Tag Archives: sterling forecast

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

Are you placing too high an expectation on sterling exchange rates rising?

So today the unexpected happened and two members of the MPC (Monetary Policy Committee) Martin Weale and Ian McCafferty both voted to raise interest rates citing improvements in the economy and expectations wage growth could soon rise in line with inflation which has been falling. The effects were immediate and sterling spiked up reaching a peak of 1.2546 (GBPEUR) and 1.6679 (GBUSD) offering relief to anyone buying a foreign currency with the pound. The gains were quickly undone however with sterling finishing the day only about 0.1% above the opening on most pairings.

I think this highlights the danger in banking on big improvements in sterling exchange rates in the future. Here we have had the first split vote since 2011 at 7-2 and the effects were rather timid and failed to help lift sterling to the lofty heights we enjoyed a few weeks ago. I think if you need to buy a foreign currency with sterling making some plans now is a wise move since it is difficult to see where any further major boost will emanate from.

Tomorrow are Retail figures plus Government Borrowing data which may all serve to help lift the pound. Both releases were actually negative for sterling last month so if you are in a position to be holding sterling waiting to buy another currency, moving sooner might be the best course of action. To help catch the very best rates we offer STOP LOSS and LIMIT orders which trigger when certain levels are hit. This is often the only way to catch the best rates since the market can move so quickly!

For more information on what is the best approach to your currency situation please contact me Jonathan on jmw@currencies.co.uk. I have been working as a currency broker for 5 years and have lots of experience in the planning and execution of international payments. I look forward to hearing from you.

Jonathan

 

Sterling weakened so now are the best rates to sell Euros & Dollars to buy the Pound (Ben Amrany)

The pound has had a very bad day weakening significantly against most of the majors. Comments from the Bank of England Governor Mark Carney saw the pound fall from highs of  1.2632 to a low of 1.2468 against the Euro. The Dollar was a similar theme falling from 1.6843 down to 1.6685 and some the biggest losses were against the southern hemisphere currency with over a 1% drop against the Australian & New Zealand Dollar along with the Rand.

Have the wheels come off for sterling exchange rates? 

The Quarterly Inflation Report by the Bank of England dampened the hopes of any future interest rate rises in the UK as markets are now expecting that first rate to be no earlier than February 2015 while prior to the report we were expecting a rate hike as early as November. The report also slashed its wage growth forecast from 2.5% to 1.25% That forecast comes as official figures showed average wages excluding bonuses grew by 0.6%

Wage increase is one of the biggest concerns for the BoE before raising these interest rates. Carney’s also commented that the value of the pound has been to high and it has been effecting UK businesses and their exports of late.  So I ask. is this the start of the decline after we have witnesses really good gains in the last year. Nothing continues to go up for ever and this Friday the GDP figures will give us a good indication if the pound can recover today’s losses.

We expect to see growth for the UK economy but the key for the pound will be determined by whether growth is above or below 0.8% for the quarter and 3.1% for year on year.

If below forecasts we may see the pounds trend from today continue and a target of 1.2450 may occur so you may be wise to secure your funds before this key release. GDP is one of the biggest factors that affect the pounds movements and while we are still trading at very attractive levels now may be a wise move to act and secure your funds.

if you are looking at buying or selling the pound please feel free to email myself Ben Amrany at bma@currencies.co.uk and I will introduce myself and the service we can offer a little more formally. Rates can be up to 4% better than the banks and we will help youtry and time your exchange.

Thank you for reading

Ben Amrany

bma@currencies.co.uk

 

Tomorrow is the most important day for the pound so far this month

Tomorrow is a vital day for sterling exchange rates. 

We expect a further decline in the Unemployment rate , sterling may find a lift on the back of continued improvement in the number of people in work. Also released at this time is the Claimant count which measures the number of people claiming Jobseekers Allowance. Changes in the rates of Earning and Wage growth is bound to attract attention too since concerns remains about the extent to which improvements in the economy are being reflected in better wages for workers. There is fair scope for sterling strength and weakness therefore as the different elements of the ‘Unemployment’ data are released.

To really maximise this event you might want to put a ‘Limit’ or Stop Loss order into the market, this guarantees your rate once the price is hit. With such quick turns on the exchange rate this is the best way to maximise your transaction. Have you made provisions for volatility today? Are you concerned that your bank or broker might not quite be getting you the ‘best deal?’. Email me Jonathan on jmw@currencies.co.uk and let me see if I can help out.

Key Data for Wednesday – Bank of England Quarterly Inflation Report 10.30 am. Once the labour data has hit home there is a only a small window within which to assess the situation before the Bank of England report of key economic topics and we have a speech by Mark Carney. Sterling has soared this summer on expectations the Bank will raise the interest rate sooner than expected but I feel too much has been placed on these comments. Sterling strength might be good if you are buying a new home in France or paying Invoices from Germany but it has a detrimental effect on UK business as they lose their competitive advantage. Lately many UK business have grabbed headlines bemoaning the strong pound and the millions wiped off in profits. I will be watching for any comments on the detrimental effects of a strong pound, the recent worse data for the UK – lower GDP plus a declining rate of growth in the Industrial and Manufacturing sectors all points to slightly worse prospects for the UK economy up ahead and therefore a slightly weaker pound.

Thursday will see Euro data take stage – Important if you are tracking GBPEUR. At 08.00 am German GDP is released which will be very interesting since German Industrial Output posted a shock fall last month. The famous German ZEW survey today showed investor sentiment at a 20 month low for Eurozone’s biggest economy. With Inflation and Growth concerns rife the data at 10.00 am – Eurozone GDP and Eurozone Inflation all become very significant in determining just where rates will head.

Last year GBPEUR dropped to 1.14 and GBPUSD 1.48. On both currency pairing and pretty much all other sterling rates we are around 10% higher than last year. There are never any guarantees on the market but tomorrow’s data looks like it could easily affect current levels, what do you need to do?

If you need to make an exchange understanding what moves the market is key to getting the best deal. We offer a personal, proactive service to help you get the most from the market as well as offer an award winning exchange rate when you do trade. To compare notes or run through all of your options please feel free to contact me Jonathan Watson directly using jmw@currencies.co.uk

 

 

 

Will sterling keep up this current trajectory?

Tomorrow is UK Retail Sales and Friday is the latest UK GDP (Gross Domestic Product) data. Both of these releases could easily spark volatility in the market underlining the importance of keeping up to date with the market. In the last few weeks sterling exchange rates have crept up notably against the Euro but we are at multi year highs against pretty much everything! Can sterling keep on this trajectory?

Well early indications seem to think so with recent poor borrowing economic data being ignored in anticipation of an interest rate at hike at some point in the future. As is so often the case with exchange rate it isn’t just which currency is the best, it is that others are very unpopular! Take the Euro for example, we may still see some QE (Quantitative Easing) in the future. This form of ‘printing money’ is very bad for the currency as by increasing the money supply it effectively dilutes the strength of the currency. The UK used QE many years ago and this is one of the reasons the pound dipped to almost parity with the Euro, imagine the detrimental effect QE in the Eurozone would have on GBPEUR rates!

If you have any need to buy large volumes of foreign exchange getting the best exchange rate is central to making the most of your money. The authors of this blog and I are extremely confident we can undercut other sources like banks and other currency brokers on exchange rates, plus also offer practical assistance in the timing and management of your payments. For a quick rundown of your situation and a comparison why not make contact? We can then have a quick chat at no cost or obligation and you can decide for yourself what is better! After all if you were entirely happy with your current situation you probably wouldn’t have read this far!

Jonathan Watson, jmw@currencies.co.uk

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