Tag Archives: sterling forecast

UK GDP Figures Halt the Pound’s Rise (Matthew Vassallo)

The Pound’s recent rise came to an abrupt end this morning, following the release of the latest UK Gross Domestic Product (GDP) figures. The official reading came out at 2%, which was under market expectation and the Pound immediately lost value as a result.

GBP/EUR dropped back to 1.3131 at today’s low and despite the recent improvement, I still feel the Pound remains in a fragile state. The markets seem to be moving off rumour as much as fact and with the upcoming referendum likely to cause further uncertainty, it is very difficult to predict exactly how things will unfold. Sterling did receive a boost earlier this week following the release of the latest EU poll, which indicated the Remain camp had a healthier lead than many thought.

I did anticipate a move up to the current levels ahead of next month’s referendum and despite the rise I still feel the polls we are seeing are likely to be fabricated. There will certainly be further developments on both sides before the final votes are cast on June 23rd and for this reason I wouldn’t be gambling on another major spike for GBP. It may be that following this morning’s poor data that Sterling has hit its glass ceiling.

We also need to consider the Bank of England’s (BoE) position, which has been to continually talk down facets of our economy, which has diluted investor confidence. They are keen to control Sterling’s value in the hope this will boost exports and ultimately narrow our ever growing trade deficit.

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 on 0044 1494 787 478 and ask one of my team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

GBP exchange rates open the week flat, will Sterling hold on to it’s recent gains? (Joseph Wright)

With the recent gains made by Sterling exchange rates many may have wondered over the weekend whether they’d missed the boat. Fortunately for those that didn’t take advantage last week, they still have the opportunity of selling their Pounds at surprisingly good levels considering next month the UK public will be voting on it’s political future.

Having hit a 3 month high last week, GBP/EUR is still trading above 1.2900 at the central level and personally I think there could be some short term support at that level as the pair bounced back up above 1.2900 after briefly dropping as low as 1.2893 earlier today. Expect the fears over Greece’s bad debt to help Sterling hold it’s ground although should we hear of a turn in the polls/bookies regarding the EU Referendum next month, I’ll expect GBP to spike downwards against all major currencies.

Earlier in the month GBP/USD, commonly know as cable, hit a 4 month high and since then once again Sterling is more or less holding on to those gains. I think anyone with an upcoming currency requirement involving selling GBP to buy USD should be well aware of how an Interest Rate hike from the Fed will effect the pair, and how likely that hike is likely to occur and when.

Sterling is likely to see weakness in the event of an Interest Rate hike in the US when compared with Sterling, and analysts have currently got an increase in the rate next month at 30% so we shouldn’t rule out those chances. Odd’s are at 60% for September so for GBP sellers, it may be in your best interest to begin organizing your US Dollar purchase sooner as opposed to later.

Major events which could affect GBP exchange rates and potentially erode Sterling’s recent gains consist of Tuesday’s Public Sector Net Borrowing for April, and UK GDP figures on Thursday. Both figures will be held under high scrutiny within the market place and expect big movements should either figure come out far from analysts expectations.

If you would like to discuss an upcoming currency exchange you have to make, and ensure you’re getting the best rates possible with high levels of client security, feel free to get in touch with me (Joseph Wright) on jxw@currencies.co.uk 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 Joseph on the Sterling desk. 

Sterling Rallies Following Latest Brexit Polls (Matthew Vassallo)

Those clients holding Sterling received a welcome boost today, following aggressive spikes for the Pound against a basket of major currencies. Sterling was boosted by the latest Brexit poll, which indicated that the Remain vote was up to 55%. The EU referendum has dominated headlines for many weeks and will confirm to do so up until the vote on June 23rd.

Whilst I was not anticipating any sustained Sterling strength under current market conditions, the fact that we have now had two separate polls indicate a relatively healthy lead for the Remain camp, the markets are viewing this as a major positive for the UK economy. I am still wary about assuming this strength will continue, as I have no doubt we will hear conflicting reports over the coming weeks, which are likely to bring back that market uncertainty. In fact if you think back only a couple of weeks we saw a similar, if slightly less aggressive move for the Pound. Those gains were quickly eradicated on the back of some negative reports and I would be very tempted to secure my position, rather than assume that this positive spike is here to stay.

I am still not convinced that the UK economy is strong enough to act as a catalyst for GBP to continue this run and with the Bank of England (BoE) remaining steadfast in their commitment to control Sterling’s value, for fear of alienating the Eurozone (our largest trade partner). They will be keeping a very close eye on today’s developments and should they need to I have little doubt that they will step in total down a facet of our recovery, with the hope this will ease market confidence in the Pound.

If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movement, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 725 353 and ask one of the team for Matt. Alternatively, I can be directly on mtv@currencies.co.uk

Today is the day!

The outlook for the pound is not very good and today will be further news about just what to expect for the UK and the pound in the coming months and weeks. Uncertainty over the Referendum and worries surrounding recent economic data will become more apparent in the coming weeks and any acknowledgement of the trends by the Bank of England should see sterling slide. The Quarterly Inflation Report is likely to carry the most weight but there is an outside chance of a call for an interest rate cut which would likely cause the pound to lose value.

If you need to buy or sell sterling in the next year the Referendum will have an impact on the pound well beyond the 23rd June. Expectations are for a Remain vote but only just. It is far too close to call and the current levels should not be easily dismissed as we might have a whole different ballgame in 7 weeks time. The best way to predict the future is to create it and we do offer a range of options to help you capitalise on any big swings that we might see.

For more information on getting the best exchange rates and keeping up to date with the latest trends please email me Jonathan on jmw@currencies.co.uk

Donors are favouring a ‘Brexit’, but will the UK public and how could this affect GBP? (Joseph Wright)

Those with an interest in the value of the Pound will be aware of the potential effects a ‘Brexit’ could have on Sterling’s value, so for some the title of this blog might be quite alarming.

Earlier today the Electoral Commission revealed that collectively, the ‘Leave’ campaigns have been given £700,000 more than the ‘Remain’ camp from February to April.

Not only have the groups campaigning to leave the Eurozone been given £8.2m in donations from the 1st of February to 21st of April, but the ‘Brexit’ polls have showed that so far this month there is a gain in support for leaving the Eurozone.

With the actual referendum now less than 6 weeks away, this information is hugely important when we consider that analysts with investment bank HSBC earlier this year stated there is potential for price parity with regards to the GBPEUR exchange rate, which would be a massive drop from the current levels which although down today, they are still holding strong at 1.2651 at inter-bank level.

Whilst the uncertainty of the UK’s political future is currently the major factor driving GBP exchange rates, tomorrow could be a different story as it will be the busiest day for the UK in terms of financial news releases with some dubbing it ‘Super Thursday’.

The Bank of England will announce it’s most recent Interest Rate Decision tomorrow along with the subsequent Minutes and Monetary Policy Stance. Although nothing is expected to change, should any of the 9 voting members have changed their minds from the previous vote, we can expect to see volatility within exchange rates. Moreover, should a particularly bullish or bearish tone by adopted during the speech, that too could create volatile trading conditions or a major spike in either direction we we’re prepared for a busy day tomorrow.

This data is due out tomorrow at 12, so for those that have a currency requirement involving GBP, that are happy with the current rate of exchange, my suggestion would be to get in contact with me (Joseph Wright) on jxw@currencies.co.uk bright and early so we can help you secure a rate of exchange before the news sensitive data comes out. We’re one of the longest standing regulated currency brokers in the UK, and we offer award winning exchange rates so feel free to email me or call on 01494 787 478 if you wish to discuss your requirements.

Remain or Leave Vote Narrowing According to Recent Poll (Matthew Vassallo)

It’s been a volatile time of late for GBP exchange rates and I expect this trend to continue in the build up to June’s EU referendum. Whilst our regular readers will have seen a number of reports discussing the pros and cons of a possible Brexit, my opinion is that we have not yet seen either side provide a clear and calculated argument as to the real benefits of each. There has been a number of scare tactics by both the Remain & Leave camps and of course the on-going propaganda via various door to door leaflets, which I’m sure many of our readers will have received.

This has all culminated in a lot of confusion and the markets are reacting accordingly, with the uncertainty its creating causing excessive movement on Sterling exchange rates. Depending on which report you read, you will have heard various key figureheads putting their opinion forward and with both UK Prime Minister David Cameron & US President Barack Obama very much in the Remain camp and previous London mayor Boris Johnson & US Presidential hopeful Donald Trump in the Leave camp, we seem to be at something of a loggerhead.

I am still of the opinion that the Pound will struggle to gain any sustainable market support over the coming weeks and with the most recent polls suggesting that the gap is decreasing between those that wish to stay and those that wish to leave, it is likely this uncertainty will only intensify. The markets are having to factor in all eventualities and if I had a Sterling position I would certainly be looking to give myself some sort of protection ahead of the vote, as we just cannot say with any certainty which way it is going to go.

There will be opportunities for clients both buying and selling but they are likely to be short, sharp spikes and need to be taken advantage of when the opportunity presents itself. We have some key data for the UK over the coming days, with the latest Manufacturing & Industrial Production figures released tomorrow and then the latest NIESR Gross Domestic Product (GDP) estimate. This is always a key barometer for investor’s, as GDP figures give us a key insight into the relative health of a countries economy. It was the better than expected GDP figures which helped to boost GBP rates a couple of weeks ago, so expect investor’s to be keeping a close eye on this release.

However, it is likely to be ‘Super Thursday’, which will dominate most of the headlines, with the latest Bank of England (BoE) interest rate decision, subsequent monetary policy statement and BoE minutes being released. Whilst interest rates will likely remain on hold, the subsequent minutes and monetary policy stance will indicate the current stance and thinking of our central bank. If any of the BoE members have voted for a rate cut, then expect the Pound to come under further pressure during Thursday’s trading.

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 787 473 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Sterling Rallies Following Positive GDP Figures (Matthew Vassallo)

Sterling rallied again during Wednesday mornings trading, following better than expected UK Gross Domestic Product (GDP) figures. Figures came in above market expectation at 2.1% growth and this helped to boost Sterling’s value further, following a positive run during the first half of the trading week.

GBP/EUR rates jumped following US President Barack Obama’s comments on the weekend, regarding how Britain would be worse off outside of the EU, comments which boosted market confidence and helped to push the Pound up through 1.29 at this week’s high. This move was intensified following this morning GDP figures and a one point it seemed as though GBP/EUR rates may push 1.30, before the EUR found support snapping back towards 1.2850 by the close of European trading.

It was interesting to note that Sterling’s support waned following a report from White House hopeful Ted Cruz who said that the UK should be ‘at the front of the que’ for a trade deal with the US should we choose to leave the EU after June’s referendum. Whilst I will take these comments with a pinch of salt it comes as a stark reminder that despite this week’s reports indicating that we are more likely to stay than leave, no one actually knows what the outcome will be. The markets are likely to remain volatile for the foreseeable future and I would not be gambling on huge improvements for the Pound beyond the current levels.

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

Sterling exchange rates continue their surprising climb, offering a great short term opportunity? (Joseph Wright)

The Pound made gains across the board again today, following on from what was a surprising rebound last week which has provided those looking to convert Sterling into another currency, with a great short term opportunity.

As we all know, currency exchange rates don’t move in straight lines and I personally view this recent market movement as a short term opportunity to take advantage of, as opposed to the beginning of long term upward trend for Sterling exchange rates.

I’m of this opinion for a number of reasons. Firstly, I’m not sold on the reasoning behind this recent boost to Sterling’s value. It’s being predominantly put down to the most recent ‘Brexit’ polls suggesting that the ‘Remain’ camp is now in the lead, although I think it takes a bit more than this to shift market’s so substantially and I think speculators, looking to make a quick buck have been bargain hunting in large numbers which has driven up Sterling’s value. Once the profit taking begins I think we can expect sharp falls for the Pound once again, similar to those we saw just a few weeks ago at the beginning of the month.

Also, I think that US President Barack Obama’s recent statements underlining the UK Government’s desire for the UK to stay within the Eurozone has been met well by the marketplace, boosting sentiment for the short term. Once again I’m not expecting this sentiment to last, as it will only take one celebrity or person of significance to lend their support to the ‘Leave’ campaign and leave us with similar market conditions to those just after Boris Johnson opted to support the ‘Leave’ campaign, when Sterling rates of exchange dropped sharply.

There are many arguments in favor of remaining within the Eurozone, and the current polls are suggesting that the UK will. But irrespective of these factors it’s highly likely that we’ll continue to experience headwinds in the lead up to the 23rd of June when we have our vote, therefore investors will need to take advantage of the opportunities that arise in that time and as I’ve previously stated, I think that the current buying opportunities on the likes of GBPEUR, GBPUSD and GBPAUD will be short term.

If you are planning to use GBP to buy 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 contact me directly on 01494 787 478 if you would like to discuss anything in further detail, just ask for Joseph. 

 

GBP exchange rates are in recovery mode, but for how long?

Those looking to sell Sterling in order to purchase other currencies have been dealt a good hand this week as Sterling continues to recover against a basket of other major currencies.

I think the rebound has come as a shock to many as current GBPEUR levels are the strongest they’ve been all month, whereas just a week or so ago the pair were trading at an almost two year low of 1.2320. Cable (GBPUSD) trading levels are also at their highest point of the month, with the pair trading at 1.4349 on the central level.

Personally I think these market movements have provided Sterling sellers with a great opportunity to take advantage of while it lasts, as I think this is just a slight uptight within a longer term downward trend for Sterling exchange rates, and I expect the downward pressure to return to the Pound as Britain’s political uncertainty continues to be a headline topic.

The boost to Sterling’s value has been due to increased risk sentiment within global markets which has also been reflected in stock markets, also the most recent polls coming out of the UK suggest that the ‘remain’ camp is in the lead and this news has been received well by investors. The UK Government has been working hard to sway voters into remaining in the EU, and much of the ‘remain’ camps recent support could be due to The Treasury’s claims that the UK economy could shrink by 6% by 2030 should we leave, costing the average household £4,300 per year.

I think it’s fair to say that we can expect a reverse of the Pound’s fortunes if the ‘Brexit’ polls suddenly show a change in the UK populations voting plans, and I’m expecting headwinds in the lead up to the referendum on the 23rd of June should the likes of Boris Johnson offer their support to the ‘leave’ camp once again, and I don’t expect Sterling exchange rates to be this favorable for much longer.

Important data to look out for today comes in the form of UK Retail Sales Figures as well as Public Sector Net Borrowing figures both for March and coming out at 9.30am, and then later today the ECB will announce it’s most recent Interest Rate Decision followed by comments from ECB President Mario Draghi. Each event has the potential to move currency markets and feel free to get in contact if you would like to discuss these data releases further.

If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me (Joseph Wright) 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. Alternatively you can call me directly on 01494 725353.

What can we expect this week for the pound? (Jonathan Watson)

Jonathan speaking on BBC NEWS 24 in February

Jonathan speaking on BBC NEWS 24 in February

Great British Pound (GBP)

Important news this week for sterling is  Unemployment data on Wednesday which is expected to remain stable at 5.1%, this has been one of the key strengths of the UK economy, if the predicted rise in average earnings from 2.1 – 2.3% rings true sterling could be in for a good day on Wednesday! Thursday is Retail Sales figures which are always a volatile release and can impact markets, if you don’t see the sterling move you are looking for on Wednesday then this could be the one to watch.

In summary sterling should remain in a better position this week, the pound has slipped in recent weeks but found some form last week with better than expected Inflation data and better news concerning the government. David Cameron’s dreadful previous week was recovered from the worst points and a particular damning report by the Treasury on the Brexit has reconfirmed the governments position potentially further aiding the Remain camp. I expect this report and better UK data to help give the pound a lift by the end of the week but a lift that will be rather fragile when we (and financial markets) take into consideration the Referendum only 9 weeks away!

EURO (EUR)

A fairly tame start to the week with some Construction and Current Account figures gives way to a busy end of the week as Friday sees Manufacturing and Services data for the Eurozone. Thursday is the key date for the Euro however as we have the European Central Bank decision and Monetary Policy Statement. The last meeting saw almost 4 cents movement in the afternoon and whilst I don’t expect quite the volatility this is usually a volatile time as markets digest Mario Draghi’s assessment of the Eurozone. Following the ECB bazooka of low interest rates and QE last month Inflation has risen which should give Mario Draghi cause for cheer and possibly help the Euro rise.

In Summary the Euro looks set to remain strong but might lose some ground to a stronger pound on Wednesday. Thursday is the key date so if you need to buy Euros moving before Thursday might be sensible, GBPEUR buyers have received almost 3 cents improvements from the lows of April which given the uncertainty ahead should not in my opinion be dismissed too easily.

United States Dollar (USD)

This week is a range of mid tier releases in the US focusing on Housing Starts (Tuesday), Home Sales data (Wednesday) and Jobless Claims (Thursday). The dollar had weakened on the news the Fed were resigned to just the two rate hikes this year but has now found traction again. Two hikes is better than none and with the UK stagnating and the Eurozone still focused on ‘easing’ measures the dollar is still top of the class.

In summary there remains a good chance that the dollar will strengthen further against the pound longer term but this is sterling’s week. If you need to buy dollars with the pound taking advantage of any spike this week is I believe the best way forward.

Do you have a currency transaction to consider involving the pound? If so this week could see a return to favour which given the Referendum ahead is I believe something well worth taking advantage of! For more information on events to be aware of surrounding your currency transaction please contact me Jonathan Watson on jmw@currencies.co.uk