Tag Archives: sterling forecast

GBP Dips Following Poor UK Retail Sales Figures (Matthew Vassallo)

GBP has dipped during Thursday morning’s trading following the release of the latest UK Retail Sales figures. With figures dropping in September by 0.3%, it is another indication that all is not well with the UK economy and it now seems as if our recovery is stagnating. With inflation falling to a five year low recently and on-going concerns over the knock effect the Eurozone slowdown is having on the UK economy, we may find that GBP struggles to make any further sustained inroads against the EUR.

Tomorrow is likely to be a key date for investors, as we have the latest set of UK Gross Domestic Product figures. A country’s GDP figure gives investors a key insight into the overall performance of that particular economy and with UK growth expected to fall in Q3 from 0.9% to 0.7%, we may find that the Pound continues to come under pressure as we head into the weekend.

GBP/USD rates dipped again during yesterday’s trading with a sustained move under 1.60 now looking likely in the short-term. The USD was boosted by better than expected US inflation data released yesterday and with question marks now hanging over the UK economic recovery, I do feel as if the USD is likely to gain further market support. Cable exchange rates have traded above 1.60 for so long that a correction is well overdue in my opinion and I wouldn’t be surprised to the USD put pressure back on 1.55 by Christmas.

Following the devastating events in Canada over the past days, which have reminded the world of the dangers we still face by terrorism, the focus has shifted away from their economy. RBC Governor Poloz cancelled a speech last night, as the country came to grips with the tragedy.

Looking at any knock on effects for their currency and GBP/CAD rates dipped during yesterday’s trading, despite the fact the Royal Bank of Canada (RBC) interest decision came out as expected, with the central bank keeping their base interest rate on hold at 1%. Whilst this was widely anticipated their subsequent monetary policy statement indicated the Canadian economy was seeing ‘renewed vigour’ in consumer spending and the real estate market since July.

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

Will it be a busy and positive end to the week for the pound?

Early indications suggest yes! The pound has clearly been the favourite currency of 2014 as the UK leaves its counterparts behind with solid economic growth and economic policies all pointing towards raising interest rates. For me this trend is not finished and whilst the pound has clearly come slightly unstuck this October (the month economic realities often hit home, remember the Wall St crash?) longer term sterling really should remain the investors choice.

Risks remain from the Eurozone slowdown (40% of the UK’s overseas trade is with the Eurozone) and a general deterioration in the global economic outlook but on balance the UK is benefiting from improved domestic demand and whilst it may be that sterling does dip a little more as interest rate expectations are pushed back, I still believe the UK will raise interest rates ahead of the United States. I therefore view any dip in sterling as a buying opportunity well worth capitalising on.

Tomorrow’s Retail figures will be a big indicator as to whether or not the this domestic demand is sustainable and Friday’s GDP (Gross Domestic Product) will again be very indicative of just exactly how the UK is faring, I would personally expect sterling to fall tomorrow but rise Friday. If you are considering an upcoming exchange why not speak with me to learn a little more about the forecast?

What exactly should I do? I cannot unfortunately tell you exactly what to do or when to buy the currency, no one can! I can however keep an eye on the rates for you and highlight improvements and upcoming events which will affect the exchange. The uncertainty of the foreign exchange market means making firm decisions is impossible and it is only by speaking with a true specialist you can fully understand what may happen down the line.

For more information please contact me Jonathan Watson on jmw@currencies.co.uk

Where Next for GBP Exchange Rates? (Matthew Vassallo)

It’s been a volatile week for GBP exchange rates, with a negative trend developing against the EUR & USD. The Pound was performing well against the EUR, hitting a fresh two year high only a couple of weeks ago. However, as often happens the currency markets have proved their unpredictability and since that high we have seen the EUR make significant gains, strengthening by over 3 cents and providing EUR sellers with some much needed respite.

GBP/EUR have levelled out this morning and are currently floating around 1.25 on the exchange but personally I feel it will be difficult for the Pound to regain this lost ground, unless we find another catalyst which will push Sterling back up, or more likely in my opinion, further negative news that may drag the back EUR down. Whilst we are well aware of the on-going economic struggles inside the Eurozone, it did seem as if the UK economy was rising above this and our recovery was above expectations and at worst certainly on track. Last week’s negative comments by UK Chancellor George Osborne, along with very poor inflation figures earlier this week have started to shift market opinion and the Pound may now struggle to gain any momentum in the short-term.

GBP/USD rates have also levelled out this morning but once again the recent trend has been USD strength with Cable breaching the 1.60 barrier earlier this week, a defining statement in my opinion. I do believe a move back towards 1.55 is on the cards and as we move into 2015 I anticipate GBP/USD will continue to trade under 1.60.

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

 

Eurozone Slowdown Will Affect UK Economic Recovery (Matthew Vassallo)

UK Chancellor George Osborne has issued a warning that the UK economic recovery will be affected by the slow down inside the Eurozone. This announcement is likely to have a knock on effect for the Pound, which may now struggle to regain the highs witnessed against the EUR last week. GBP had pushed up to a fresh two year high against the single currency last week but has since seen its market position slide, as the single currency found support and realigned back under 1.27 this week.

Looking ahead and the key question now, where next for GBP/EUR exchange rates? Personally feel it will be difficult for GBP to breach the two year high witnessed last week under the current market conditions and it may well be that the markets are now waiting for the next key economic decision before making another decisive move. I think we are more likely to see GBP/EUR back around 1.25, than we are to see a move back up towards 1.30, so I would certainly be considering my position if I had an upcoming EUR purchase around the current levels.

Despite the positive moves seen for the USD over recent weeks the US Federal Reserve (FED) were keen to dampen hopes of an interest rate hike anytime soon. This news is likely to temper any further aggressive moves for the USD over the coming days, as it was anticipated that the FED were likely to raise interest rates before the Bank of England (BoE).

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

Will Sterling’s Positive Momentum Continue? (Matthew Vassallo)

GBP’s positive run against the EUR has continued this week, with GBP/EUR rates hitting 1.2868 at today’s high. This positive momentum has continued from last week, pushing the currency pair back up to a fresh two year high. This has given those clients holding Sterling some excellent buying opportunities, although many are now hoping this positive spike continues up to 1.30 on the exchange.

However, a word of caution to all those waiting for further market improvement. The EUR is likely to find support under 1.30 as this is a key resistance barrier and we will need to see a further shift in market conditions in order to breach this level and even if this opportunity does present itself, it is likely the Bank of England (BoE) will step in to try and talk down market expectations in the hope this will then curtail any further rises for the Pound. A strong Pound is attractive for those buying properties or goods abroad but ultimately it will have a negative impact on our economy if the result of this means that our largest trading partners (Eurozone) can no longer afford to import goods and services from the UK.

GBP/USD rates continue to float between 1.61-1.63, although the recent USD strength seems to have solidified the Greenbacks position under 1.65. It does now seem as if the FED will raise their interest rates before the BoE and along with recent improvements in the US economy, I expect the recent USD strength 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

Will the Recent Trend of GBP Strength Continue? (Matthew Vassallo)

GBP/EUR rates have continued on an upward curve since the Scottish referendum results last week, news which helped alleviate uncertainty from the market. Sterling hit a fresh two year high, providing EUR buyers with further opportunities and although we have seen rates dip slightly this morning, GBP/EUR continues to float around 1.27 on the exchange. This positive momentum is a continuation of last weeks’ trend and follows a couple of extremely volatile weeks for the currency pair. The EUR had started to improve against Sterling and at its recent high briefly broke through 1.24 on the exchange, before the now well documented events of last week took hold and helped push rates back up to their current levels.

The question for many clients now is whether we will see a sustained period of GBP strength against the single currency, or will the EUR find support around the current levels?

Personally I feel it will be very difficult for the current trend to continue, as regardless of the market conditions the Bank of England (BoE) will not want to see Sterling’s value rocket. When we also consider that there may well have been an overreaction to last week’s referendum results and I believe we will see the EUR find support around the current levels and may even make a move back towards 1.26.

GBP/USD rates have also fluctuated more aggressively than usual of late, with the USD strengthening significantly against the Pound over recent weeks. As previously discussed the USD has continued to move away from the recent four year lows, even threatening to put pressure back on 1.60 at its recent high. Since then the Pound has started to realign itself and moved back through 1.63 but I do not expect this trend to continue for long and I feel it is far more likely we will see GBP/USD rates back around 1.60 by Christmas than back above 1.65.

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 Week for the Pound (Matthew Vassallo)

It’s been a volatile week for GBP, with uncertainty surrounding the Scottish referendum having a negative impact on the Pound. We started the week with news of a poll that had the vote at 51% in favour of Scottish independence and this sent the markets into panic mode, with GBP/EUR rates dropping by over a cent. Since then we have heard mixed opinions from various figureheads but it does seem as if the initial poll was distorted and in fact the No vote was still the preference of the majority.

GBP/EUR rates are now reflecting this opinion, with a move back towards 1.26 during yesterday’s trading. We’ve also heard from Bank of England (BoE) governor Mark carney this week, who indicated we may see an interest rate hike in the UK by Spring 2015. This is the first time he has given a specific timeframe and this news also helped to support Sterling recovery, from the early week losses against both the EUR & USD.

GBP/USD rates have also seen a number of spikes this week with the USD still holding firm in the low 1.60’s, as it continues to realign itself against GBP after a rocky few months. It now seems inevitable that we will see GBP/USD head back below 1,60 on the exchange and I wouldn’t be surprised to see this before the end of the 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 on mtv@currencies.co.uk

Ignore the Scottish Referendum at your peril!

I first wrote of the negative consequences of the Scottish vote in May (which you can read here) and so far have not been proved wrong. The Yes campaign has been massively underestimated and the lack of economic clarity from either side has the pound reeling.

It would be most damaging for the pound if Scotland did declare independence since interest rate expectations would be pushed right back as the Bank of England needed time to assess the fallout from such a move. There would be many months of political and legal wranglings over currency and exactly how debts would be split, all of this would not fit in with most investors more recent views of a ‘United’ Kingdom finally on its path to future economic success. The strength of sterling this summer is primarily down to interest rate hike expectations which remain high but if pushed out would cause the pound to go lower.

So how do I trade the Scottish Referendum, when should I buy or sell my Sterling?

It seems doubtful any yes vote would triumph but with the spread between the yes and no vote having reduced from 22 points to 6 in recent polls, it would be foolish to ignore the potentially major repercussions on the market. The fairly heavy sterling losses since Monday could be indicative of what will happen ahead of the referendum. Often in these situations the currency concerned would strengthen following the result as it provides certainty again. I think therefore if you need to buy the pound look out for spikes in your favour and move before the referendum, if you are too busy to watch the market part of our service is to monitor rates for clients, just drop me a note on jmw@currencies.co.uk.

If you are buying a foreign currency with the pound you might want to move very soon or wait until after the referendum to see if the rate goes back up. However there are no guarantees any dent in confidence will be restored, there is a likelihood the losses for sterling will intensify as we approach the referendum date 18th September.

Having some sort of currency strategy is always sensible and we work as currency specialists expert in the safe transfer of money internationally at commercial exchange rates. If you would like any information or assistance concerning a transfer you need to consider I would be happy to hear from you and offer some practical solutions.

Jonathan

jmw@currencies.co.uk

Where Next for GBP Exchange Rates? (Matthew Vassallo)

Sterling has continued to hold its position in the market this week, a trend which has been familiar over recent months. It has been widely discussed how UK economic data has improved sufficiently to bring confidence back in the UK recovery, which in turn has allowed the Pound the opportunity to make significant gains against most of the major currencies through the first half of 2014.

Despite the fact the Pound has fallen away from its recent two year high against the EUR, rates are still sitting above 1.25 on the exchange, providing some of the best buying opportunities of this year. Whilst the EUR has found support around the current levels it is struggling to make any sustained inroads and every time it seems as if a EUR fight back is on, market confidence disappears and the Pound quickly realigns itself.

It’s been a quiet week of economic data releases for both the UK & Eurozone but tomorrow could be key with the latest Eurozone inflation data and unemployment figures, both of which are usually key market movers.

GBP/USD have dropped again this week, as the USD continues its fight back against the Pound. Although this move has been tempered by recent false dawns, it does seem as if the positive momentum being built by the Greenback will continue. GBP/USD rates have moved back below 1.66 and it wouldn’t surprise me to see Cable back below 1.60 by the end of 2014.

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 Overview (Matthew Vassallo)

It’s been a mixed week for Sterling, following a run of inconsistent economic data releases. The Pound lost position against the EUR early in the week as UK inflation data came out worse than expected. However, just as it looked as though the EUR may start to build some positive momentum the Pound fought back, following the release of the latest Bank of England (BoE) minutes. These showed that two of the central banks members had voted in favour of an interest rate hike, news which immediately helped to boost market sentiment in the Pound, moving GBP/EUR rates back through 1.25 on the exchange.

Considering the up and down nature of this particular trading week it shouldn’t have been a surprise when the markets were once again thrown by worse than expected UK Retail Sales figures, which were released yesterday. The effects of this has now culminated in GBP/EUR floating just below the 1.25 level during this morning’s trading , with little movement expected today due to the relative lack of UK & Eurozone activity.

The USD continues to show an improvement against the Pound and following the release of Wednesday’s Federal Reserve minutes, the USD moved back under 1.66 on the exchange. This recent trend of USD strength has helped to alleviate some pressure on the green back, which has found itself handicapped by a stagnant economy over recent months.

Are we now finally seeing the recovery many analysts expected the USD to make at the start of 2014 year? I believe we are and the FED’s recent minutes have reaffirmed this belief, indicating that policy makers on a whole are happy with improvements in the job market but more importantly that they may raise interest rates sooner than expected. This news is likely to help the USD continue to strengthen against the Pound, with further gains likely in the short to medium-term. Personally I feel we are now likely to see GBP/USD put pressure back on 1.65, so if you need to purchase USD’s it may be prudent to move sooner rather than later.

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@currnecies.co.uk

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