Tag Archives: sterling forecast

What really lies ahead for sterling exchange rates?

The rollercoaster ride of 2016 on sterling exchange rates is far from over! There are still numerous events up ahead to trigger large unexpected swings that will impact the value of your currency purchase, have you made any plans for this? Understanding how markets react, all of your options and having a helpful hand to guide you through will offer a real advantage to securing the best rate of exchange.

Economic data in the UK is not the main driver for the pound, the big factor is political concerns relating to the Brexit plus attitutudes to the UK viewed from a global perspective. Take the USD this week, we saw a big devaluing in the value of sterling for no real reason other than the fact the USD was appreciating in value in the face of a possible US Interest rate rise. Sterling was sold off as traders backed the buck – more on this later. Numerous data sets showing a relatively healthy UK economy should be taken with a pinch of salt until we get the firm economic data for the the quarter since the Referendum next month.

Sterling exchange rates will remain volatile and lacking direction until we get clear direction from the UK Government as to when Article 50 will be triggered. For now clients buying and selling the pound will have to contend with the mixed messages emanating from politicians. Theresa May has said she is in no rush to trigger Article 50, Boris Johnson indicated this week it might be early 2017 – and was soon lambasted for saying this.

Looking at some of the big banks predictions on sterling rates offers little help. Lloyds are predicting 1.20 by the year end whilst Dankse Bank are showing 1.08! All in all if you are looking to buy the pound there are likely to be further improvements between now and the New Year. Much will of course depend on which currency you are holding on what happens. If you are selling US Dollars will a Trump Presidency send the USD into freefall? Or will the steady hand of Clinton see the US raise interest rates at Christmas? If you are selling Euros will a decline in Eurozone economic activity trigger a further round of Quantitative Easing by the ECB? Or will renewed confidence in the region stem from uncertainty elsewhere?

It is currently the best time to buy the pound with US Dollars in 30 years and the best in 3 years with Euros. This isn’t great news if you are holding pounds looking to US Dollars, Euros or any other currency but as you can see things could get easily get worse for sterling.

In such an uncertain market with no clear direction a careful examination of all of your options including the Stop Loss and Limit order is crucial. A Stop Loss limits any losses if rates fall, a Limit order guarantees a price if rates rise. A forward contract allows you to lock in today’s rate for settlement up to 18 months in the future. me

It is almost six months ago today I was asked to speak on the BBC regarding the Brexit. At the time I suggested that on a Leave vote the UK economy would not just wither away. I pointed to the hundreds of thousands of businesses and consumers doing trade across border and highlighted how even on a Leave vote those links would remain. I discussed with the interviewer how nothing would change quickly and markets would have time to digest any news following an initial shock. All of this has so far proved true and it is with confidence I predict that the coming months will not see any fundamental changes in the situation, I believe that will all be reserved for 2017. However there will be lots of movement on the pound as the markets react to all manner of speculation and rumour just like it has since and leading up to the vote.

If you wish to discuss all of your options, the market and what to look out for on the rates please speak to me Jonathan by emailing jmw@currencies.co.uk. I am Chief Analyst and Associate Director of the UK’s largest privately owned foreign exchange PLC brokerage and have been working for our company for 7 years of the 17 it has been in business. If you have a transaction to make I will discuss with you all of the options available and everything happening in the market to help you maximise your exchange rate. Even if you believe you have everything covered it might be useful for another pair of eyes to have a look to provide some useful information.

 

When will we see Sterling bounce back? (Daniel Johnson)

Pound Forecast

The media have been very negative following the electorate’s decision to leave the EU. At some points the fear mongering has been overbearing. However the damage has now been done and now it is time to keep calm and carry on. Although poor UK data is filtering through, I think Sterling is chronically undervalued at present and although there may be further falls the pound short term, I think the Pound will gain strength against all major currencies medium to long term. A pound rally will not be quick, trade negotiations will be long and arduous. It is estimated over two thousand skilled negotiators will be needed to get all the deals sewn up. Australia is one of the most forthcoming countries with regards to getting trade deals in place and it is estimated that will take two-and-a-half years.  So although I think the pound will recover, but do not expect 1.30 anytime soon on GBP/EUR.

The US rate decision was a non-event as predicted , despite the FED meant to be acting as a separate entity to the government I can’t help but think the election influenced the decision on  a rate hike. If Trump gets in expect USD to lose value due to his radical ideas regarding trade deals and immigration.

If  you have a currency requirement it is crucial to be in touch with an experienced broker. The timing of your trade is vital during such volatile  times, If you have an experienced broker on board he/she can keep you up to date with what is happening in the market to help you make an informed decision. Should you find our information useful and you would like me to assist with your trade I will be happy to help you personally. If you inform me of the the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the country and as such I am in a position to better virtually every competitors rate of exchange. You would also be looking at saving anything up to 4% in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog.

 

Sterling exchange rates drop once again as hopes of a ‘soft brexit’ fade, so where will the Pound go from here? (Joseph Wright)

The Pound is facing increasing pressure at the moment as the impact of the UK’s upcoming exit from the EU is unsettling financial markets.

Sterling exchange rates dropped substantially as soon as it was announced that the UK electorate had voted to leave the EU, with the GBP to USD exchange rate dropping to a 31 year low, and the GBP to EUR exchange rate dropping to a 3 year low along with many other major currency pairs.

There was a slight rebound as a number of particularly positive business surveys within key UK industries showed that a weaker Pound had actually boosted economic output within the UK in it’s new post-brexit-vote environment. That rebound has now been reversed as we edge closer to those 52 week lows, and I think it’s worth noting that cable (GBP/USD) has now dropped back below the key psychological level of 1.30 which may trigger further falls for the pair.

Now that it’s common knowledge that UK Prime Minister Theresa May will likely invoke Article 50 towards the beginning of next year, hopes of a prolonged ‘soft exit’ have dwindled and this is being reflected within currency markets as the Pound weakens pretty much on a daily basis at the moment.

Those with an upcoming currency exchange requirement which involves converting pounds into another major currency, may wish to consider moving on that sooner rather than later as many economists have predicted parity for GBP/EUR, our clients are still comfortably in excess of 10 cents from this level so moving now may be a wise decision come later in the year/next year.

Today’s major news release will be the most recent Fed Reserve Bank Interest Rate decision, and although no change is expected a move by the Fed is likely to create volatile trading conditions which we would usually trade around with our clients, as sensitive news releases such as this one can widen exchange rates and our sole purpose is to obtain great rates for our clients.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on jxw@currencies.co.uk and I will be more than happy to contact you personally to discuss the various options we have available to you.

Sterling Under Pressure – When Should I Sell my GBP Position? (Matthew Vassallo)

Sterling rates have dropped over the past week, with a run of inconsistent UK economic data handicapping any further advances for the Pound. GBP/EUR & GBP/USD in particular have shown sharp drops, with both pairs falling below 1.16 and 1.30 respectively at today’s lows. This has caused concern for those clients holding Sterling positions but as I alluded to in my previous posts, the Sterling strength seen earlier this month proved not to be sustainable. As such, any clients who did not protect their positions will now be questioning whether we will see a recovery over the coming weeks.

Whilst it is very difficult to predict exactly how the market will evolve, it has become clear that investor confidence in the UK economy and ultimately the Pound is extremely low. Sterling positions remain fragile and as such I would not be prepared to gamble on an improvement, when there is no tangible evidence to support it. The silver lining for those clients holding GBP is that the Pound did find a foothold at the beginning of the month and this was not anticipated or predicted. This is further proof of how unpredictable the current markets can be and how investors are reacting to rumours as much as fact and this makes forecasting increasingly difficult.

With so much uncertainty hanging over the UK economy it’s no real surprise to see the Pound struggling. We keep hearing different opinions of when Article 50 will be triggered, which will ultimately trigger our Brexit, and these range from February 2017 to the end of 2018 or even beyond. This is what is causing investors to sell off their GBP positions and as such the Pound’s value is decreasing. Until this market uncertainty is removed I feel there will be a cap on how far Sterling can rise and whilst it’s difficult to pin point an exact benchmark this could be as low as 1.80/1.85. Whilst these levels seem very attractive in the current climate are you prepare to gamble on a potential 10 cent loss in order to gain only a few? These are the questions investors and clients need to ask themselves because whilst market conditions can change quickly and aggressively, there is no easy way to gauge how long the current trend will last.

A key decision now will be whether or not the Bank of England (BoE) cut interest rates again before the end of the year. With the markets now seemingly leaning towards this occurring, if it does come to fruition, expect things to get worse for the UK economy and ultimately the Pound before they get better.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one, then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the UK, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me Matthew Vassallo directly on mtv@currencies.co.uk and I will be more than happy to contact you personally to discuss the various options we have available to you.

 

Sterling Drops Following BoE Interest Rate Decision (Matthew Vassallo)

It’s been a busy day for investors, with a host of key UK economic data releases taking centre stage. The markets were primed as the latest Bank of England (BoE) interest rate decision was released, along with the subsequent minutes. This was preceded by UK Retail Sales figures, alongside a host of Eurozone and US inflation data released throughout the day.

Whilst the BoE decided to keep rates on hold at 0.25% as widely anticipated, it was the summary and minutes which caused the markets to shift. The BoE remained very cautious in their address and left themselves open to a further rate cut if necessary. The fact they mentioned this could come before the end of the year threw the markets into chaos and the Pound took a hit across the board as a result.

Sterling immediately lost value against the EUR & USD. GBP/EUR fell towards 1.17 at the low, whilst GBP/USD fell below 1.32. This once again proves how fragile the UK economy remains and how investor confidence remains cautious at best. For this reason, I continue to stress to any clients holding Sterling positions that they should be looking to protect themselves at every opportunity, as uncertainty breads fear and fear is likely to cause the currency in question to contract.

The Pound had lost value yesterday against both currencies following poor UK inflation data but this slide was halted following better than expected UK Retail Sales figures this morning. We have seen a run of extremely inconsistent data for the UK and whilst it did finally find a foothold in the market after some strong Manufacturing & Construction figures, it was not enough to protect Sterling form the inevitable drop off.

Whilst so much uncertainty continues to engulf the UK economy, which seems to be stuck in a relative state of limbo, the Pound will struggle to make a sustainable impart against either the EUR or USD under current market conditions.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one, then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the UK, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me directly on mtv@currencies.co.uk and I will be more than happy to contact you personally to discuss the various options we have available to you.

Will Sterling’s Recovery Continue? (Matthew Vassallo)

Sterling has started to claw back some of the ground its lost against the EUR since the Brexit decision, with GBP/EUR rates putting pressure on 1.20 during Tuesday’s trading. Despite the pair dropping back slightly following the close of European trading, the Pound has clearly benefitted from the recent run of strong UK economic data.

The catalyst for Sterling’s spike was last week’s Manufacturing & Construction data, both of which came in well above market expectation. The is always key for investors who will price in the expected result of any key economic data release. If the figure comes in outside of this we usually see increase market volatility, as happened with Sterling last week. This gives short-term opportunities to those clients holding the Pound to trade above levels they may have expected.

Whilst the Pounds positon is looking far healthier than it was a couple of months ago, we need to remember there is still a huge amount of uncertainty surrounding the UK’s current economic positions. We are still no closer to understanding how and when we will facilitate our exit from the EU and the potential impact this will have on GBP exchange rates. Those clients holding Sterling have been given a short-term opportunity to trade almost five cents higher than we sat only a month ago and I would extremely tempted to take advantage of this position and not gamble on what is still a very volatile and unpredictable market.

Looking at GBP/USD rates and again we’ve seen the Pound bounce back, with rates moving back above 1.34 at today’s high. With the US election campaigns starting to take centre stage, I expect further volatility as we head towards Novembers vote. The more the polls narrow the more pressure I expect the USD to come under pressure, as the markets do not view a Donald Trump victory as the positive outcome. Therefore, I would be looking to take advantage of the near 30 year highs and not gamble on another major spike for the Greenback.

If you have an upcoming Sterling 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 0044 1494 787 478 and ask one of my team for Matt. Alternatively, you can register your details through this page, or email me directly on mtv@currencies.co.uk

Sterling continues its recovery as UK growth estimates meet expectations, but will the recovery continue? (Joseph Wright)

It’s been quite a bullish week for the Pound this week as economic data releases have impressed and Sterling has gained a good few cents vs many other major currency pairs.

Towards the end of last week the UK’s Retail Sales Figures for July were better than expected, and this week the weak Pound has resulted in the UK’s Manufacturing Output reaching a 2 year high as people overseas are keen to pick up goods at low prices. These positive sets of data, coupled with today’s Gross Domestic Product estimates coming out as expected,  have boosted sentiment towards the Pound as this has been reflected within currency markets as the Pound has gained almost 3 cents vs the US Dollar, and almost 2 cents vs the Euro.

Those that plan to convert their Sterling into a foreign currency at a higher rate will of course be hoping that the Pound continues to climb, and whilst I think it may do, there are a number of risks to holding off so it may be an idea to make at least part of that trade at current levels with the hope of averaging up in future. This is an approach many of our clients are currently taking and we’re here to help by keeping them updated with what’s going on in the marketplace.

Those who plan to purchase Pounds, by converting their Euros,US Dollars or Aussie Dollars for example, may wish to get in contact and check whether our rates are better than your current providers/banks as whilst current levels are particularly favourable, a return to risky attitudes from investors is likely to drive up Sterling’s value, especially if economic data out of the UK continues to surprisingly impress.

Major economic announcements that could sway markets next week are Thursday’s Manufacturing Data which is expected to show an improvement, and then next Friday will be Non-Farm Payroll and Unemployment Data out of the US. If you would like to discuss these and how they can affect markets, do get in touch and I’ll be happy to explain.

If you would like to discuss an upcoming currency requirement you’re planning, in terms of the timings and getting the best rate of exchange available, feel free to contact me on jxw@currencies.co.uk  in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call in directly to reception and ask for Joe on 01494 787 478.

How will Friday’s UK GDP Figures Affect Sterling Exchange Rates? (Matthew Vassallo)

Sterling has found some much needed support over the early part of the trading week, recovering ground against both the EUR & USD. The Pound has benefited from some improved economic data late last week, with Unemployment data and UK Retail Sales figures coming in better than expected.

This in turn boosted GBP/EUR rates, with the pair hitting 1.1784 at the high and bringing some much needed respite to those clients holding the Pound, following weeks of devaluation. These losses were born out of a complete lack of confidence in the UK economy, with investors risk appetite dissipated by the uncertainty caused by the UK’s decision to exit the EU. This is and will remain to be the underlying reason behind Sterling recent demise, with the Bank of England (BoE) cementing the downfall with their recent interest rate cut. With the possibility of further monetary easing (QE) and/or another rate cut, we may see the situation get worse before it gets better.

GBP/USD rates have seen a similar trend, with the pair falling below 1.30 at the recent low. Despite an improvement above this threshold, I do anticipate a sustained recovery anytime soon, certainly not under current market conditions. The greenback has made huge strides since the turn of the year, in line with economic improvements in the US and despite the political battle between Donald Trump & Hilary Clinton heating up ahead of Novembers election, I do not expect a recovery back towards 1.40 until we at least have some clarity on when and how the British government are likely to facilitate our Brexit.

Once some of this uncertainty has been removed then the Pound has a better chance of recovering its losses but until then I would be looking to protect any short to medium-term Sterling positions, with further market volatility expected.

If you have an upcoming GBP 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 0044 1494 787 478 and ask one of the team for Matt. Alternatively, you can email me directly on mtv@currencies.co.uk

GBPEUR forecast (Dayle Littlejohn)

This week HSBC Holdings Plc and UBS Group AG have indicated the future is not bright for the UK due to the ‘Brexit’ and they both believe GBPEUR exchange rates will reach parity at some stage next year. For people buying euros this should ring alarm bells where as euros sellers should feel their are extra pounds to be made.

Personally I disagree with the forecasts. Italy and Greece (two countries within the European union) have problems of their own. Banks within both countries are struggling with debt and they have both eluded to breaking EU laws to stay afloat. I believe rates will fluctuate in the mid teens and over time will drop to 1.10, however I just feel the UK economy is in a better position than the Eurozone and that’s why we will not see parity.

Tomorrow morning the UK release their latest Mortgage approval numbers. A drop is expected which isn’t a surprise. The public at the moment are acting cautiously due to what they read in the press about the ‘Brexit’. Expect sterling weakness tomorrow morning.

If I have not covered the currency pair you are trading feel free to email me the currency pair you are trading (GBPUSD, GBPAUD, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast for the currency pair drl@currencies.co.uk.

My area of expertise is property purchases and sales. Therefore if you need to purchase a foreign currency or you are about to complete on a sale abroad, today is the day to get in touch to discuss your options and to get an understanding of how we can save you as much money as possible.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

Sterling rates have remained fairly flat during Wednesday’s trading, with the latest UK unemployment rate coming out as expected. The official reading of 4.9% was likely factored into the current GBP exchange rates by investors and as such we saw very little movement on the exchange.

Sterling did however, receive a timely boost yesterday, with UK inflation data coming in above market expectation. Despite levels remaining relatively low and a long way from the government’s target of 2%, the official readings helped GBP gain some traction against the EUR, USD & AUD. With so much uncertainty surrounding the UK economy at present any positive readings are welcomed by those clients holding GBP, who have had to watch the Pound’s value disintegrate over recent weeks.

Inflation levels have been the cause of much debate and are seen as a key market trigger for investors. Given their relevance in terms of the health of the overall economy, this positive reading may help to alleviate some of the pressure that has been building on Sterling over recent weeks.  How the Bank of England (BoE) will look to counter any aggressive rises in inflation is yet to be debated but for now the small improvements seen are likely to give GBP some much needed market support.

Personally I am of the opinion that Sterling will find a foothold sooner rather than later and we should get some protection around the current levels. We still remain well above the lows of 2008 and whilst it is likely that the longer-term Brexit outlook will restrict any aggressive Sterling advances above 1.20, I don’t believe it is all doom & gloom as some analysts are predicting.

Any client holding GBP should be aware of the pitfalls they currently face and it may be wise to protect themselves against a negative market by utilising one of our forward contracts, which are in place for situations such as this. They can give you piece of mind during a turbulent period and allow clients to budget on their foreign property and asset purchases, helping to remove the fear of further market drops.

If you have an upcoming GBP 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 0044 1494 787 478 and ask for Matt. Alternatively, you can register your details through this blog or email me directly on mtv@currencies.co.uk