Tag Archives: sterling forecast

How well do you really understand what is driving your exchange rate?

The pound looks likely to rise against most of the major currencies longer term as the UK appears likely to raise interest rates in the future. This is important because the raising and lowering of interest rates by a central bank greatly affects the strength or weakness of a currency. Understanding this fact – that the raising and lowering of interest rates greatly affects the strength and weakness of a currency – is key to predicting where exchange rates are headed.

One of the major reasons for GBP strength in 2014 is high expectations the UK would raise interest rates in 2014. This expectation has been pushed well back into 2015, if not 2016 and anyone holding on for this to happen to make an exchange had better have a long time to do so! I remember in 2012 we were almost in an identical position , with expectations high the UK would raise interest rates in the coming year or two. We then had the Eurozone crisis deteriorate (remember Greece on the brink of leaving the Eurozone) and the following Spring the UK entered a triple dip recession and the pound crashed from 1.24 to 1.14 in about 6 weeks!

I do not think we are likely to see such a sharp move but with the General Election and increased political uncertainty on the cards for 2015 a tough patch for the pound appears highly likely. Even though May 2015 seems many months away it is not actually that far in terms of exchange rates. Considering you have seen anywhere from 5-15 cents movement per year for the last few years on GBPEUR, making some plans now for currency in the new year is clearly sensible. 

We offer a range of contract options to fix exchange rates at currency levels and also to automatically purchase when a desired rate is hit (stop / loss and limit order). Speaking with or emailing us with a brief outline of your situation carries no obligation. We are currency specialists who are here to assist in the safe planning and execution of your transfers.

The real risk on exchange rates is doing nothing and leaving it all to chance so to learn more please contact me Jonathan on jmw@currencies.co.uk,

I look forward to hearing from you.

Thank you,

Jonathan

BoE & ECB Keep Interest Rates on Hold (Matthew Vassallo)

The BoE & ECB kept interest rates on hold at 0.5% and 0.05% today, a move that was widely anticipated. The BoE also indicated they would not be adding to the current Quantitative Easing programme, which currently stands at £375bn. Any rise in UK interest rates is now likely to be pushed back until late next year, which is likely to dampen investor confidence in the Pound. The cynic in me believes this may be a prudent ploy by the BoE to keep the Pound’s value under control, amid the on-going economic difficulties faced by the Eurozone, as they will not want the Pound’s value spiralling out of control.

The USD has continued its recent run against GBP, with 1.60 now looking like the benchmark for Cable exchange rates. We had seen the Pound trade closer to 1.65 for a sustained period but moving forward it looks as though the USD will now find support below that level and I wouldn’t be surprised if GBP/USD rates were back around 1.55 come Christmas.

It’s been a volatile few days for GBP/AUD exchange rates, with the Pound gaining unexpected ground earlier this week. GBP spiked over four cents during Wednesday’s trading, with the Pound moving through 1.86 at the high. This move was, for the most part attributed to a 0.7% decline in Brent oil futures, which caused a major selloff of commodity based currencies such as the AUD.

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

Tomorrow’s Non Farm Payroll could be more important than the rate decisions today!

US ~Non Farm Payroll data is due tomorrow which could be a big market mover as it is the first one since the US stopped their QE programme. Today’s meeting with Mario Draghi might also be very interesting and should be a market mover, the least interesting thing is probably the UK’s Bank of England decision which is not expected to yield anything new.

How can you make a decision on when is the right time to enter the market if you don’t know what is happening? The idea of this blog is to provide information on just where rates are headed and make sure you get the best price when you do decide to enter the market. If you have a transaction that you need to consider why not get in touch with our specialist team to find out more about moving money internationally at the very best rates.

Sterling has done really well this year as the UK economy improves and investors position themselves for the UK to raise interest rates. Next year we would expect the UK elections to move the market, the increased uncertainty surrounding the political situation in the UK is bound to cause ripples on exchange rates.

When considering making a currency exchange understanding what is driving the exchange rate is vital to getting the most from the market.  Please contact  Jonathan on jmw@currencies.co.uk for a quick overview of your position and to learn more about getting the best rates.

What to look out for on the pound in the coming months…

When considering making a currency exchange an understanding of what is driving the exchange rate is vital to getting the most from the market. How can you make a decision on when is the right time to enter the market if you don’t know what is happening? The idea of this blog is to provide information on just where rates are headed and make sure you get the best price when you do decide to enter the market.

Sterling has done really well this year as the UK economy improves and investors position themselves for the UK to raise interest rates. Next year we would expect the UK elections to move the market, the increased uncertainty surrounding the political situation in the UK is bound to cause ripples on exchange rates. If you have a transaction that you need to consider why not get in touch with our specialist team to find out more about moving money internationally at the very best rates.

Please contact me Jonathan on jmw@currencies.co.uk for a quick overview of your position

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

Sterling has had a mixed week on the markets so far following a run of inconsistent economic data releases. Despite GBP/EUR spiking back to 1.27 on the exchange, I do not anticipate any major spikes for GBP against either the EUR or USD from the current position. With UK inflation now at a five year low, coupled with our growth forecast being cut for 2015 means the Pound is likely to struggle, especially in the short-term.

Eurozone Consumer Confidence figures came out as expected today and were up on last month’s figure and this is also likely to help the EUR to find support around 1.27 and I still feel it is far more likely that we will see GBP/EUR move back towards 1.25 than spike up to 1.30 and considering we are still trading very close to a two year high on the pair, I would be tempted to consider my position around the current levels if you do have an upcoming EUR purchase.

GBP/USD is currently floating around 1.60, with the USD spiking yesterday following the US FED’s decision to end their current Quantitative Easing programme. This is an indication that the US economic recovery is now moving ahead of the UK’s and I would be very surprised if GBP/USD moves back through 1.60 for any sustained period in the lead up to Christmas.

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 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

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