Tag Archives: sterling forecast

How will the Referendum Result Affect GBP Exchange Rates?

Sterling has been on a roller-coaster ride this week, with all eyes now firmly fixed on tomorrow’s EU referendum. The Pound has spiked this week against all the major currencies following a YouGov poll on the weekend, which indicated that the Remain camp had taken a small lead. The markets are in disarray at the moment and we are seeing aggressive spikes off the back of these pre-referendum polls, which are not always a great indicator of the overall opinion.

Personally I do feel we will see a Remain vote but I am not overly confident of this and I certainly wouldn’t be placing a wager on it. I feel the key question now for clients and investors alike, is what is the likely reaction to each result?

I do feel that a Remain vote will solidify Sterling’s position but whether we will see an aggressive move up against the EUR in particular I’m not so sure. I feel the markets are now pricing in the likelihood that we’ll stay and therefore a small rise is possible but I doubt it will be ground-breaking. I think it is far more likely that we will see the Pound nosedive should a Leave vote come to fruition and this is my concern for those clients holding the Pound, who are gambling on a positive result.

Even the Leave campaigners have accepted that there will be a period of economic instability and this is more than likely to heap pressure onto the Pound. Therefore I would be extremely tempted to secure any Sterling positions ahead of the referendum result, which is due out early Friday morning.

If you have an upcoming GBP currency requirement and would like to secure a rate ahead of the EU referendum results on Friday, or are keen to discuss the currency market conditions and forecasts ahead of a future exchange, then please feel free to contact me on 0044 1494 787 478 and ask for Matt.

Sterling’s Struggles Continue Ahead of EU Referendum (Matthew Vassallo)

GBP exchange rates have been on the slide for the past month and despite a slight recovery yesterday following better than expected unemployment data and this morning’s Retail Sales figures, the recent general trend has certainly been a negative one. The Pound has regained some ground against the other major currencies due to the aforementioned releases, with yesterday’s official unemployment rate coming in better than expected at 5%. Today’s Retail Sales figures also helped to curb any further loses but I feel this is no more than a temporary respite for the Pound, which is likely to come under further pressure in the build-up to next week’s vote.

We also had the latest Bank of England (BoE) interest rate decision and subsequent monetary policy statement, with BoE governor Mark Carney once again warning of the dangers the UK economy faces if we do the leave the EU. Whether this warning will fall on deaf ears is difficult to judge but what is clear is that this decision is probably the biggest this country has faced in the past 50 years.

With the latest referendum polls indicating that the Leave camp are now neck and neck with the Remain camp and one even had them ahead, it is likely this uncertainty will continue to build over the coming days. Whilst pre-polls are often fabricated and should be largely ignored, the term no smoke without fire comes to mind. There certainly seems to be a level of support growing and whether this is enough to force an Out vote only time will tell.

Personally I would look to secure any Sterling positions ahead of next Thursday’s vote and protect yourself against what is a volatile and unpredictable market.

If you have an upcoming GBP 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 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

GBP Exchange Rates Remain Volatile Ahead of EU Referendum (Matthew Vassallo)

GBP exchange rates are likely to remain volatile over the coming weeks, with the EU referendum on June 23rd driving the current market spikes. The Pound has seen peaks and troughs over the past few weeks and I expect this uncertainty to continue over the coming weeks. Personally I do not see the June 23rd vote as the end of the sage but possibly just the beginning.

Whatever the result the markets will have to factor in future policies and possible pitfalls and with so much uncertainty attached to the UK leaving the EU, this result is likely to cause extreme volatility and panic for investors. Whilst Sterling would likely take an immediate hit, the knock on effect should also be considered. The markets would have to re-evaluate their entire blueprint, and start to consider a scenario they will not ever really have considered or planned for. The current set up is far from perfect but investors are viewing it as better the devil you know and I have no doubt the Pound will struggle to gain any sustainable support for many months to come.

Looking outside of the referendum and we still have economic data which needs to be considered. It was interesting to note that the Pound gained little support today, despite better than expected Manufacturing & Production figures. We also had the latest NIESR UK Gross Domestic Product (GDP) estimate, which predicted a slight improvement on previous of 0.5% growth. Despite these showing g a more positive outlook for the UK, they did little to boost the Pound, which continues to find life tough going ahead of the most important vote this countries seen for 50 years on June 23rd.

If you have an upcoming GBP 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 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currnecies.co.uk

Sterling exchange rates are struggling for direction, where next for the Pound? (Joseph Wright)

After beginning the week in downtrodden fashion, Sterling exchange rates today have posted some surprising gains once again with the GBP/EUR rate almost hitting 1.29, and GBP/USD trading as high as 1.4655.

I don’t think many would have expected these levels on Monday morning when Sterling was being heavily sold off. The bad start to the week was due to prominent ‘Brexit’ based polls suggesting that the ‘Brexiteers’ have been gaining support as of late, and this uncertainty weighed on the value of the Pound like it has done for much of this year.

Today’s boost was off the back of the latest Halifax HPI figures coming out better than expected, and they demonstrated an increase in house prices of 0.6% which boosted sentiment towards the Pound, driving up it’s value.

This positive sentiment surrounding the Pound today over-road a number of positives for the Euro recently. Firstly Eurozone GDP was recently revised upwards, and yesterday US Fed Reserve Chairlady gave a dovish sounding speech which boosted sentiment towards the Euro.

These examples just highlight the importance the upcoming EU Referendum has and how it’s driving GBP exchange rates at the moment. I expect the relationship between Sterling and the other major currencies to continue to be driven by EU voting (and betting) patterns.

Personally I’m expecting to see further headwinds in the lead up to the Referendum and I personally believe that the Pound is currently overvalued against both the Euro and the US Dollar, and I think we’ll see weaker levels for Sterling exchange rates on the day of the Referendum. 

If you have an upcoming currency requirement involving the Pound and would like to get a better exchange rate than what your bank will offer, feel free to contact me (Joseph) on jxw@currencies.co.uk or call in and ask for me on 01494 787 478. I’m here to help you ensure you make a well informed decision on when to make the transfer, and help you benefit from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.

Sterling on the Slide Ahead of Next Brexit Poll (Matthew Vassallo)

GBP/EUR rates have dropped again during Friday afternoon’s trading, following a brief recovery this morning. The general trend has been negative for Sterling this week, with the latest Brexit poll indicating the Leave camp had taken a narrow lead. This pushed GBP/EUR rates below 1.29 during Thursday’s trading and despite a brief recovery above this threshold earlier today, another drop has seen GBP/EUR move back by almost a cent.

The on-going uncertainty surrounding this month’s EU referendum vote continues to unsettle investors and as such I expect the recent volatility on GBP/EUR rates to continue over the coming weeks.  The Pound had made gains last week following two positive Brexit polls for the Remain camp but I always felt any Sterling strength was unlikely to be sustainable. This proved to be the case after the latest poll released in the Guardian on Tuesday, proved just how fragile market confidence currently is.

Personally I would be looking to secure any short to medium-term GBP/EUR positions ahead of the June 23rd vote and not gamble on the outcome. Whilst any Remain vote may solidify Sterling’s position, I cannot see a major spike whilst the Bank of England (BoE) stance remains steadfast in keeping the Pound’s value under control. However, if we were to see a Leave vote then it is likely Sterling will suffer immediately and a move under 1.20 would be a distinct possibility.

If you have a GBP currency requirement and unsure of how best to secure your currency ahead of this month’s key vote, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one the team for Matt. Alternatively, please feel free to email me directly on mtv@currencies.co.uk

3 weeks to the Referendum!

Exchange rates have slipped dramatically in the last few months as investors fears over the EU Referendum increase. Just what can we expect in the coming 3 weeks ahead of this historic occasion? Well I think it is likely that exchange rates will continue to fall in the coming 3 weeks as we get nearer to the Referendum and the pound is likely to retest the lows that have already been seen this year. The market will have to take account of the possibility of the UK leaving the EU and this will need to be reflected in the price of the currency as we approach the Referendum date. The polls are going to be the main drivers on the exchange rate as we get closer to the event I expect the ranges for pound sterling exchange rates to fluctuate in the recent bands that we have become so used to.

I predict GBPEUR to trade between 1.18 (Leave) and 1.40 (Remain) whilst GBPUSD should trade between 1.33 (Leave) to 1.52 (Remain). GBPAUD will I believe perform in a range of 1.82 (Leave) – 2.12 (Remain). There is likely to be big swings in the coming weeks as we the polls suggest different outcomes. Only last week Remain were leading by 60% according to some, now Leave are in the running at 52% majority.

Making predictions based on these polls is quite frankly very dangerous. The largest polls are only ever sample a few thousand candidates which means they are simply not very representative. The reason the polls got the UK General Election so badly wrong last year was the fact the polls weren’t polling enough of society to really get a true gauge on voters intentions. With this vote being more uncertain than the General Election the scope for big unexpected swings is massive.

The best way to manage the uncertainty is to keep up to date with the latest movements and utilise some of the expertise we have at our disposal including the Limit Order. This allows you to automatically purchase currency once the exchange rate hits a level you have pre determined. A forward contract allows you to fix a level up to 18 month in advance of needing to make a payment removing the risk of future exchange rate fluctuations impacting the value of your currency purchase.

In the words of a great motivational speaker ‘the best way to predict the future is to create it’, leaving everything in the lap of the gods is not normally a sensible strategy when dealing with the currency markets. If you would like to learn more about your options and the process please contact me Jonathan Watson on jmw@currencies.co.uk.

 

 

UK GDP Figures Halt the Pound’s Rise (Matthew Vassallo)

The Pound’s recent rise came to an abrupt end this morning, following the release of the latest UK Gross Domestic Product (GDP) figures. The official reading came out at 2%, which was under market expectation and the Pound immediately lost value as a result.

GBP/EUR dropped back to 1.3131 at today’s low and despite the recent improvement, I still feel the Pound remains in a fragile state. The markets seem to be moving off rumour as much as fact and with the upcoming referendum likely to cause further uncertainty, it is very difficult to predict exactly how things will unfold. Sterling did receive a boost earlier this week following the release of the latest EU poll, which indicated the Remain camp had a healthier lead than many thought.

I did anticipate a move up to the current levels ahead of next month’s referendum and despite the rise I still feel the polls we are seeing are likely to be fabricated. There will certainly be further developments on both sides before the final votes are cast on June 23rd and for this reason I wouldn’t be gambling on another major spike for GBP. It may be that following this morning’s poor data that Sterling has hit its glass ceiling.

We also need to consider the Bank of England’s (BoE) position, which has been to continually talk down facets of our economy, which has diluted investor confidence. They are keen to control Sterling’s value in the hope this will boost exports and ultimately narrow our ever growing trade deficit.

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 0044 1494 787 478 and ask one of my team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

GBP exchange rates open the week flat, will Sterling hold on to it’s recent gains? (Joseph Wright)

With the recent gains made by Sterling exchange rates many may have wondered over the weekend whether they’d missed the boat. Fortunately for those that didn’t take advantage last week, they still have the opportunity of selling their Pounds at surprisingly good levels considering next month the UK public will be voting on it’s political future.

Having hit a 3 month high last week, GBP/EUR is still trading above 1.2900 at the central level and personally I think there could be some short term support at that level as the pair bounced back up above 1.2900 after briefly dropping as low as 1.2893 earlier today. Expect the fears over Greece’s bad debt to help Sterling hold it’s ground although should we hear of a turn in the polls/bookies regarding the EU Referendum next month, I’ll expect GBP to spike downwards against all major currencies.

Earlier in the month GBP/USD, commonly know as cable, hit a 4 month high and since then once again Sterling is more or less holding on to those gains. I think anyone with an upcoming currency requirement involving selling GBP to buy USD should be well aware of how an Interest Rate hike from the Fed will effect the pair, and how likely that hike is likely to occur and when.

Sterling is likely to see weakness in the event of an Interest Rate hike in the US when compared with Sterling, and analysts have currently got an increase in the rate next month at 30% so we shouldn’t rule out those chances. Odd’s are at 60% for September so for GBP sellers, it may be in your best interest to begin organizing your US Dollar purchase sooner as opposed to later.

Major events which could affect GBP exchange rates and potentially erode Sterling’s recent gains consist of Tuesday’s Public Sector Net Borrowing for April, and UK GDP figures on Thursday. Both figures will be held under high scrutiny within the market place and expect big movements should either figure come out far from analysts expectations.

If you would like to discuss an upcoming currency exchange you have to make, and ensure you’re getting the best rates possible with high levels of client security, feel free to get in touch with me (Joseph Wright) on jxw@currencies.co.uk Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call on 01494 787 478 and ask reception for Joseph on the Sterling desk. 

Sterling Rallies Following Latest Brexit Polls (Matthew Vassallo)

Those clients holding Sterling received a welcome boost today, following aggressive spikes for the Pound against a basket of major currencies. Sterling was boosted by the latest Brexit poll, which indicated that the Remain vote was up to 55%. The EU referendum has dominated headlines for many weeks and will confirm to do so up until the vote on June 23rd.

Whilst I was not anticipating any sustained Sterling strength under current market conditions, the fact that we have now had two separate polls indicate a relatively healthy lead for the Remain camp, the markets are viewing this as a major positive for the UK economy. I am still wary about assuming this strength will continue, as I have no doubt we will hear conflicting reports over the coming weeks, which are likely to bring back that market uncertainty. In fact if you think back only a couple of weeks we saw a similar, if slightly less aggressive move for the Pound. Those gains were quickly eradicated on the back of some negative reports and I would be very tempted to secure my position, rather than assume that this positive spike is here to stay.

I am still not convinced that the UK economy is strong enough to act as a catalyst for GBP to continue this run and with the Bank of England (BoE) remaining steadfast in their commitment to control Sterling’s value, for fear of alienating the Eurozone (our largest trade partner). They will be keeping a very close eye on today’s developments and should they need to I have little doubt that they will step in total down a facet of our recovery, with the hope this will ease market confidence in the Pound.

If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movement, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 725 353 and ask one of the team for Matt. Alternatively, I can be directly on mtv@currencies.co.uk

Today is the day!

The outlook for the pound is not very good and today will be further news about just what to expect for the UK and the pound in the coming months and weeks. Uncertainty over the Referendum and worries surrounding recent economic data will become more apparent in the coming weeks and any acknowledgement of the trends by the Bank of England should see sterling slide. The Quarterly Inflation Report is likely to carry the most weight but there is an outside chance of a call for an interest rate cut which would likely cause the pound to lose value.

If you need to buy or sell sterling in the next year the Referendum will have an impact on the pound well beyond the 23rd June. Expectations are for a Remain vote but only just. It is far too close to call and the current levels should not be easily dismissed as we might have a whole different ballgame in 7 weeks time. The best way to predict the future is to create it and we do offer a range of options to help you capitalise on any big swings that we might see.

For more information on getting the best exchange rates and keeping up to date with the latest trends please email me Jonathan on jmw@currencies.co.uk