Tag Archives: sterling forecast

Sterling’s Value Continues to Fall (Matthew Vassallo)

Sterling’s value has fallen this week against almost every major currency and it now looks like we have seen the end of the recent GBP momentum. Only a couple of weeks ago the Pound hit a fresh 8 year high against the EUR, sitting at over 1.42 on the exchange. However, a poor run of economic data, including weak Manufacturing and worse than expected unemployment figures, has halted the Pound’s rise and pushed GBP/EUR rates down by over 6 cents from the recent high.

Whilst I always felt that a realignment was likely, this week’s move has been extremely aggressive and proves how fickle the currency markets can be. It is likely that the recent talks between Greek Prime Minister Alexis Tsipras & German Chancellor Angela Merkel have helped ease pressure on the EUR, with both now agreeing the Greece needs structural reforms if it going to continue as part of the single union.

We also need to remember the Bank of England’s (BoE) stance on the matter, as they have become concerned about how the Pound’s rising value would negatively affect UK exports. These fears were confirmed recently with UK factory orders falling to a 2 year low. The central bank have already indicated we will not be seeing a UK interest rate hike any time soon and I now feel it is unlikely that GBP/EUR rates will move back through 1.40 in the short-term.

Looking ahead and UK Retail Sales figures are released tomorrow and are expected to show an improvement. This could help the Pound find some support, although if figures are worse than expected then I anticipate the Pound’s slide 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

Sterling Exchange Rates Remain Volatile (Matthew Vassallo)

Sterling exchange rates have remained volatile throughout the trading week, following some key data releases for the UK & abroad. GBP/EUR rates have dipped again during Friday’s trading, with the pair hitting 1.3768 at the low. The Pound had started to gain further momentum earlier this week but with UK unemployment coming out worse than expected, it was quickly halted in its tracks.

The latest UK budget was also announced this week and whilst I’m sure it will continue to be dissected over the coming days, the general consensus was positive and it certainly has reinforced the belief that the UK economy is continuing its recovery at a steady pace. Growth forecasts have been improved for next year and 2016 and the positive feeling is likely to continue into the second quarter of this year.

However, despite this positivity the Pound has failed to improve on the high of last week and we are now in fact trading  almost 5 cents lower than the high of last week, a key indication to me that Sterling’s recent momentum is slowing. I feel the Pound will now struggle to break back above 1.40 in the short-term, with the BoE keen to control Sterling’s value for fear of alienating our trade partners. It is also likely that we are seeing a general realignment following a sustained rise for the Pound and for this reason I would be very tempted to consider my position around the current levels if I had EUR to purchase over the coming weeks.

It’s been a busy week for Cable exchange rates with the latest FED interest rate decision and monetary policy statements.  The FED modified their stance on interest rates during their statement, although their base has remained unchanged for the time being. They removed the word ‘patience’ from their regular statement, language that was seen as an indication that a rate change would not be seen for at least a few months.

There was a huge amount of volatility on GBP/USD rates during the decision and subsequent statement, with Sterling hitting a high of 1.5068, before falling back sharply by almost two cents.

The FED still said that it wants to see ‘further improvement’ in the US labour market before raising their base rate but it does now seem this is far more likely to happen in the US before we see the BoE do something similar in the UK.

Despite this more positive outlook Chair of the Federal Reserve Janet Yellen did not commit to any specific timeline and sceptics may argue this statement does not tell us anything new. However, considering the weak run of data that came out of the US recently, including poor Retail Sales figures, many analysts will argue this is the first step towards a US rate hike over the coming months.

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

Are GBP/EUR Rates Heading Back Below 1.40? (Matthew Vassallo)

Sterling spiked towards a fresh 8 year high against the EUR earlier this week, with rates moving through 1.42 at the high. The Pounds’ recent momentum has shown no real signs of slowing but this trend will not last for ever, despite the aggressive move we’ve seen for GBP since the turn of the year. Market conditions can change rapidly and with the European Central Bank (ECB) having already laid out their plan for aggressive rounds of Quantitative Easing (QE) up until 2016, it will be interesting to note how the markets react to this moving forward. We need not forget that the UK economy was injected with aggressive rounds of monetary stimulus at a time when our economic recovery was slowing and it has the desired effect. Any similar outcome for the Eurozone is likely to see the EUR snap back and when it does, the current highs are likely to look very attractive.

In my opinion it does feel as if Sterling is riding the crest of a wave but with far more scope for improvement on the EUR side, when consider recent market history, then it could be playing a dangerous game assuming this ride will last indefinitely. I don’t anticipate any sustained run for the EUR under current market conditions but I do feel the EUR will gain support sooner rather than later and a move back below 1.40 is likely over the coming weeks.

It is a fairly quiet day in terms of economic data for the UK, although Bank of England (BoE) governor Mark Carney is speaking later today and any insight into the BoE’s stance and upcoming targets, are likely to cause additional volatility on GBP exchange rates.

We can offer various contract options, including forward contracts and limit orders, which are designed to maximise the market value and protect clients form future negative moves in the market.

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 Rates Hit Fresh 7 Year High! (Matthew Vassallo)

GBP/EUR rates have spiked back up to a fresh 7 year high, following a dip during the early part of the trading week. It’s a busy week in terms of data for both the UK and the Eurozone but as we head into the weekend, current market conditions remain heavily weighted in favour of the Pound.

With Mario Draghi giving his latest public address yesterday, it was always likely to cause additional volatility on the pair and so it proved. The EUR did strengthen during the early part of his speech before the Pound recovered and this trend has continued into Friday’s trading, with GBP/EUR rates hitting 1.3890 at today’s high. With the ECB embarking on their 60 billion Quantitative Easing (QE) programme next week, the next few months are likely to prove decisive, in determining the upcoming trend on GBP/EUR exchange rates. If the QE programme proves fruitful then there is a strong case to be made that the EUR will finally gain some sustained market support but if the current woes continue, then a move through 1.40 is still a possibility.

GBP/AUD rates have taken a slight hit during the latter part of the trading week, with rates now floating around 1.94 on the exchange. The Reserve Bank of Australia (RBA) surprised the markets by keeping interest rates on hold at 2.25%. The expectation was for a cut to 2% but concerns over house prices has caused them to reconsider and with GDP falling below their 3% target, the AUD has found life tough going of late. A possible catalyst for the recent improvement is likely to be linked to positive Chinese data, which indicated that growth forecast were above expectation and due to Australia’s trade links to China, this has helped push GBP/AUD rates away from the recent 6 year lows.

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 GBP/EUR Rates Hit 1.40? (Matthew Vassallo)

GBP has continued to perform well against the EUR but there was a drop during yesterday’s trading, despite positive UK Manufacturing data. Usually a bullish reading would have boosted Sterling’s value but with Eurozone unemployment coming out better than expected, this move did not occur. Eurozone unemployment now stands at 11.2%, an improvement over the expected reading of 11.4%, and this helped the single currency to find some much needed market support, spiking by over a cent against the Pound. This move helped eased pressure on the EUR, which until yesterday had been sitting at a 7 year low against GBP.

Will this latest move be another false dawn for the EUR, or will the single currency finally be able to make sustained inroads back towards 1.35? With a busy week ahead I anticipate additional volatility on GBP/EUR rates but I do feel the EUR will continue to find support under 1.40. In fact, if you look at the recent economic data coming from the Eurozone, there has been a marked improvement. With the Greek debt issue seemingly put on ice for the next four months, the markets could well look to this improved data, which in turn could help push GBP/EUR levels back towards 1.35.

The USD made inroads against the Pound yesterday, with Cable rates moving back below 1.54 on the exchange. The Pound has found support around 1.50 after a huge swing for the USD over recent months, with the pair trading almost 20 cents lower than it was towards the end of last summer. Personally I feel the pair will now be range-bound in the low 1.50’s until either the BoE or FED change their monetary policy stance, or perhaps look at raising interest rates.

GBP/CAD rates have fluctuated over the past month, with Sterling gaining some momentum following a positive run of economic data for the UK. With the pair now trading comfortable above 1.90 for a sustained period and reaching a high of 1.9536, we are seeing some of the best exchange rates of the past 6 years! Many clients are now hoping that we will reach 2 but I do feel a huge amount of resistance will be met under this level.

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 

Is a Resolution With Greece Close? (Matthew Vassallo)

Whilst the on-going concerns in Greece continue to dominate headlines, the key question is whether or not a resolution is close? Whilst GBP/EUR rates continue to creep up the uncertainty remains but I do feel a resolution will be found, even if it’s only short-term. Greece’s creditors, in particular Germany, will not want Greece to default on their debts and leave the EUR, so I feel at the moment there is a lot of cat and mouse being played before a likely 11th hour resolution. In fact Greece have now put together a list of proposed reforms, which they hope will help to secure a four month loan extension and keep the wolf from the door for a while longer. These reforms include combating tax evasion and the smuggling of fuel and tobacco but whether these are enough to satisfy its creditors happy is not yet known.

With GBP/EUR rates hitting a fresh 7 year high this week it is clearly an attractive time to purchase EUR and whilst it will take a complete shift in market conditions for the EUR to gain any sustained support, any resolution with Greece, even a temporary one, could be the catalyst for this shift.

It’s a relatively quiet week in terms of economic data, so it is likely that tomorrow’s speech by ECB president Mario Draghi and Thursday’s UK GDP figures will dominate headlines as we head towards the weekend.

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 Forecast, how can I avoid the uncertainty of Greece? Watch out for the election too!

Sterling has risen against most currencies except the Euro in 2015 as UK economic data falls short of expectations. I think it important to note that some 40% of the UK’s trade is with the Eurozone and therefore the slowdown in the Eurozone economy will impact the British economy as well. Making plans in uncertain markets is never a bad idea! The pound could come under some strong selling pressures due to the UK General Election in May, however if selling Euros to buy sterling who is to say how weaker the Euro will be by then!

A Stop Loss order will automatically execute when the rate drops to a lower level than desired (protecting against losses) whilst a Limit order triggers when your desired higher rate is reached. Exchange rates change every second and such contracts guarantee your price even if the rate is just hit for a second. Please email me Jonathan on jmw@currencies.co.uk for more information on achieving the best rates.

GBP/EUR Dips Below 1.35 (Matthew Vassallo)

GBP/EUR rates have dipped below 1.35 during Tuesday morning’s trading, bringing some respite for the single currency. This comes after weeks of recent negativity, which has brought EUR exchange rates crashing down and for a while it seemed as though there was little tangible resistance available to stop this slide, certainly in the short-term.

Whilst concerns over Greece continue to cast a dark shadow over the Eurozone economy, we must remember that the future existence of the Eurozone does not hang on whether Greece meet their debt repayments. Whilst I appreciate the negative knock on effects that a Greek default would have on the region, I do not feel that the Eurozone and indeed the single currency is on the edge of collapse, regardless of what the tabloids would have you believe!

Of course the region is struggling and will continue to economically for many years but I do feel that the Eurozone will be keen to support its member states as best it can. Once the relative PR exercise have run their course then I anticipate an agreement will be reached between Greece & it’s creditors, which will allow an extension on their current debt repayment programme.

Looking ahead and we have a host of key data out for the UK tomorrow, with the latest Bank of England (BoE) minutes and UK unemployment rate. It was confirmed that there are now no members of the BoE voting for a rise in UK interest rates and it may be that we are given further insight into this and other key economic issues. With little Eurozone data of note, it is likely any UK data, including Friday’s Retail Sales figures, will cause additional volatility on GBP/EUR rates for the rest of this week.

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

Greek Debt Crisis Continues to Dominate the Headlines (Matthew Vassallo)

Greek & Eurozone officials are still locked in talks but as yet, no agreement has been reached over the repayment of their debt. However, reports yesterday indicated that talks had been constructive and Greek PM Alexis Tsipras was hopeful that an agreement would be reached before long.

At the moment we seem to be at something of an impasse and with the clock ticking, if there is no agreement within two weeks then Greece will not be eligible for a 7bn EUR loan, all parties will surely be keen to thrash out some kind of agreement. This uncertainty is being reflected in the exchange rates, with the EUR struggling to make any impression against almost all the major currencies.

Away from the turmoil of Greece and investors eyes switched to the UK quarterly inflation report, which was released yesterday. This was followed by Bank of England (BoE) governor Mark Carney’s subsequent speech, where he voiced concerns that UK inflation could turn negative in the spring, due to the falling oil prices. Whilst he feels this negative turn will only be temporary, it is hardly news which will bread investor confidence in the UK economic recovery.

Whilst GBP/EUR rates spiked during Carney’s speech, I feel this information is likely to temper any major support for the Pound. He insisted that the BoE would consider cutting interest rates further to counter any threat of deflation and that any chance of a UK interest hike had been eliminated until at least 2016.

Looking ahead to next week we have a host of inflation data out for the UK on Tuesday, along with the latest BoE minutes and UK unemployment figures on Wednesday. These are likely to be key releases and any variation from the expected results, is likely to cause additional volatility on the markets.

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  

Greek Bailout Concerns Continue to Dominate Headlines (Matthew Vassallo)

Concerns over Greek debt repayments is likely to dominate the Eurogroup meeting today, when key figureheads will meet to discuss Greece’s bailout package. The currency markets have so far reacted negatively to the on-going concerns over the Greek economy but with new left-wing government in place these concerns have intensified. It’s the uncertainty over the situation which has spooked the markets, as no one really knows how the situation is going to develop.

Will the Greeks be given any leeway on their repayments considering the Eurozone’s, in particular Germany’s, hard stance on the matter? Will they receive an extension to their loan repayments? And if Greece do default on their repayments will the outcome be? All of these questions have yet to be answered and until they are this cloud of uncertainty and negativity will continue to hang over the Eurozone.

The EUR has struggled to make any kind of impact against Sterling, with GBP/EUR rates breaching 1.35 on the exchange during early morning trading. With the currency pair once again closing in on a fresh 7 year high many will be expecting this trend to continue. However, we do need to consider that Eurozone data has improved markedly over the past couple of weeks and any sort of agreement or resolution between Greece and their creditors is likely to give the EUR a boost.

We also a key day tomorrow for the UK economy, with the latest quarterly inflation report being released, along with an address by Bank of England (BoE) governor Mark Carney. If Carney starts to talk down the UK economic recovery, then we could see the Pound’s momentum halted in its tracks.

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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