Tag Archives: sterling forecast

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

Has the pound bottomed out yet?

Yesterday’s news of the interest rate cut was not wholly unexpected but the measures including 50bn of QE and a new ‘Term Funding Scheme’ were not priced in helping contribute to GBP weakness. So is this the end or the beginning of measures by the Bank of England and where will sterling head next?

Even in yesterday’s meeting the BoE were signalling further cuts and this indicates to me sterling could have further to fall. The pound is essentially a barometer of the health of the UK and with all the business and consumer survey’s so far pointing towards a decline it seems like the data will in the short term only get worse. IHS Markit which surveys the recruitment and employment Industry has reported today a two month decline in the number of people finding a permanent job. If Unemployment is shown to be going up over the next few months then sterling will undoubtedly come under further pressure. September 15th is the next Bank of England meeting and we could easily see another interest rate cut then. If you are considering any kind of transaction buying or selling the pound and wish to be kept informed and secure a better rate of exchange why not get in touch with me Jonathan on jmw@currencies.co.uk. Any information is completely free of charge and at no obligation, please note I can only offer information for clients moving over£10,000 on a bank to bank transfer eg business and overseas property buyers and sellers.

Although it is difficult to be overly optimistic at present we do appear to have avoided the worst case scenarios so far. Sterling is still trading against the Euro in the high teens and remains above 1.30 on GBPUSD. Many of the big banks predicted Brexit would lead to GBPUSD hitting 1.20 and parity or 1 for 1 on GBPEUR. We are by no means out of the woods but the UK does now have a new PM and a base to work from in order to secure Brexit. As we learn of further Brexit news the pound could rise but with Article 50 unlikely to be invoked until 2017 there is lots of time for sterling to languish and markets to digest the situation.

Generally speaking if you are buying a foreign currency with the pound moving sooner rather than later and trading on any spikes is probably the safest bet to avoid further disappointment. If you have a transfer you are debating please contact me to learn more. This site is primarily to provide market news but we can help save you money on your currency exchanges too. I have many clients with currency accounts with some of the UK’s top currency brokerages and they always come back to me because I can undercut other company exchange rates. Any information from me is completely free of charge and at no obligation, I am sure I can make it worth a quick email. Please email me Jonathan Watson on jmw@currencies.co.uk to learn more.

Tomorrow’s BoE Interest Rate Decision Key for Sterling (Matthew Vassallo)

Sterling’s short-term valuation is likely to be determined by tomorrow’s Bank of England (BoE) interest rate decision and subsequent monetary policy statement. The majority of investors and analysts alike feel that a rate cut and/or an increase in monetary policy is likely, in order to support our stagnating economy. This outcome is likely to be at least in part, factored into Sterling’s current valuation. Therefore whilst I do not expect a rate cut to boost the Pound’s value, we may not see an overly aggressive drop if the anticipated 0.25% cut does indeed come to fruition. I do feel however, that a rate cut alongside an increase in the BoE’s Quantitative Easing (QE) programme is likely to put additional pressure on GBP exchange rates and a drop in the Pound’s value is the likely outcome.

The UK economy has been clouded by negative market perception since our decision to leave the EU and whilst Sterling found a foothold following some political stability, the overall perception has remained cautionary. The uncertain position the UK finds itself in is unique and therefore until we have at some clear understanding of how and when we will facilitate our exit from the EU, any aggressive, sustainable Sterling gains are unlikely.

We also need to consider the possibility that governor Mark Carney & the BoE will decide to keep rates on hold and not adjust our QE programme. If this were to occur I would expect Sterling to spike but based on Carney’s recent comments and pre-warnings about how a Brexit would negatively affect the UK economy, I do expect some action to be taken.

Under current conditions those clients holding GBP should be looking at short-term opportunities, as we’ve seen this morning following worse than expected Eurozone Retail Sales figures. This has inadvertently pushed Sterling’s value up but whilst we continue to see this distorted movement, it is extremely difficult to forecast even for a few weeks.

For that reason I would be looking to protect any Sterling positions ahead of tomorrow’s BoE interest rate decision at Midday and not gamble on what has become an increasingly volatile and uncertain market.

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 you current provider, then please feel free to contact me on 0044 1494  directly on mtv@currencies.co.uk

Will an Interest Rate cut weaken Sterling exchange rates this week? (Joseph Wright)

It’s looking highly likely that the Bank of England’s Monetary Policy Committee will cut the UK base rate this Thursday. The likely outcome will be a cut of 25 basis points down from 0.5% to 0.25% and I think that currency markets have already begun pricing in this drop as we’ve seen the Pound soften over the past few trading sessions with GBP/EUR dropping down into the 1.17’s yesterday for the first time in almost 3 weeks.

Mark Carney, the governor of the Bank of England did allude to a rate cut in the immediate aftermath of the ‘Brexit’ in order to mitigate the negative effects to the UK economy created by leaving the European Union, and then yesterday weak Manufacturing Data out of the UK added further fuel to the fire for a base rate cut this week.

Interest Rate cuts usually weaken the underlying currency so it’s important that anyone either buying or selling the Pound at the moment is aware of this likely move.

In terms of the Pound and its likely future movements, I’m not expecting a massive drop if the rate is cut because it’s expected, but I am expecting the Pound to weaken slightly in the lead up to Thursday and I think as the year goes on we could see the Pound fall further as economic news released paints a gloomy view of the UK’s economy now that the UK has left the EU, and uncertainty surrounds the UK economy.

Those with a currency requirement whereby they need to convert Pounds into another foreign currency may wish to consider making their conversion sooner as opposed to later, as should the UK economy continue to disappoint post ‘Brexit’ I think we could see the Pound soften quite a lot further.

If you would like to discuss the timing of an upcoming currency requirement you have, feel free to get in contact with me (Joe) 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 on 01494 787 478 and ask reception for Joe. 

How much lower could the pound fall?

Sterling is much weaker following the Brexit, at present around 10% versus both the Euro and US dollar. At times it has been around 13% lower than the pre-Brexit highs. So just what is next and could the pound fall lower? We will very soon have an answer and any clients considering buying or selling the pound should not be feeling too complacent at the moment. Next week is the Bank of England Interest Rate decision where there is a very high chance the Bank of England will look to cut interest rates or even discuss a new Quantitative Easing program. The last time the BoE launched a QE program and had cut interest rates GBPEUR exchange rates dropped to almost parity at 1.02!

I am not suggesting that this is the kind of fall we will see next week but i am suggesting the potential for events next week to cause some big swings from the status quo. The outlook for the pound is one of great uncertainty and despite there being some good news around, we haven’t yet even begun to fully understand what the Brexit vote has done to the economy. It will take many months before we know exactly what is happening but the initial flash readings of business sentiment have so far not suggested it is good news all over.

Brexit is not in itself a bad thing and I am not taking a view on the Brexit here. What I am doing is highlighting the impact on the economy, financial markets and business need certainty to conduct their operations and at the moment it is something we are lacking. If you are considering a currency transfer involving buying or selling the pound we are not here to just provide information but can also help with the planning and execution of any transactions you will need to make. If you need to transfer more than £10,000 worth of currency (including bringing large volumes back to the UK or to buy pounds with) I am very sure we can get you a better deal than your bank or current provider.

We aim to proactively manage our client requirements so we don’t just help them save money on the exchange rate by beating the competition, we also offer strategy on the best times to consider entering the market. If you have a transfer to consider please call me Jonathan on 01494 787 478 or get in touch via email on jmw@currencies.co.uk and I am sure I can offer some useful information and a rate which will save you money.

Positive GDP figures do little to boost Sterling, is it all doom and gloom from here? (Joseph Wright)

Followers of Sterling exchange rates got a bit of a surprise this morning after UK GDP figures came out better than expected . According to the Office for National Statistics UK GDP rose 0.6% in the second quarter of this year, and with the ‘Brexit’ occurring right at the end of the 2nd quarter it may be the last reading of an economic improvement for some time in the UK.

Those hoping for an improvement in the value of Sterling may be feeling a little deflated at the moment, as this morning’s GDP figures will be the last recording of how the UK economy was performing prior to the ‘Brexit’. Many had hoped for an upward spike in Sterling’s value off the back of the figures coming out better than expected by analysts, but that hasn’t happened and my personal feeling is from this point onward it may be some time until Sterling is boosted off the back of good economic performance in the UK.

As recent as last Friday the UK released Service and Manufacturing data for the first time since the ‘Brexit’. Those economic news releases make it difficult to remain optimistic as the uncertainty surrounding the UK has begun to damage the economy, with economic activity falling to it’s lowest level since 2009 according to those figures released.

With today’s positive news doing little to nothing for Sterling’s value I’m expecting any further negative news releases to impact the Pounds value quite heavily.

Those concerned over the falling rate of Sterling’s value may wish to consider making their conversions sooner as opposed to later, as prior to the ‘Brexit’ many renowned analysts predicted parity for GBP/EUR exchange rates, and GBP/USD has already fallen to a 31 year low with potential for the pair to fall further.

The next key date for Sterling will be the 4th of August, many are expecting an interest rate cut by the Monetary Policy Committee on that date and should that occur, it’s likely the Pound will fall further so pencil that date into your diary.

If you are planning to use GBP to buy or sell a foreign currency it may well be worth your time getting in contact with 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 and ask reception for Joe on 01494 787 478.

 

 

 

Will UK GDP Figures Boost Sterling’s Value? (Matthew Vassallo)

Sterling exchange rates continue to hang in the balance, ahead of this morning’s UK Gross Domestic Product (GDP) figures. With an improvement on the previous figure expected, we could see Sterling start to put pressure back on 1.20 against the EUR and 1.32 against the USD. However, there is also an argument to make that the improvement has now been factored into the current market and we are only likely to see an aggressive move if the official reading comes outside of the 0.5% growth expected.

It’s a strange time for those clients holding Sterling, with the initial fallout from the Brexit now digested by the markets. Whilst the Pound has gained some traction following some political stability in the UK and the Bank of England’s (BoE) decision not to cut interest rates this month but there is still a feeling that we see further slippage at any time. The Pound remains extremely fragile and I do not expect any sustained improvement, or increased investor confidence under current market conditions. It is far more likely that the Pound’s value will be boosted by other factors, most prominently any downturn in other economies, such as the Eurozone. If investor confidence wains over the coming months, which is highly likely due further economic problems on the horizon for Greece & Italy, the EUR will start to lose value. This in turn will benefit the Pound but I do not see any major advances against either the EUR or USD in the short-term.

It may be prudent for those clients holding GBP to protect themselves ahead of the BoE’s next interest rate decision on August 4th. With a rate cut highly likely in my opinion and a possible increase in monetary policy (QE), the recent gains seen for Sterling could be short-lived.

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, I can be emailed directly on mtv@currencies.co.uk