word of caution to those holding out for 1.35. The latest Bank of England (BoE) minutes indicated there are no longer any members voting for a UK interest rate hike and this is likely to dampen expectations moving forward. This was a key topic last year and every time it was talked down the Pound lost value and I believe the BoE will utilise this again to try and control Sterling’s value. We also need to look at the UK Manufacturing sector which has slowed during the last couple of months and this could have been a key reason the recent UK Gross Domestic Product (GDP) figures, came out lower than expected.

Personally I feel whilst we continue to trade above 1.30 against the EUR, we are doing better than we should be and I would be tempted to take advantage of the 7 year high, rather than gamble on GBP gaining further momentum.

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

Anticipation in the Markets Ahead of ECB QE Decision (Matthew Vassallo)

The markets are waiting with bated breath ahead of today’s latest European Central Bank (ECB) interest rate decision and monetary policy statement. Whilst the general consensus is that the ECB will keep their base interest rate on hold, it is widely anticipated that the ECB will initiate a series of Quantitative Easing measures in order to counter the Eurozone’s recent deflation.

A report leaked yesterday has indicated they may inject up to 1 trillion EUR. This will be broken down into 50 billion tranches each month, running up until December 2016, almost double the initial estimate. Whether or not this will have the desired effect only time will tell but it will certainly be one of the biggest decisions made since the Eurozone group was first initiated.

ECB president Mario Draghi will outline the ECB’s plans during his address this afternoon and it will be interesting to see how the markets react to this. Personally I feel this decision has been factored in so I do not anticipate a major spike for GBP and it is interesting to note how yesterday’s Bank of England (BoE) minutes indicated there were no longer any members voting in favour of a UK interest rate hike. This decision has likely dampened expectation of a rate rise this year and this is likely to control the Pounds value as investors see this a s a key economic decision.

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

IMF Cuts Global Growth Forecasts (Matthew Vassallo)

Sterling spiked up against both the EUR & USD during Tuesday’s trading, with GBP/EUR rates moving back above 1.31. The pair had dropped from the 7 year highs seen last week and whilst the EUR has found some support around the current levels, any sustained move back under 1.30 is now looking unlikely in the short-term.

GBP/USD rates have also recovered slightly, with the Pound finding support above 1.50 and whilst I do feel this level will be breached at some point in the not to distant future, we will need to see another shift in market sentiment before it happens.

The International Monetary Fund (IMF) has lowered its global growth for the remainder of 2015 & 2016. They have cut this year’s forecast to 3.5%, after previous estimates of 3.8% growth. 2016 sees a similar cut to 3.7% and will dampen expectations of a continued global recovery and what is of more concern is that this prediction has come, despite the huge drop in oil prices which is a positive factor for most countries.

With the markets now focusing on Thursday’s European Central Bank (ECB) decision, when they will decide on whether or not to initiate a series of Quantitative Easing (QE), it is likely that we will see further volatility on GBP/EUR before the week is out. The markets could well be factoring this decision into to the current rates and so any decision that deviates from the expected, is likely to cause further unrest for investors.

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

GBP/EUR Rates Hit 7 Year High! (Matthew Vassallo)

It’s been an extremely volatile 24 hours for the Pound, following yesterday’s decision by the Swiss National Bank (SNB) to discontinue their minimum exchange rate of 1.20 against the EUR.

This caused a huge shift in the markets with GBP/CHF rates moving by over 30% during the day’s trading! It also had a knock on effect for GBP/EUR rates, with the Pound gaining further momentum against the single currency and moving up through 1.30 to a fresh high. This momentum has continued today with GBP/EUR moving above 1.31, providing EUR buyers with the best rates available in the last 7 years.

This morning Eurozone inflation data was released and came out slightly worse than expected, which has helped facilitate today’s rise for the Pound. Moving forward it does seem as if the EUR will continue to come under pressure but I do believe we will see the Bank of England (BoE) step in if this trend continues, as the rising value of the Pound will cause some concern as it could alienate our trade partners, in particular the Eurozone.

GBP/USD rates continue to float in the low 1.50’s but the Pound has found some support around 1.51. I still feel longer-term a move below 1.50 is likely. However, with US Retail Sales figures coming out lower than expected earlier this week, we may find the Pound is supported above 1.50 for longer than we initially anticipated.

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 Inflation Falls to Record Low (Matthew Vassallo)

UK inflation figures were released this morning and showed a sharp fall to 0.5% in December. This equals the lowest figures on records according to the Office for National Statistics (ONS) and will trigger a letter of explanation from Bank of England (BoE) governor Mark Carney to the chancellor.

This level falls some way below the BoE’s target of 2% and a major cause for the drop is attributed to lower fuel prices. However, chancellor George Osborne hailed the fall as good news and the markets have taken it in their stride with little additional movement caused on either GBP/EUR or GBP/USD exchange rates.

With little economic data of note for the UK for the rest of the week, we may find the Pound struggles to gain much momentum from its current position, particularly against the EUR. GBP/EUR has reached the current levels a handful of times over the past 12 months and each time it has the EUR has found support and spiked back towards 1.25. The key date in investors diary will be the ECB monetary policy decision on January 22nd, where we could see full scale Quantitative Easing (QE) initiated by the European Central Bank (ECB).

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

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