Tag Archives: sterling forecast

Sterling gains on positive UK trade data, will the bullish trend continue? (Joseph Wright)

The latest set of UK economic data surprised investors today and as a result, the Pound has received a welcome boost across the board.

After a very good November the Pound fell off it’s highs against both the Euro and the US Dollar earlier this week, but the currency is regaining some of it’s lost value and approaching those highs once again which the GBP/EUR pair approaching 1.20 once again.

The Pound has recovered particularly well versus the Euro after the European Central Bank (ECB) announced yesterday that it will be extending its bond purchasing program as a form of quantitative easing.

The Pound gained off the back of this news mostly due to Euro weakness but today those gains have been boosted further. UK Trade is looking a lot healthier after data released today showed October’s visible trade balance dropped to -£9.7bn when many had expected to see it drop from -£13.8bn down to -£11.8bn.

This reduction is of course good news for the UK, and trade balance figures are often discussed in financial media after earlier this year it was announced that the pound had the highest deficit within the developed world.

Now that GBP/USD is trading above 1.25 and GBP/EUR is closing in on 1.20 once again it appears that the Pound is looking healthy around these levels after gaining a lot of ground in a short period of time.

If you’re planning on taking advantage of the recent gains by Sterling by converting the currency into another major currency, feel free to get in contact to discuss  exchange rates and timings.

You can contact me directly 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.

Sterling exchange rates enter December in good health, but will the Pound continue to climb? (Joseph Wright)

The Pound is entering the new month in a much stronger position than it entered November, after the currency gained an impressive 4.5% against the Euro through last month as well as performing well against a number of other major currencies.

Yesterday afternoon the Pound spiked upward against the Euro, as did the US Dollar, after both UK GILT (bonds issued by the UK government) and US government issued bond yields both increased in anticipating of further quantitative easing from the European Central Bank, (ECB) and also expectations of an aggressive fiscal plan by the US President elect Donald Trump.

Whilst complicated the result was Sterling strength across the board.

People planning on converting Pounds into another major currency such as the US Dollar, the Euro or the Australian Dollar for example have been presented with a much more attractive opportunity than this time last month, due to the Pounds unexpected gains off the back of the unexpected election of Trump.

Personally, I think the Pound may gain further on the Euro as we enter December and the Italian Referendum this weekend may be the catalyst. If the Italian Prime Minister (Matteo Renzi) is unsuccessful in his plan to change the Italian constitution in order to reform the banking system in Italy, I think we could see further Euro weakness as soon as next week. Feel free to get in touch if you wish to be kept updated on this topic.

Those in the process of buying property abroad or moving large amounts of money internationally have the chance to save thousands if we compare the Pounds value now compared with just a month ago, and with the help of a specialist currency exchange brokerage like ourselves we can help clients get even more for their money as our rates can improve on the banks offerings by between 1-4%.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s 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 to speak with me over the phone on 01494 787 478, just ask reception for Joe if I don’t answer myself. 

 

The ‘Trump Train’ market surge fades but Sterling manages to hold on to it’s gains, but for how long? (Joseph Wright)

The Pound has surged across the board through November for a number of reasons, with the main catalysts being the likely delay to invoking Article 50 and beginning the Brexit process, and Trumps election victory in the US boosting sentiment surrounding the UK economy.

Those planning on converting Pounds into another foreign currency have been dealt a good hand this month, as the Pound has gained clawed back quite alot of it’s losses since the Brexit vote.

This month alone the Pound has gained 5 cents vs the US Dollar and 7 cents vs the Euro. In monetary terms a £200,000 GBP to EUR currency exchange is now gaining an additional €15,000+ in the space of 30 days which just highlights the importance of timing large currency conversions.

As a specialist currency brokerage we’re here to monitor the currency markets on behalf of our clients, and in volatile trading conditions like we’ve seen this month our service can really save clients large amounts of money due to the assistance with timings and reacting to market movements.

There will be manufacturing and construction figures released later this week which could affect GBP exchange rates depending on their outcome, and if you are planning a currency exchange between the Pound and another major currency and would like to plan around these events, do get in touch regarding timings and exchange rates.

The Pound has so far held onto it’s gains made this month, but currencies do tend to fall quicker than they climb and if some ‘Hard Brexit’ related news is released there is a chance the Pound could lose some or even all of it’s recent gains.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s 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 and ask reception to speak with me (Joe) on 01494 787 478. 

Sterling exchange rates boosted after the Autumn Budget, will the Pound continue to strengthen? (Joseph Wright)

The current levels for converting Pounds into other major currencies are surprisingly attractive when we consider the outlook for the Pound just a few weeks ago.

I think that people planning on converting their Pounds into another major currency, for a property purchase for example, have been dealt a fortunate hand as the Pound hit a 2-month high yesterday on a trade weighted basis, whereas just a few weeks ago the pound was trading at over 5 year lows against the Euro and at over 30 year lows against the US Dollar.

The Pound to Euro exchange rate is now trading closer to 1.20 than 1.10 after gaining 7 cents off the back of Donald Trump’s election victory. The UK economy, and therefore the Pound, has been boosted by the ‘Trump train’ after his warm words about the relationship between the UK and US in his campaign. Barack Obama had previously said the UK would be at the back of the queue on business deals whereas Trump said the opposite, and Trump also has a number of interests in the UK.

The gains for the Pound against the Euro specifically are extensive, making a €200,000 purchase £10,650 cheaper.

The Pound was boosted further yesterday afternoon after the Autumn Budget sprung no surprises. I do think that those planning on converting Pound into another major currency should watch the rates and news as the Pound could come crashing down quicker than it’s risen as is usually the case.

If you are planning a currency conversion involving the Pound, it’s 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 and ask reception to speak with me (Joe) on 01494 787 478.

Has the pound bottomed out? I wouldn’t bet on it…

With the pound finally finding some support after a very challenging couple of weeks a very valid question at present is whether or not the pound has now bottomed out. The first reflections following the flash crash which saw GBPEUR hit 1.09 and GBPUSD 1.18 indicated we would see a move lower to perhaps parity on GBPEUR and 1.10 on GBPUSD. Will this now start to materialise or will the rate gently rise as market spotlights focus elsewhere?

Sterling has dropped almost 20% on its TWI (Trade Weighted Index) since the Referendum vote. Billions of pounds of value of the UK economy has been written down as investors fears over the UK’s future relationship with its biggest trading partner manifest on the currency markets. Yesterday’s news on Unemployment shows the economy is still creating jobs, we finally saw some rises in Inflation too this week. A welcome knock on effect from the weakness of sterling versus the deflationary situation only a few months ago.

With the political developments remaining the big driver on sterling we have to be preparing for further losses for the pound. Whilst the Brexit seems to some of us like it has been going on for ages it has only been 4 months since the vote. When we step back from this situation and perhaps reflect on the vote in further months and years to come we will view now as the very infant stages of what is going to be a very long and drawn out process. In such an environment it is difficult to be overly positive for the pound and whilst we might have some small bounces like we have seen this week to help anyone holding the pound, I would not suggest this will be indicative of a move much higher in the short term. Buying on such spikes is I believe a very worthy strategy to avoid being caught off should we see further big challenges on the markets.

Key information for anyone buying or selling the pound comes this morning with UK Retail Sales and then in the afternoon today we have the latest ECB (European Central Bank meeting) where we may learn of any fresh approach by the Eurozone to manage their economy. Any suggestions on future policy direction may cause volatility on GBPEUR rates as well as GBPUSD since swings on EURUSD impact both of these pairs.

I wouldn’t be betting that the pound has now bottomed out since there are still many huge challenges ahead for the UK both politically and economically. The weak pound itself whilst helping Inflation could become more of a problem as it exacerbates the gap between wage growth and prices. I don’t think anyone voted for Brexit to be poorer and one way or another a chronically low pound does make the UK as a net importer worse off.

Sterling is enjoying some of its best news in October with some big improvements particularly against the Euro and US Dollar but it has improved by a small percentage against the Australian dollar and New Zealand dollar too. If you are making a transfer in the future understanding all of your options and the market in advance can really help you to make informed choices about when and how to make your currency exchange. I cannot tell you exactly what to do or what will happen but with nearly ten years experience helping private and business clients plan and manage their FX exposure in a friendly yet professional manner I am sure I can add value with a better rate and some sound analysis.

For more information please contact me using the form below or email directly using jmw@currencies.co.uk. Ideally please leave a number so we can speak or please call me on 00 44 (0) 1494 787 478.

The author is Chief Analyst and Associate Director of the UK’s largest private currency brokerage with nearly ten years experience helping private clients and business plan and manage their FX exposure.

Sterling crashes as negative sentiment surrounds the Pound, will it’s value continue to decline? (Joseph Wright)

The 52 week lows for Sterling exchange rates have deepened further during today’s trading session, and in the early hours of today’s trading session the marketplace was unsure as to exactly why.

Most are pointing in the direction of trading algorithms, or automated trading to put it simply, after in the early hours of this morning the Pound was sold off extremely heavily before correcting somewhat, although not back to the levels we saw prior to this almost unprecedented move.

The drop against the dollar was the second largest in history after the drop in the immediate aftermath of the Brexit vote earlier this year back in June, so that’s 2 historic sell off’s in this year alone.

Many reading will be wondering whether the Pound will continue to fall from these levels, and it’s looking like there’s a good chance that it will because the fundamentals coming out of the UK suggest the economy is healthy, even improving economic output since the Brexit vote (which the weaker Pound has assisted in some cases). Despite the healthy economy, weak sentiment is driving the Pound down, and investors are quick to react negatively to bad news out of the UK.

The are a number of key financial institutions forecasting a weaker Pound in the upcoming months and years, with HSBC today adding to a number of major institutions with predictions of GBP/EUR parity at the end of 2017. There’s quite some distance to go yet some for those working to a budget or timescale, it may be an idea to remove the risk from the currency exchange.

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 exchange rates remain under pressure with fresh post-brexit vote lows seen yesterday and this morning (Joseph Wright)

The pressure on the Pound is continuing this morning as yesterday afternoon we really saw the sell-off pick up steam.

The catalyst for these falls has been UK Prime Minister, Theresa May’s comments over the weekend at the Conservative Party Conference. She has outlined the end of March next year as the date that the invocation of Article 50 will take place, meaning the UK will then have 2 years to remove itself from the EU.

This news has been Sterling negative as many had hoped for a long drawn out process, with lots of negotiations and hopes that the UK will retain access to the EU’s single market but that doesn’t seem to be the case. What’s more likely to occur will be a ‘hard brexit’ which is what many hard-line brexit voters had hoped for, but the financial markets hadn’t.

For those hoping that the Pound will recover, there are a few forecasts from major financial institutions that I think they should be aware of. Danske Bank has previously highlighted 1.08 as level the GBP/EUR pair could fall to within the next 6 months. Credit Suisse this past weekend outlined 1.0922-1.10 as a price target and Unicredit have just adjusted their forecast to 1.1111 (0.90 in the EUR/GBP reciprocal rate) so they clearly expect further falls for the Pound.

Do bear in mind that Sterling exchange rates in many cases are trading at over 3 year lows and in GBP/USD’s case, a 31 year low.

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.

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.