Tag Archives: sterling forecast
Sterling has found favour today due to the impressive Retail Sales figures showing the UK is on the up. Sterling seems to have shaken off the more recent wobbles and is now looking like a safe bet to make further gains in the future. If you need to make a transaction involving the pound, I would strongly recommend speaking to us to find out the very best rates of exchange and allow us to explain the current forecast. Please feel free to drop me a line on email@example.com
The outlook on the pound is positive and the recent euro gains against the pound look set to be on the back burner for the time being. If you need to sell euros to buy the pound then I would focus on making the transaction sooner rather than later as the longer term prediction would appear to favour GBP. The main driver in this situation will be the likelihood of any interest rate hike, tomorrow’s UK GDP data whilst old news, could act as a very interesting trigger for further GBP strength.
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It’s been a poor start to the trading week for GBP exchange rates, with loses against most of the major currencies, including the EUR and USD. We’ve seen GBP/EUR exchange rates fall below 1.20 on the exchange for the first time in months and it does seem as if Sterling’s recent run is coming to an end. Whilst I do not anticipate the EUR to erase all of the loses of the past two years, it is likely GBP will struggle to make any serious inroads unless there is now a shift in market sentiment. As mentioned in my previous blogs GBP had struggled to break through 1.22, finding a lot of resistance around this level and it is no surprise to see GBP/EUR exchange rates fall away from this high, especially when you consider the bullish comments made by European Central Bank (ECB) president during his press conference last Thursday. This coupled with some mixed data for the UK has handicapped GBP in the short-term.
GBP/USD rates have also dropped during Monday’s trading, with rates now floating between 1.66-1.67 on the exchange. We have anticipated a positive move for the USD for some time and whilst we cannot say that is necessarily the start of that trend, I do believe it is only a matter of time until the current levels look extremely attractive for anyone looking to purchase USD.
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 exchange rates with your current provider, then please feel free to contact me directly at email@example.com.
Sterling has had a fairly flat week across the board and has struggled to breach rates of 1.22 against the Euro, 1.67 against the US Dollar and 1.86 against the AUD. The rates have been fairly flat due to not a great deal happening of a positive note for the UK economy. We had the GDP figures out this morning and the ONS showed that the UK economy grew by 0.7% in the final quarter of 2013. This was unchanged from the previous estimate. However the estimate for growth in 2014 as a whole was cut down to 1.8% from 1.9%. These figures have stopped sterling exchange rates really pushing on.
Against the Euro I would expect to see the pound rise over the next two trading days as there is a lot of data out from Germany which could assist a spike for the pound. We have their unemployment figures out tomorrow and then their inflation figures on Friday. If inflation continues to fall this will heap pressure on the Euro and will make things worse for Euro sellers. If you are buying the Euro then trading on spikes in the market may well be the way to go to capitalise on the favorable movement.
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Currently sterling is well supported largely due to the strong likelihood of the UK raising interest rates next year. Investors are taking up positions on sterling in anticipation of better returns in the future. 80% of currency transactions are speculative and whilst this is not a topic we deal in for clients , it is a topic that is extremely relevant in determining future market movements for our clients.
Longer term sterling appears bound to increase significantly as the prospect of ultra low interest rates becomes the past. The pound has been flirting with 5 year highs on a trade weighted basis which when you consider interest rates have been at rock bottom for 5 years makes sense.
Since we won’t actually see any actual hike for some time there is certainly a good chance of more GBP weakness but it will be in pockets and not reflective of a greater downward trend. If you are going to need to purchase the pound in the future moving sooner is I believe the best course of action. Please contact me directly for assistance in sourcing the best rates and the optimum peaks to trade on. I assure you of being able to beat the banks and currency brokerages.
Many of my clients selling say Euros and Dollars after a property sale are quibbling over the fact they are trading at multi year lows. I wholly sympathise with these clients because when you do the calculation on the losses selling six figure sums in the last year they are substantial. But if you look further back say at the 10 year and 5 year figures you will see current rates are not so bad.
Take Mr Smith in France for example, who may have purchased there when rates were say 1.50. Imagine buying a 200,000 Euro property at 1.50. This would have cost you 133333.33 GBP. Fast forward ten years and unfortunately he has had to sell to come back to the UK and had to take a hit on the price. He had to sell for 175,000 Euros and was not happy at having lost 25,000 on the price. However he managed to get 1.20 on the rate which means his 175,000 Euros are actually worth 145833.33 GBP. Suddenly it is not such a bad deal and when he considers all the fun times he had there, the whole experience has actually not been too bad!
This just shows the importance of exchange rates when considering overseas transactions. Sterling is at a very good level now which may yet improve. Understanding what is driving exchange rates is critical to getting the best deal. For more information on the forecast for your particular situation please don’t hesitate to contact me directly on email@example.com