Tag Archives: sterling forecast

UK GDP Figures Dampen Market Expectation (Matthew Vassallo)

Sterling has had a mixed day on the exchange, with gains against the USD but a fall against the EUR. The latest set of UK Gross Domestic Product (GDP) figures were released this morning and although the economy grew by 0.3%, the figure was under the expected 0.5%. This immediately caused GBP to weaken against its EUR counterpart, with GBP/EUR dropping back below 1.40.

Whilst these figures do indicate a temporary slowdown in the economy, the general consensus is that the UK recovery is still on the right track. Of course any downturn will fuel opposition leaders arguments in the build-up to the election, pointing to the slowdown as evidence that the UK economy is not performing as well as it might. My personal opinion is that whilst I do feel Sterling will struggle to break back through the recent highs, I do not feel the EUR can sustain any sort of run under the current market conditions. Greece is still high on the agenda and with so much negative media coverage, the single currency is fighting with its hands tied behind its back and will continue to continue to struggle in the short-term.

Despite the losses mentioned against the single currency the Pound hasn’t faced the same struggles against the USD, with Cable rates moving up by almost 2 cents from low to high. The pair is now trading above 1.53 and the catalyst for this could be attributed to comments by the US Federal Reserve, who have played down the chances of an interest rate hike in June. Whilst this move was slightly unexpected I do not feel the current trend will continue and as we move through the UK general election and into the summer, I anticipate the USD to put pressure back on the 1.50 resistance level.

If you have an upcoming currency requirement and would like to be kept up to date with all the relevant 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 rises again but for how long?

Exchange rates are like elastic bands, you stretch and stretch until suddenly, “BANG!” and your rate is gone!

I would be so pleased if I was buying a foreign currency with sterling in 2015. GBPEUR has risen almost 15 cents since the start of the year, against the Aussie and Kiwi sterling is at multi years. GBPCAD has been over 1.90 and GBPZAR is comfortably above 18! Is this going to carry on with the most uncertain election in years just around the corner?

Much of sterling’s strength is due to other currencies being weaker. Notably the Euro which has weakened to multi year lows against all currencies. The outcome of all of this could not be so rosy with the election coming up. In short if you are transferring currency in the coming weeks or months please don’t take the current rates of exchange for granted, it could end up very costly. I was working when the last election took place, sterling lost 5 cents in the weeks leading up to the election. The same was true of the Scottish Referendum. Now sterling did recover afterwards but is that really a risk to take? The distinction between those two events and next week’s election is the range of uncertain outcomes.

Even if you don’t need to buy currency just yet making some plans in advance is always sensible when it comes to finance. As a wise man once said ‘A good financial plan is a road map that shows us exactly how the choices we make today will affect our future’. 

For more information on the currency markets and other inspiring quotes please contact me Jonathan on jmw@currencies.co.uk

GBP/ EUR 1 month Forecast

Sterling made gains against the Euro during yesterdays trading session after members of the Bank of England (BoE) indicated they are now sitting on the fence whether to vote yes or no for an interest rate hike. With interest rates being the single most important driver of a currency, if the BoE raised the interest rate this would give strength for sterling (more €s for the £). However an interest rate hike is not on the cards until 2016 therefore I believe Euro buyers should take advantage of the recent comments and therefore the current levels we are seeing.

What will affect GBP/EUR over the next month?

The two main drivers that will effect GBP/ EUR exchange rates within the next month are the UK General Election (Weakening Sterling) and a possible ‘Grexit’ (Weakening the Euro). Over the last month the ‘Grexit’ has been outweighing the UK Election, however as of Monday I believe the tides will turn. In the lead up to the last election, GBP/ EUR dropped by over 3 cents and I don’t think this election will be any different. Therefore my prediction is GBP/EUR will be around the 1.36 mark come the 7th of May.

Depending on the outcome of the election  will depend on what happens to GBP/ EUR exchange rate. Please click here for a full report on the possible election outcomes. If you are looking to buy or sell Euros within the upcoming months feel free to get in touch by emailing me on drl@currencies.co.uk or alternatively call 01494 787 478 and quote Dayle Littlejohn.

 

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

GBP/EUR rates dropped during yesterday’s tradng, following poor UK Retail Sales figures. The expected figure of 5.4% was not hit, causing Sterling to lose value against most of the major currencies, in particular the EUR. This drop came after Sterling breached the 1.40 barrier earlier this week, once again providing EUR buyers with some of the best levels of the past 7 years.

Sterling’s positive move over the past couple of weeks was not expected when you consider the the uncertainty that was likely to be created by the UK general election. However the on-going economic difficulties inside the Eurozone, particularly in Greece, have not allowed the EUR to gain any sustained market value and this is why we are seeing the Pound trade at such attractive levels.

Personally I feel there is scope for the EUR to improve, especially when you consider its recent history and any UK media attention on Europe in the build-up to the election is likely to cause market uncertainty, which will not be positive for the Pound.

Looking ahead and with the latest Eurogroup meeting continuing today, expect issues in Greece to dominate discussions. Whilst scaremongering is rife at times like these, there is a very real threat that unless Greek finance minister Varoufakis presents a tangible list of reforms soon, then Greece will receive no further bailout funds from the IMF and it is likely they will default on their debts. If this does happen then their future participation inside the EU is likely to come under serious pressure.

GBP/USD rates crept back above 1.50 during Thursday’s trading despite the poor UK data mentioned previously. This move is certainly a positive one for the Pound, which for a time felt like it would be marooned under this glass ceiling for an extended period. The catalyst for yesterday’s spike could have been the weak US employment & Manufacturing data which came out under expectation and helped drive the Pound’s value back up. In truth it was fairly flat market for the pair yesterday but I expect this to change as we head towards the general election.

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 

How will the General Election impact Sterling Exchange rates?

How big an impact will the General Election be on sterling exchange rates? It could turn out to be quite a big issue as there is so much uncertainty as to the outcome. We generally expect the pound to fall in the run up to the election before rising after. Quite how much it will rise or fall is of course impossible to predict but I would not rule out movements of up to 5 cents in either direction.

You can protect yourself and capitalise from such volatility by utilising one of our many contract options:

  • Spot

Once the rate is fixed you need to get the money to us within a few working days. We arrange onward payment to the specified beneficiary oce all your funds have cleared. Internationally funds are sent via SWIFT – the fastest international payment method. Please contact me Jonathan on jmw@currencies.co.uk to learn more!

  • Forward

When you want a fixed exchange rate for up to 1 year.

You pay a small deposit to fix the exchange rate. Once the contract is agreed, regardless of market fluctuations, you know exactly how much currency you are buying. Perfect if you want to budget and protect yourself from market volatility.

  • Limit

When you have a target exchange rate and timing isn’t crucial

Placing a Limit Order means that when the market moves to your specified rate, our system automatically purchases your currency, letting us work as your eyes and ears in the market.

  • Stop

When you don’t want to trade below a certain exchange rate and timing is not crucial

You choose a lower limit on the price at which you are willing to buy. If the market drops to that level, you are guaranteed that you will get an exchange rate no lower than the one you specified.

I offer a personal service to highlight market movements and trends which might affect your rate as well. Even though you might not need to buy currency just yet please register so that we have a fully operational trading facility and I can quote live prices for you.

Making no plans and just hoping your rate will magically go up is one of the most common and costly mistakes clients make on foreign exchange payments. For more information on getting the best deals and making sure you know everything that  please contact Jonathan on jmw@currencies.co.uk.

Sterling on the Rise (Matthew Vassallo)

Sterling has started gain some momentum again this week, following losses against both the EUR & USD recently. Despite GBP/EUR rates hitting a fresh 8 year high only a few weeks ago, the EUR had threatened to wipe out these gains, with a move back towards 1.35. However, as often happens the currency markets have proven unpredictable and Sterling has benefitted from better than expected UK service sector data this week, along with better than expected growth in the first three months of 2015.

However, all those clients expecting rates to shoot back above 1.40 may still be left disappointed as there is an on-going concern amongst investors that the upcoming UK general election will cause uncertainty in the markets and this could cause the Pound to weaken, a scenario the Bank of England (BoE) would likely support. Due to Sterling’s rising value against the EUR we have seen UK factory orders fall to a two year low, which ultimately means that our export industry is suffering. If this is not stemmed and we see the recent highs broken, it is likely the BoE will step in to try and control this, for fear of alienating our largest trade partners through an overvalued currency.

GBP/USD rates continue to trade below 1.50 and despite Cable rates moving back above 1.49 during today’s trading, I do feel this threshold will continue to protect the USD in the short-term. Whilst Sterling is performing well against both the EUR & AUD, the same cannot be said against the USD and it is interesting to note that both currencies mentioned have had huge economic difficulties to contend with over the past 12 months. It makes me wonder whether Sterling is actually as strong in the market as people believe, or if it is benefiting from the on-going negative circumstance that are handicapping the aforementioned currencies?

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 co0mpare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

How do I get the best exchange rates for buying and selling sterling?

1 – Don’t use the bank! Despite what they might claim, they will not get you the best rate. If you believe my claim suprious call me now and make a comparison. 01494 787478 is my number, ask to speak with Jonathan.

2 – Speak to a currency broker about all of your options. A broker will be able to offer you an exchange rate that is better than a bank. If you have a broker already and want to check if they are truly getting you the best deal, speak to me again! I work as a broker and have done for 6 years. I have only ever worked for the same company and they have been in business for 15 years. I am very confident I can better any rate you are given, please speak to me Jonathan to learn more or email jmw@currencies.co.uk

3 – Make some realistic plans! Just hoping exchange rates will rise isn’t enough. And just expecting the rate to move to a level you need is not enough either. Exchange rates move for a huge variety and range of reasons. Accept you will not buy at the absolute top of the market and that it could move against you. Speak to me about the range of contract options available to fix rates for up to one year and to receive updates on the foreign exchange market too.

How will the pound perform in April?

The rates really are predicted to fall in the coming weeks owing to the uncertainty of the election. Labour are not being viewed favourably by markets as they plan to increase spending, the Tories have pledged a referendum on Europe (bad for business confidence) and the consensus is for a hung parliament – again more uncertainty. Let us look at the last few events which led to political uncertainty in the UK. Ahead of the 2010 General Election sterling lost 7 cents, ahead of the Scottish Referendum sterling 5 cents. Now I ask you dear reader, what do you think will happen to sterling in the coming weeks?

Of course no one can tell you exactly or precisely what will happen on exchange rates. But by working with a specialist who understands the market and setting some realistic targets you can limit your exposure and maximise your gains when opportunities do arise. The gamble is to do nothing so please contact me to learn more and have a chat about your situation. Each transaction and circumstance is different, with various options to consider.

If you need to make a currency transaction in the coming weeks I would love to hear from you and personally assist in the execution and planning of any payments. Even if you believe you have a system in place a second opinion and price is often sensible. Please email me jmw@currencies.co.uk or call (+44) 01494 787 478 and ask to speak to Jonathan. If I am on a call please leave some details and I will call you back personally as soon as possible.

We assist clients located all over the world but if you are in the UK, don’t forget to vote!

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

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