Tag Archives: sterling forecast

Will the pound keep rising? GBPEUR and GBPUSD Forecast

The answer to this question is probably not. That is because whilst we have just lately had some good news to help sterling find a boost, there are still a number of challenges ahead which sterling will need to overcome in order to remain at this better rates. some of you might laugh at me calling any sterling exchange rate as better but we are much better on most currency pairs than the lows seen only a couple of weeks ago. GBPEUR is now back over 1.20 and GBPUSD has recently hit 1.34. The recent sterling strength is down to two key factors, the appointment of Theresa May and also the lack of any interest rate cut by the Bank of England last week. Theresa May has made clear any Brexit negotiations or invoking of Article 50 are long term so therefore despite the recent bounce for the pound I think economic rather political factors will now play a much greater role on sterling exchange rates. The prospect of an interest rate cut and any QE from the Bank of England (which are predicted for as early as August 4th) could be the big drag between now and Christmas. To learn more on the implication of this on your currency exchange please email me Jonathan on jmw@currencies.co.uk

GBPEUR 

If this happens then the pound could easily retest the lows of 1.15 seen at the beginning of July, I would suggest a new bottom could easily be reached in the lower teens or perhaps 1.11-1.12 but for this to happen there would need to be some very bad economic data and recession for the UK. This lower view was the consensus only last week but financial markets and sterling have benefitted from a relief rally as we avoid the ‘worst case’ scenarios and against their own indications the Bank adopts a more cautious tone.

If the Bank of England surprises markets and fails to adopt any stimulus measures in August and September we could easily see sterling rise higher over 1.20 settling in the lower 1.20’s. There are other factors keeping the Euro weaker including the Italian banking issue plus uncertainty over Greek debt repayments. The Euro is still not performing too well struggling against most currencies except of course the pound. 1.25 seems very distant but couldn’t be ruled out should investor concerns over the Euro flare up again and the pound finds further favour.

GBPUSD

As with GBPUSD any QE or interest rate cut by the Bank of England is the more immediate focus and this would send sterling down to retest the 1.27 level seen two weeks ago. Depending on the amount of QE, extent of interest rate cuts or any worse economic news I wouldn’t be wholly surprised to rule out 1.24-1.25. Some forecasters have GBPUSD at 1.20 by the year end but I don’t think that is likely. Rates of 1.25 ish were on most forecasters predictions but the change of tone from Theresa May’s appointment and the lack of cuts so far has helped the pound.

GBPUSD could easily rise to 1.35 territory if the Bank of England fail to act once again and with the US Election in November investors will soon start to begin pricing in the prospect of a Donald Trump Presidency. Such uncertainty combined with a stable pound could possibly see 1.40 again but as with GBPEUR hitting 1.25, it seems very distant.

If you have a currency exchange buying the pound, Euros or dollars then it makes sense to explore all of your options. Every situation is unique and we offer a free information service to help you plan and manage your exposure to the currency markets. I Jonathan Watson work as Associate Director and Chief Analyst for one of the UK’s top currency brokerages and would be very interested to hear from you and offer some assistance with any bank to bank transfers in and out of the UK for business or personal clients from £10,000 to the multi millions.

For more information please email me Jonathan Watson on jmw@currencies.co.uk, I am very confident I can give some useful insight and if you need it a very sharp exchange rate that will save you money over the banks and typical currency broker exchange rates. Any information is completely free, please email me and I will get back in touch immediateley.

 

Will Sterling’s Recovery Continue? (Matthew Vassallo)

Sterling has gained value against all the major currencies during Wednesday’s trading, following this morning’s official UK Unemployment rate. The figure of 4.9% came out better than expectation and this helped to boost Sterling’s value against the EUR & USD.

GBP/EUR rates spiked back towards 1.20, hitting 1.1990 at today’s high, whilst GBP/USD rates reached 1.3197 before slipping slightly by close of European trading. Whilst the recent improvement for the Pound has been welcomed by many, I’m still not convinced that we will see a sustainable recovery under current market conditions.

The catalyst for Sterling gains was brought about following last week’s decision by the Bank of England (BoE) to keep UK interest rates on hold at 0.5%. This, alongside the political stability bough about by Theresa May’s appointment as Prime Minister, has helped boost Sterling’s value and the key question now is will we see this recent improvement continue and if so will it be sustainable?

Personally I feel the Pound is likely to find life tough going for the most part, at least until we are given a clearer picture of how and when we are going to facilitate our ‘Brexit’ from the EU. This does not mean that the currency will move in a straight line and there will be opportunities for both buyers and sellers but my overriding feeling is that we are unlikely to see an aggressive spike, so therefore it may be wise to protect any short to medium-term Sterling positons and not risk a further downturn, in what has become an increasingly fragile and uncertain 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

Sterling Tumbles Ahead of BoE Interest Rate Decision (Matthew Vassallo)

GBP had spiked this week, providing those clients holding the Pound with some much needed respite. Sterling had made gains across the board, benefiting from some political stability, with Theresa May today being confirmed as the UK’s new Prime Minister. This has helped to alleviate some of the pressure which had been building since the Breixt result and David Cameron subsequently resigning his post as PM.

This market uncertainty has sapped investor confidence in the UK economy and a result the Pound lost a significant amount of value in a very short space of time. Now that facet has been removed it was no real surprise to see the Pound gain some traction but I am still wary of a sustainable recovery under current market conditions. This feeling was underlined by this afternoon’s market developments, with Sterling taking a hit across the board. Whilst the gains from earlier this week are still providing EUR & USD buyers with better levels than they may have expected, it seems as though investors have started to factor in a prospective interest rate cut tomorrow.

BoE governor Mark Carney has been quick to highlight the pitfalls facing the UK economy following the EU referendum decision and has alluded to the fact that we will need some sort of stimulus to navigate the uncertain times ahead. With a rate cut to 0.25% likely either tomorrow or next month and the chance of further Quantitative Easing (QE) being introduced, I expect the recent Sterling recovery to come under further pressure should the scenario unfold as I expect.

If you have an upcoming GBP currency requirement, why not contact us directly. If would like to discuss the current market conditions and forecasts with a currency expert, or simply wish to compare our award winning exchange rates with your current provider, then I can be reached on 0044 1494 787 478 and just ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currnecies.co.uk

Pound spikes upward on hopes of a ‘Soft Brexit’, although Thursday could see another sell-off (Joseph Wright)

Both UK and European equity markets along with the Pound were substantially boosted today, as investors welcomed the removal of uncertainty from the Conservative Party’s leadership contest.

Yesterday it was announced that Theresa May will be the UK’s Prime Minister in-waiting, giving GBP exchange rates a double boost. Political uncertainty almost always weighs negatively on the country in questions currency, so now that we’re aware of who will be leading the country in the period of separation from the EU, the future is looking a lot more certain and currency markets have welcomed the news.

Additionally, Theresa May was a ‘Remainer’ in the lead up to the UK’s EU Referendum. This is significant because markets had received the news of the UK’s shock decision to leave the EU badly, with GBP falling to a 31 year low against the US Dollar. With Theresa May’s public support for the EU in the past many investors are considering her leadership throughout the next couple of years to benefit the UK economy, with the separation of the UK from the EU to remain amicable.

The Pound has been boosted by news of a so called ‘Soft Brexit’ with GBP/EUR and GBP/USD both up over 2% today, but that could suddenly change this Thursday.

During the fallout from the ‘Brexit’ the governor of the Bank of England alluded to the possibility of a further Interest Rate cut down from 0.5% to 0.25%. Should this occur, and it could be a soon as the Monetary Policy Committee’s next meeting on Thursday, then I expect the Pound to fall against most if not all major currency pairs, perhaps wiping out all of yesterday and today’s gains.

Those looking to remove that risk from the market may wish to consider carrying out any planned currency exchanges they have to make, as Thursday could be a volatile day for trading and there’s a chance GBP may fall once again due to the aforementioned reason.

If you would like to discuss your currency exchange with me, and would like to consider taking advantage of award winning exchange rates from one of the UK’s leading regulated currency brokerages as well as help with the timing, feel free to email me directly ideally with a telephone number on jxw@currencies.co.uk with an outline of your requirement. You can also call me directly on 01494 787 478, just ask one of the reception team for Joe.

 

 

 

Pound sterling exchange rates may well get much worse!

The pound has sunk to fresh lows this week in response to uncertainty over the Brexit impact and fears the Bank of England will embark on fresh Interest Rate cuts and even Quantitative Easing in the coming weeks and months. The potential for the pound to slip by a further 4-5% should not be underestimated. I would be very surprised to hear if anyone would be calling the recent lows we have reached a bottom, particularly if we see the movements the markets have been expecting.

The biggest problem in the last few years is low interest rates globally, could the Bank of England be in to cause some shock and awe on financial markets. These events should not be personal but with Mark Carney being singled out by the Leave camp for being too noisy about the potential downsides for the UK economy, he might surely now have a bit of an axe to grind. Of course it would be crazy to suggest the Governor of the Bank of England would act without firm reasons but he must have been annoyed at the suggestions he was interfering with the Referendum.

If you have a transfer to consider making some firm plans in advance is vital in this market. Sterling slipped down to almost parity with the Euro when the Bank of England last cut interest rates. If you need to buy or sell pounds it is vital you understand the full implications of what is happening at present. For more information at no cost or obligation please contact me Jonathan on jmw@currencies.co.uk.

Sterling has in my opinion got further to fall so please speak to me about getting some helpful information and an exchange rate I am sure will save you money.

The Pound Continues to Suffer Following Brexit Decision (Matthew Vassallo)

Sterling remains under pressure across the board, as the fallout from the recent Brexit decision continues to hit investors and client’s wallets alike. With the markets trying to digest and weigh up the damage its already done to the UK economy, the question remains how much worse can it get and when are we likely to see the Pound fight back?

It is clear that the markets have viewed the decision to leave the EU as the wrong one and Sterling’s value has decreased significantly as a result. Whilst the current trend is unlikely to last forever, the main concern amongst those clients holding GBP is that we have not yet seen Sterling’s bottom line.

GBP/EUR rates dropped below 1.16 yesterday, whilst GBP/USD rates hit a 31-year low at 1.2775. With another recession looming and two of the key Leave campaigners jumping ship at the earliest opportunity, I wonder how many of those that ticked the Leave box will be questioning their decision. Regardless of personal opinion democracy has spoken and it must be adhered to but with so much uncertainty hanging over our heads, both economically and politically, I think it will be extremely difficult for the Pound to gain any sustained support in the short-term.

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. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Brexit Uncertainty Hurting the Pound (Matthew Vassallo)

The fallout from last week’s UK EU referendum result continues to weigh heavily on investors and the Pound has found life tough going against all of the major currencies since. With further losses this morning against the EUR & USD, many clients are now wondering how much further Sterling will fall?

Personally I do expect a sustained recovery under current market conditions and with so much uncertainty hanging over the markets, both economically and politically the overall outlook is fairly bleak at the moment. However, this market will change again and whilst the Pound is suffering now we do need to consider that the EUR has taken a huge hit across the board as well. The EU has lost an integral member and with further problems likely to emanate from Greece over repayment deadlines and a possible domino effect of countries considering their own positon as part of the single market, we could see Sterling start to make a recovery sooner rather than later.

Looking at GBP/USD rates and we are currently seeing a fantastic opportunity for those clients selling the greenback, with rates close to the best levels we’ve seen in over 30 years! With the political uncertainty both in the UK & US likely to build as we head towards the end of the year, I would be looking to take advantage of the current levels and not gamble on an extremely unstable 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

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