Tag Archives: sterling forecast

UK GDP Figures Released This Morning (Matthew Vassallo)

UK Gross Domestic Product (GDP) figures were released this morning and the figure of 0.7% growth came out as the market expected. We’ve seen a dip for Sterling against a basket of currencies and many investors are now trying to gauge whether this is just a short-term loss, or something more significant.

The Pound has struggled for the most part this week and it does seem as though its momentum has halted, after weeks of positive moves in the market. I still feel it is likely to find support around the current levels, as we have seen a steady run of economic data emanating from the UK for some time. However, whether we will see it recover all of the recent losses against the USD & in particular the EUR, is difficult to gauge under current conditions.

With the uncertainty surrounding Greece still hanging over the markets, despite the recent debt deal being agreed, we may have to wait to see how the situation develops there before the next major move is made. Any further negative developments are likely to push the Pound’s value back up but personally I feel it will struggle to move back above 1.40 unless there is another breakdown in negotiations.

We also need further confirmation of whether the Bank of England (BoE) will raise interest rates sooner than the markets expect, again news that if confirmed is likely to benefit the Pound.

We’ve seen Cable rates drop below 1.54 this morning and again it does seem as if the USD is winning the battle at present, due to the likelihood that the US FED will raise their interest rate before the BoE does. GBP/USD rates have remained fairly stagnant over the past couple of months and I cannot see a major improvement for Sterling unless the BoE surprise the markets with a rate rise in the last quarter of this year.

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

Chinese impact on the pound! Will sterling keep falling now?

The Chinese impact on sterling exchange rates has been fairly pronounced with exceptional volatility on the stock market and also the pound. Essentially the worries in China have stoked fears that the UK will not be raising interest rates any time soon, perhaps for years! This has weakened sterling as investors seek alternative investments with their money. The volatility in the market is truly exceptional as everyone awaits China’s next move which could very easily tip the scales one way or the other. I expect the pound is going to continue to suffer and that anyone who needs to buy a foreign currency with the pound should move sooner rather than later.

What happens next will be largely determined by the Chinese who are key to making an impact on financial markets. If you wish to buy or sell the pound please get in touch with us to learn more about the latest forecast. Economic data has been quite positive for the pound in the last month increasing expectations the UK would raise interest rates. However the latest Chinese developments have really upset this balance presenting an amazing opportunity to buy the more risky currencies such as the Rand, AUD and NZD.

We are currency specialists here to assist in the planning and execution of your currency transfers. If you wish for a quote please fill in the form and we will be in touch immediately to work with you to help you get the best deal. Please contact me Jonathan on jmw@currencies.co.uk to learn more.

Shares continue to plummet (Joshua Privett)

Sterling continues to lose value as financial markets go into turmoil. Since markets opened this morning the Pound is already 1.5 cents down against the Euro and looks set to continue sliding. Stock-markets in London opened 3% down already, with value evaporating rapidly.

Panic concerning the Chinese economy has caused a mass sell-off of shares, as investors are nervous that their assets will continue to be devalued. This atmosphere on the markets has completely changed the outlook for raised interest rates in the UK and US economy. Raising rates when it will be difficult for banks to make returns on a weakening global market would be self-destructive behaviour. Furthermore, low rates are considered a buffer against negative external market forces on a domestic economy, encouraging people to spend and keep the economy running from the inside.

Much of the recent run of Sterling and USD strength has been based around this accepted fact that they will be the first nations to raise rates in the Western World since the financial crash. This spanner in the works has likely added another 6 months/1 year to the timeline. Sterling’s value has deflated, and the Euro has benefited from investors moving away from Sterling and the USD searching for short-term returns.

I would strongly suggest those with Euros to buy over the next month to get in contact immediately for a free quote on their transfer. We will likely see 1.35 on the markets by the end of trading this morning, and this situation in China is not a short-term phenomenon. Call me on 01494 787 478 and ask Joshua – quote this article to receive a free quote on your transfer and tailored advice for your own situation. jjp@currencies.co.uk

Sterling on the Slide! (Matthew Vassallo)

Sterling has taken another hit during Friday morning’s trading, following on from yesterday’s losses. GBP/EUR rates have now dipped below 1.39 on the market and the Pound is now trading 5 cents lower than it was a month ago.

We have seen the EUR gain support following news that the German government had ratified the Greek debt deal. This has been viewed as a positive step in trying to secure Greece’s future participation in the Eurozone and the EUR has benefitted due to this new found confidence. Personally I am sceptical as this is not the first time we have seen a  false dawn for the EUR, only for market sentiment to switch and the Pound regained its position very quickly.

We also had poor data for the UK in the form of the latest Retail Sales figures and this also dragged the Pound’s value down. Moving forward and whilst I do feel Sterling will struggle to move back to the highs we saw a month ago, I do expect GBP to find support around the current levels in the short-term. Whether this Greek deal is actually sustainable only time will tell but if I had EUR to sell I would certainly be considering my position following the positive move we’ve seen.

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 crashing following FED minutes (Joshua Privett)

The Federal Reserve Bank of America’s minutes from their July meeting yesterday has altered the whole timeline for global interest rate rises. The consensus among analysts was that most were expecting an interest rate hike in September, but the views expressed in the minutes by the FED members has put seeds of doubt into the market prices had previous reflected a ‘sure thing’. The stimulus for their change in heart seems to be mainly attributed to a slowdown in China and prolonged low oil prices, which crashed again overnight, affecting all major commodity currencies like the CAD, USD and AUD.

What does this have to do with GBP/EUR rates?

Firstly, Sterling’s current strength is largely based around the established understanding that the UK will be following close behind the US in raising interest rates. Multiple reasons do not permit the Bank of England to raise rates before their cousins in the FED. Due to the current weakness in the Euro, should the UK be the first Western country to raise interest rates, the value of the Pound would go out of control, and our largest trading partner will not be able to afford our goods. As such the delay in America for raising rates will have a similar delay for the UK. This is why the Pound is weakening across the board against all major currencies as investors move away to get more short-term returns elsewhere. 

Furthermore, Euro strength is why these rates are crashing rather than simply move gradually against the favour of Euro buyers. Yesterday saw GBP/EUR fall following increased confidence in the Eurozone, a result of the final ratification of the Greek bailout deal. This was exacerbated by the FED minutes as, traditionally, when the USD weakens this translates into Euro strength. USD/EUR is the most commonly traded currency pair in the world, so USD weakening usually means that investors are selling off their USD for EUR, particularly while the single currency is a bargain.

There are no expected data releases today to counteract this rapid crash in GBP/EUR rates. I fully expect that rates will drop below 1.40 today. Those with Euros to buy over the next month will see their budgets tightened further down the road. This change to interest rate timelines will put long-term pressure on the Pound and not be reversed in a week.

I strongly recommend calling me on 01494 787 478 and asking for Joshua in order to receive a free quote, and some tailored advice to your particular situation. I guarantee to beat any rate offered by banks and other sources and will happily peg these current buying levels until the end of the year at no additional cost. Alternatively email me on jjp@currencies.co.uk for me information, particularly if you are a Euro seller and want advice on how to ride this move in your favour.

All eyes on the Federal Reserve…

The big news on exchange rates is the Federal Reserve Minutes due this evening. This is the latest views on just how the American policy makers views the shape of the global and domestic economy plus to what extent the world should be gearing itself up for the US to raise interest rates. This is important stuff because US economic policy has a great impact not just on the US Dollar but also other currencies which in turn can impact sterling exchange rates.

In the end the US is bound to raise their interest rate at some point in the future, the main question is one of timing. I am seeing more and more reports that expect the US will hike their interest rate next month although the recent news from China plus concerns in the Eurozone might still weigh on confidence. This latest report from the US will be very interesting as a guide as to when we can expect the US to raise their rate.

Most commentators expect the raising of the rate to lead to USD strength but I myself am a bit more sceptical. I don’t think it is a given that the USD will strengthen particularly if it is widely expected that they will raise interest rates. We might even see some unwinding of positions and USD weakness if they raise rates as investors feel more confident about improvements in the global economy.

Understanding the market is key to making an informed choice on exchange rates so please speak to me Jonathan to learn more about everything going on that might impact your exchange rate.

Sterling’s Value Dips Following Greek Deal (Matthew Vassallo)

Sterling’s value has taken a hit this week, following news that a deal is now in place between Greece and its creditors. This deal was ratified through the Greek parliament after all night talks and the final vote will be taken by Euro finance ministers later today. It does now seem though that Greece will be given the required funds in order to meet their next repayment deadline and the EUR has strengthened against the Pound as a result of this decision.

GBP/EUR rates have dropped approximately 4 cents from the high we saw a couple of weeks ago and this move could signal the end of the Pound’s recent momentum. As such it may be wise to consider your position if you are holding Sterling. It’s been a quiet week for UK economic data releases so we have seen Sterling’s value shift as a result of outside variables, including economic developments inside the Eurozone.

A key question brokers should be asking themselves is whether the Pound is now overvalued and in my opinion it is starting to look that way, particularly against the EUR. Sterling has benefited from the on-going debacle in Greece and the fact we are navigating unchartered territory, means it is very difficult to give a definitive answer on this. In my opinion if you removed the scenario in Greece it is likely we would see GBP/EUR rates trading a few cents lower than 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

GBP to rise this morning?

The pound is in for a very busy day with a number of key releases mainly from the labour market with UK Unemployment data due. This release actually rose last month and could be a cause for concern. If we see a further increase sterling might really come under some pressure owing to the weaker economy. All in all if you are looking at making a transfer buying or selling pound sterling an awareness of all of your options well in advance is usually a good idea. If you need to make a transfer how do you know you are  getting the best rates? Speak to me to find out by emailing jmw@currencies.co.uk

The next thing to beware of on exchange rates is very much likely to be this Chinese news with the Chinese central bank cutting their pegged level to other currencies. This has presented much uncertainty into the forex markets with a major sell off on the Aussie and Kiwi presenting a very good time to buy these currencies with the pound. The volatility of the last 48 hours just shows nothing should ever be taken for granted on exchange rates!

For more information on your options and how to navigate the uncertainty please speak to me Jonathan on jmw@currencies.co.uk

GBP falls against all major currencies (Joshua Privett)

Changes to the release of UK interest rate decision data had traders and investors around the world fixated on their computers at 12:00 GMT today. Previously the announcements were spread out across the month to control GBP volatility, the decision to release all of this on the same day condensed a month’s worth of volatility into a few minutes of trading. The results were staggering.

It was expected that 2 or 3 members would suddenly support a rate hike, after months where it was unanimously rejected. Instead only one of the 9 voted to increase the base rate. GBP had strengthened heavily in recent weeks off the back of what was expected (as this would get us close to the 5 needed for a majority) but this rather dovish tone found those gains evapourating instantly. Their reasoning was that a stock-market crash in China and a still very present Greek crisis, will continue to drag on global growth, so a rate hike would be premature. Essentially, it seems an interest rate rise in the UK has been pushed back dramatically on the calendar of investors.

This resulted in Sterling weakness. In 3 seconds GBP/EUR dropped from 1.43 to the lower 1.42’s and with an eventual low of the day of 1.419. GBP/USD rates dropped by a similar amount, with a high/low difference of 2 cents, falling to a low of 1.546 during trading today.

Anyone who will be using GBP as a purchasing currency took a hit today, but not as much as they would think. The rates we have enjoyed since the start of the week have been purely based on market psychology rather than concrete economic data to justify currency strength. Now that these hyped up expectations were not met, these current rates for GBP/EUR and other GBP pairings are a true reflection of what the highs should be for this year. I would not expect another expectation of a rate hike this year to boost rates back up again, particularly after the dovish tones heard today from guardians of UK financial policy.

The Bank of England will not boost Sterling’s value for you, so speak to an experienced currency broker who can. I can maximise the value of the Pounds you hold if you have a transaction. Even if your requirements are not until next year, you do not have to wait and hope these rates will still be available. They can be pegged to allow you to budged more effectively and make sure you don’t miss out. Email me overnight on jjp@currencies.co.uk for a free quote and tailored advice on your transaction. Alternatively call 01494 787 478 after 8:30 am tomorrow and ask for Joshua.

Sterling’s Value Rises Ahead of BoE Interest Rate Decision (Matthew Vassallo)

Sterling’s value has risen during Wednesday morning’s trading, ahead of a host of key economic data releases over the coming days. GBP/EUR rates have once again spiked up, despite UK Services PMI data coming out worse than predicted this morning.

The EUR had made some inroads towards the end of last week but these gains have quickly been eroded, with Sterling once again moving back towards an 8 year high! With further rumours that Greece will not be able to meet their repayment deadline this month, we may find the spotlight back on the Eurozone sooner than some expected.

A report released by the National Institute of Economic & Social Research (NIESR) has predicted that global economic growth will slow again this year to the lowest rate seen since the financial crisis. Good news for the UK economy was that despite a cut in growth forecasts for both the US & Eurozone, the UK economies remained unchanged at 2.5%, further confirmation that our own economic recovery is on the right track. Due to the cut US growth forecasts we may find Sterling gains some value against the USD over the coming days, although generally global unrest with equate to a stronger USD, as investors will move their funds into safe haven currencies.

Looking ahead and we have a host of key data for the UK tomorrow, including the latest Bank of England (BoE) interest rate decision and subsequent minutes, which gives us a key insight into the relative health of our economy. We also have their quarterly inflation report and BoE governor Mark Carney’s speech, so expect additional volatility on Sterling exchange rates tomorrow.

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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