Tag Archives: sterling forecast

Great Expectations… GBP Weakness…

The pound has dipped this morning despite a raft of good economic data showing improvements in government borrowing and falling budget deficit. There had been some high expectations of seeing the pound move higher due to a more hawkish outlook by the Bank of England but this failed to materialise. As one of my clients said to me ‘you can’t even trust the Bank of England’ nowadays…

This was in reference to their commitment to consider raising interest rates if the Unemployment rate dipped below 7%. This particular caveat was of course met recently causing the pound to spike but for now the BoE will not be raising interest rates, it would simply cause more problems.

If you are expecting the pound to just keep rising you could therefore be very disappointed as we need to see some really good data to warrant such a spike. I find the best way to maximise your return on your currency exchange is to set realistic targets and limits. If you would like some assistance in the execution and planning of your transfers please contact me Jonathan on jmw@currencies.co.uk, even if your transfer is just a once off, we can help get you the most for your money.

Thank you,

Jonathan

 

 

GBP/EUR back over 1.21. Attractive buying Euro rates (Ben Amrany)

Key UK inflation figures were released this morning and has given the pound a tidy boost after weakening against many of the majors overnight. UK BRC retail sales monitor came in much lower than expected with a reading of -1.7%  against the consensus of -1.0% This did hurt the pound in early morning trading with GBP/EUR falling to 1.2067. Inflation figures measuring 1.6% assisted a rebound. Now although CPI is below the Government’s 2% target many analysts were predicting a steeper fall which would have raised questions whether the UK economy could cope with an interest rate hike next year.

The retail figures go to show that competition on the high street is fierce and is assisting this drop in Inflation. Now, should inflation remain low and stay below wage rises then this will give the BoE some relief that an interest rate hike next year could be coped with by the economy. This is what has given the pound a boost. If wages rise at a lower rate than  the inflation figure then the public would have less to spend and could cause a hole within the economy and the chances of a rate hike would be less likely hence harming the pound.

Looking forward tomorrow at 9.30 the key employment numbers for the UK will be very heavily scrutinized as the unemployment number is being directly linked to when an interest rate hike may occur due to the Mark Carney’s (Governor of the Bank of England) previous comments that interest rates may rise when unemployment falls below 7%.  The number is expected to fall from 7.2% to 7.1% Although this does not sound like a big movement the mere fact that we may get closer to 7% could give the pound a boost tomorrow morning against a host of the majors.  

The pound in general has been very volatile over the course of this year with significant losses against the southern hemisphere currencies in the last month but with gains against many of the majors like the USD & EUR. Depending on the currency you are buying or selling we may recommend different strategies to help you maximise your exchange. To find out my thoughts on the best solution for your currency exchange you may email me directly at bma@currencies.co.uk

If you feel that you would like assistance with an up and coming currency transfer you have to make we will strive to help you beat the rate of exchange your bank will offer you. Our savings can be up to 4% and I will also offer a very personal service to help you judge when you should buy the currency you require. if I know what your requirement is I can recommend the best options available to you.

If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk 

 

 

 

 

 

 

Sterling slides after BoE interest rate decision. Still best rates for buying the USD & Euro. (Ben Amrany)

The pound has weakened today after we learnt that the Bank of England kept their base rate of interest on hold at 0.5% for the month of April. It also left its Asset purchasing programme on hold too. We were not expecting any rate hike which would have strengthened the pound and GBP/EUR is now at 1.2076 GBP/USD 1.6780 GBP/AUD 1.7810.

Now until the bank of England look at hiking interest rates we will not see any real significant rises for the pound. We are expecting them to raise rates in 2015 and before other central banks providing economic activity continues to grow. The central bank does have an obligation not to raise the interest rates to quickly as this could hamper the UK economies growth. With low inflation and an unemployment rate that’s above 7% it seems not a great deal will happen this year.

In other news Greece have returned to debt markets for the first time since 2010. This is giving the single currency a boost and has risen on average by 0.35% today against the pound and US Dollar. It seems the European bond market has advanced after the Federal Reserve minutes (US) damped speculation that policy makers are moving toward raising interest rates anytime soon. One main reason why the USD is weakening at an alarming rate against the pound.

I feel going forward that GBP/EUR will rebound as the risk of inflation continuing to fall will have to be dealt with at some stage by the European Central Bank and i fully expect the rate to head back above 1.21 soon. For GBP/USD with the news from the latest minutes stating a rate hike is unlikely in teh next few months the pound will probably try to test 1.70 but i do think there will be a big resistance level and will then fall once getting close. Rates at the moment are around a 4 year high. If you are buying the Dollar why take the risk on this.

If you do require to buy or sell any of the major currencies then we are here to help you achieve a better rate of exchange than your bank. Savings can be up to 4% and we will give you our expert knowledge to help you time your transfer. if you feel you would like to know more about our service then please do email myself Ben Amrany at bma@currencies.co.uk with your contact details and requirement and we can then discuss the options available to you.

If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk

 

 

 

How will the pound perform in April?

Well what a difference a year makes. A year ago sterling was trading at a low of 1.16 and economists were lining up to explain a possible triple dip recession. Most of the UK was also enjoying a nice thick blanket of snow too!  Since then the pound has made a solid recovery and we are predicted one of the hottest summers in years, although just like forecasting currency movements, forecasting weather can be unreliable.

The advantage of forecasting currency however is market knowledge and understanding of what is actually driving exchange rates. 80% of currency transactions and therefore 80% of the reasoning behind currency movements is speculative. That is investors buying and selling foreign exchange to make a profit. Once you understand some of the key things they are looking for, you can begin to understand and forecast what may happen in the future.

This week there are a range of data releases which could affect sterling and also the currency pairs it trades against. One important thing to point out at this stage is interest rates. Interest rates affect currency in a similar way to the way a higher or lower interest rate affects a bank account. So as a central bank (the Bank of England, European Central Bank, Federal Reserve) seek to raise or lower their base interest rate investors (remember most currency movements are speculative) move money around according to where they feel it will offer the best return. To learn what will affect your transaction this month email me jmw@currencies.co.uk. This may be of interest for anyone buying or selling an overseas property, anyone who needs to move a large volume of currency and wants to get the best deal.

The UK is looking at raising interest rates well ahead of other leading economies which is an underlying reason why sterling is stronger against a range of currencies. Having been set at 0.5% for close to 5 years now there is an expectation interest rates will rise in 2015. As we are slowly coming out of this abnormal period of low interest rates (and it will be slow and gradual) we will start to see sterling exchange rates rise.

Getting the best exchange rate involves looking at the timescales that you have and assessing the market in that period. This website has directly assisted 1000′s of clients and is also read by many more who I am sure appreciate our expert opinion and knowledge. If you are considering a currency exchange buying or selling the pound understanding what is likely to happen on the market is the best way to maximise your return. We offer a personal proactive service to maximise your exchange rate through careful monitoring and analysis of the market and your unique position.

As we buy direct into the currency market we would never have real trouble undercutting other sources of currency such as and including currency brokers and banks. Making a comparison on a large volume of currency could potentially save you hundreds if not thousands of pounds. If you would like to learn more please contact me Jonathan on jmw@currencies.co.uk or please call 01494 787 478

Will the pound weaken again?

Sterling has found favour today due to the impressive Retail Sales figures showing the UK is on the up. Sterling seems to have shaken off the more recent wobbles and is now looking like a safe bet to make further gains in the future. If you need to make a transaction involving the pound, I would strongly recommend speaking to us to find out the very best rates of exchange and allow us to explain the current forecast. Please feel free to drop me a line on jmw@currencies.co.uk

The outlook on the pound is positive and the recent euro gains against the pound look set to be on the back burner for the time being. If you need to sell euros to buy the pound then I would focus on making the transaction sooner rather than later as the longer term prediction would appear to favour GBP. The main driver in this situation will be the likelihood of any interest rate hike, tomorrow’s UK GDP data whilst old news, could act as a very interesting trigger for further GBP strength.

We are currency specialists, experts in forecasting and managing client risk to the foreign exchange market. If you need to make a transaction and want the very best rates and service please contact me Jonathan on jmw@currencies.co.uk. I am very confident of being able to undercut any other firms and save you money.

Important Information on the pound if you have a currency exchange soon! Best rates in 2014 to sell EUR for GBP… (Jonathan Watson)

As predicted here back in February on this website the pound has suffered due to the bad weather. It has been ticking down lower against pretty much everything notably a much stronger Euro. This is partly due to all the economic data releases showing declines in the rates of growth as people struggled to get to work and businesses were closed. So we know why rates have ticked down, the question is what will happen next?

“Next week is a whole host of very important UK data which will very likely to move sterling exchange rates”

If you need to buy or sell sterling in the coming days and weeks you should take note of the UK Budget, UK Unemployment data and the Bank of England minutes next week. There is a very strong chance sterling could rise or fall on this data and making any clear prediction is incredibly difficult. If I was to stick my chin out I would probably say the pound would rise, I would rather be selling the pound than buying it. And that is why if you need to sell a foreign currency to buy the pound I would be making preparations for these key events.

Currency Transfer soon? We are currency specialists who offer much better exchange rates than the banks and other sources. If you are currently speaking to another company or the bank about a large volume currency exchange you should speak to me too to check your exchange rate. We source exchange rates direct from the market and this allows us to undercut other companies, I am confident I can show you a saving. Even a small difference in the price on a large volume of currency makes a major difference in the amount of currency you receive.

We offer a personal proactive service to manage your exposure to the currency markets. If you are considering something soon and would like a quick overview on the rates, process, current market and forecast please contact me Jonathan on jmw@currencies.co.uk or call 01494 787 478 during UK business hours.

Negative Trend for GBP Continues (Matthew Vassallo)

It’s been a poor start to the trading week for GBP exchange rates, with loses against most of the major currencies, including the EUR and USD. We’ve seen GBP/EUR exchange rates fall below 1.20 on the exchange for the first time in months and it does seem as if Sterling’s recent run is coming to an end. Whilst I do not anticipate the EUR to erase all of the loses of the past two years, it is likely GBP will struggle to make any serious inroads unless there is now a shift in market sentiment. As mentioned in my previous blogs GBP had struggled to break through 1.22, finding a lot of resistance around this level and it is no surprise to see GBP/EUR exchange rates fall away from this high, especially when you consider the bullish comments made by European Central Bank (ECB) president during his press conference last Thursday. This coupled with some mixed data for the UK has handicapped GBP in the short-term.

GBP/USD rates have also dropped during Monday’s trading, with rates now floating between 1.66-1.67 on the exchange. We have anticipated a positive move for the USD for some time and whilst we cannot say that is necessarily the start of that trend, I do believe it is only a matter of time until the current levels look extremely attractive for anyone looking to purchase USD.

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 exchange rates with your current provider, then please feel free to contact me directly at mtv@currencies.co.uk.

Flat day trading for sterling exchange rates. (Ben Amrany)

Sterling has had a fairly flat week across the board and has struggled to breach rates of 1.22 against the Euro, 1.67 against the US Dollar and 1.86 against the AUD. The rates have been fairly flat due to not a great deal happening of a positive note for the UK economy. We had the GDP figures out this morning and the ONS showed that the UK economy grew by 0.7% in the final quarter of 2013. This was unchanged from the previous estimate. However the estimate for growth in 2014 as a whole was cut down to 1.8% from 1.9%. These figures have stopped sterling exchange rates really pushing on.

Against the Euro I would expect to see the pound rise  over the next two trading days as there is a lot of data out from Germany which could assist a spike for the pound. We have their unemployment figures out tomorrow and then their inflation figures on Friday. If inflation continues to fall this will heap pressure on the Euro and will make things worse for Euro sellers. If you are buying the Euro then trading on spikes in the market may well be the way to go to capitalise on the favorable movement.

If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk

 

 

Sterling weakness up ahead? Why now is a good time to buy the pound

Jonathan Watson

Jonathan Watson

Currently sterling is well supported largely due to the strong likelihood of the UK raising interest rates next year. Investors are taking up positions on sterling in anticipation of better returns in the future. 80% of currency transactions are speculative and whilst this is not a topic we deal in for clients , it is a topic that is extremely relevant in determining future market movements for our clients.

Longer term sterling appears bound to increase significantly as the prospect of ultra low interest rates becomes the past. The pound has been flirting with 5 year highs on a trade weighted basis which when you consider interest rates have been at rock bottom for 5 years makes sense.

Since we won’t actually see any actual hike for some time there is certainly a good chance of more GBP weakness but it will be in pockets and not reflective of a greater downward trend. If you are going to need to purchase the pound in the future moving sooner is I believe the best course of action. Please contact me directly for assistance in sourcing the best rates and the optimum peaks to trade on. I assure you of being able to beat the banks and currency brokerages.

Many of my clients selling say Euros and Dollars after a property sale are quibbling over the fact they are trading at multi year lows. I wholly sympathise with these clients because when you do the calculation on the losses selling six figure sums in the last year they are substantial. But if you look further back say at the 10 year and 5 year figures you will see current rates are not so bad.

Take Mr Smith in France for example, who may have purchased there when rates were say 1.50. Imagine buying a 200,000 Euro property at 1.50. This would have cost you 133333.33 GBP. Fast forward ten years and unfortunately he has had to sell to come back to the UK and had to take a hit on the price. He had to sell for 175,000 Euros and was not happy at having lost 25,000 on the price. However he managed to get 1.20 on the rate which means his 175,000 Euros are actually worth 145833.33 GBP. Suddenly it is not such a bad deal and when he considers all the fun times he had there, the whole experience has actually not been too bad!

This just shows the importance of exchange rates when considering overseas transactions. Sterling is at a very good level now which may yet improve. Understanding what is driving exchange rates is critical to getting the best deal. For more information on the forecast for your particular situation please don’t hesitate to contact me directly on jmw@currencies.co.uk

UK Inflation the lowest since October 2009. Sterling weakens on the back of the release. (Ben Amrany)

Ben Amrany

Ben Amrany

Sterling has been performing extremely strongly against both the Euro and US Dollar over the last couple of trading sessions with rates spiking to a 13 month high against the single currency and amazingly over a four and a half year high against the greenback.

On a trade weighted basis (16 most traded global currencies) sterling is the strongest it has been for five years now.

But why the turn around in fortunes?

Over the last few months economic data from the UK has been looking a lot healthier and recently under the Bank of England Governor’s forward guidance  plan the financial markets have advanced the date at which they think the Bank of England will announce an interest rate rise to February 2015, well before they expect a move from the Fed, the ECB or the BoJ.

Events in the last couple of days goes to show how quickly you have to act should the pound spike. Once the pound hit the highs mentioned it quickly weakened over the next 24 hours by over 1 cent against the Euro and 2 cents against the Dollar. The weakness has occurred as the UK just posted its lowest inflation figures since October 2009. This pushes back interest rate hike expectations and I have been stating for a long time that the lower inflation falls it gives the Bank of England more scope to keep rates lower for a longer period of time.

The further inflation falls theoretically the weaker the pound could get so this is one to keep a close eye on over the next few months. 

Tomorrow will be interesting for all with a requirement as the latest unemployment data and Bank of England minutes will be closely watched as the markets will try and digest any economic trends for the UK and any divisions between the MPC on the banks forward guidance policy.

Now that we have seen Inflation falling further, sterling may just come back tomorrow should we see a continual trend of falling unemployment and just one member of the MPC voting for a rate hike now. But should the data come out the other way then sterling exchange rates may just fall back towards 1.20 against the Euro and 1.65 against the Dollar.

If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk

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