Tag Archives: sterling forecast

Sterling’s Struggles Continue (Matthew Vassallo)

Sterling’s struggles have continued this week and despite a slight recovery against the USD, the general trend has certainly been negative. The downward spiral coincided with the start of 2016 and the Pound has failed to replicate the good feeling of last year and this has been reflected in the current exchange rates.

GBP/EUR rates have dropped below 1.30 today and as I’ve discussed in previous posts, this is a key resistance level for the Pound. If we see another aggressive move for the EUR the Pound may struggle to break back through it and whilst my underlying feeling has been that the Pound would start to find some support, the current trend is concerning for those clients holding GBP.

It is slightly better news for those clients looking to purchase USD, with the Pound fighting back over the past 48 hours. The pair is floating around 1.45 having spent most of last month closer to 1.40. Poor employment figures in the US have helped to stem the flow but based on the current economic climate in the UK, I am not anticipating this positive spike to continue. As we move through the year we may see Sterling improve, as the US elections are likely to cause some uncertainty and the hope for those clients holding GBP is that 1.40 will provide some protection if the rates do start to drop again.

Much of the focus this week has been on the UK and with key data releases yesterday, investors were dubbing it ‘Super Thursday’. Unfortunately it was anything but and the Pound suffered as a result. The Bank of England’s (BoE) UK Inflation Report made for grim reading and with BoE governor Mark Carney cutting growth forecasts in the UK, I’m not expecting a major improvement for Sterling in the short-term.

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 725 353 and ask one of the reception team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

EU Referendum heats up!

The reports David Cameron is close to sealing a deal on being able to better control benefits for immigrating Europeans has helped sterling as this is expected to be a major issue in the vote. Sterling has found some support and this could be a very good opportunity to be buying a foreign currency with sterling as next week is the Bank of England Quarterly Inflation report which if anytihng like the last few comments form the Bank should be bad news for sterling! If you are buying or selling the pound 2016 has been very choppy and I expect will continue to be so, further losses for the pound on the whole very likely but there will be spikes to take advantage of. Achieving the best rate in such a market means being able to react quickly to the changing news and events. If you are considering an exchange and wish to be kept up to date with the important events and understand the latest forecasts please email me Jonathan on jmw@currencies.co.uk and I can try to help you.

The pound has really struggled this year because of the uncertainty relating to the UK Referendum on EU Membership. The UK is proposing to hold a Referendum on remaining part of the European Union which it has been a member of since 1973. The likelihood is that the uncertainty around this event will cause the pound to weaken although breaking news today that David Cameron is apparently closing in on a deal has helped the pound to find some favour. I expect this to be a feature of sterling movements in the next few months and right up until the actual Referendum is settled. Sterling will react to the headlines moving higher and lower according to the prevailing sentiment.

Next week is the latest UK data and the Bank of England report, personally I cannot see good news but will better news from the EU help sterling instead? Keep up to date with our blog by bookmarking us or contact me Jonathan directly for updates and assistance planning your exchanges. Please email jmw@currencies.co.uk for more information.

Sterling Makes Gains Despite Negative Outlook (Matthew Vassallo)

The Pound has found some support during Tuesdays trading, despite a negative outlook for the UK economy over recent weeks. GBP has made gains against both the EUR & USD and whilst I do not anticipate this spike to continue at the same pace over the coming weeks, it is reassuring for those clients holding GBP, especially when we consider the negative spiral we’ve seen since the turn of the year.

It has been debated for weeks as to why the Pound is suddenly stuttering, considering many believed it would continue on its upward curve during the first quarter of 2016. Personally I felt we saw an overvaluation of Sterling against both the EUR & USD for some time and a realignment was always likely. This drop has come quicker and been more aggressive than I expected but has come in line with a run of inconsistent economic releases in the UK. Bank of England (BoE) governor Mark Carney seems to change his opinion like the wind but has basically eliminated the chance of UK interest rate hike this year. He even alluded to the fact they would cut rates again if necessary during his public address yesterday, which makes the Sterling strength we saw even more surprising. On the flip side of this the Pound has found support despite Carney’s comments and this means we may be seeing the Pound bottom out.

I do not feel a move back above 1.35 against the EUR is likely and I also feel the greenback will find protection around 1.45.

Not a huge amount of economic data out for the UK this week, so investor focus is likely to switch to Thursday’s UK Gross Domestic (GDP) figures. This is always considered a key economic barometer as to the relative health of an economy and with an improvement to 0.5% growth expected, we could see Sterling hold its position over the coming days.

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 directly on mtv@currencies.co.uk

Will Sterling Continue its Fightback?

Sterling has recovered some ground during Friday’s trading, with gains against both the EUR & USD.

GBP/EUR rates have spiked by almost 2 cents with the pair hitting 1.3287 at the high. Sterling found some support earlier this week following better than expected employment data. The official UK unemployment rate hit a 10 year low and this allowed the Pound to curb any further losses in the short-term. This trend has continued today despite poor UK Retail Sales figures and it looks as though GBP will now receive support above 1.30.

The EUR had made great strides since the turn of the year, with huge gains against the Pound. For an extended period GBP/EUR levels were trading above 1.40 and despite my feeling that the Pound was overvalued at this level, we certainly didn’t expect rates to drop as quickly, or aggressively as they have.

I do feel that EUR sellers should take advantage of these recent gains, as the Eurozone remains fragile and in my opinion unreliable. Whilst we have seen a sustained improvement for the single currency there are a number of variables and outside influences to consider and any further problems in one of the main Eurozone economies, will have a negative domino effect on others.

GBP/USD rates have also recovered back above 1.43 and again it now looks as though the Pound will have enough support to hold it above 1.40 in the short-term. The USD has received huge support of late and much of this is due to the problems facing the Chinese economy and the knock-on effect this has had on the global economy. Investors risk appetite has been diluted due to the global economic downturn, which means funds are pulled from riskier assets and pumped back into the ‘safe haven’ USD, causing it to gain value.

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 the reception team for Matt. Alternatively, I can  emailed directly on mtv@currencies.co.uk

Have sterling exchange rates bottomed out for now?

The expectations for sterling remain rather unsettled but it does appear that now much of the bad news is priced into current exchange rates. Expectations for the UK economy to have a tough year and for there to be increased anxiety surrounding the UK’s relationship with the European Union will do little to boost confidence in the pound. The uncertainty of the EU Referendum is likely to linger until we have some news on just what ‘concessions’ exactly the Prime Minister has negotiated. In my opinion it seems highly unlikely David Cameron will achieve some of the important terms he seeks as they conflict directly with the core principals of the European Union. One example is Immigration. The UK is seeking tougher new rules on who is allowed into the country and the terms of stay including the duration until they can claim benefits. I think that in the coming weeks once news breaks that the UK is unlikely to have negotiated its position to a more ‘favourable’ EU, the pound will slip further as the bare faced reality of a UK exit from the European Union becomes a real possibility.

to understand where we are going it is useful to look back and one of the main reasons sterling has been so strong in the last year is the prospect of the UK raising their interest rate. Such uncertainty over the EU question leaves any potential interest rate hike much further away in the future and investors are seeking much safer predictable shores such as the US and Euro. Sterling has now fallen to multi year lows against the Euro and Dollar. In my research for this blog and my work generally I have found the Bank of England data team most useful and having contacted some of the team there personally have found them very helpful too. If you have any questions over the latest trends on sterling exchange rates please contact me on jmw@currencies.co.uk and hopefully I can help you make sense of the latest trends!

The rest of the week is not holding too much fruit for those still hopeful of improvements to sell the pound. Tomorrow we have UK Unemployment data and Thursday the latest European Central Bank meeting. These releases could provide some brief respite for your transfer or present a final consolidation of the recent trends. On balance it does appear that the pound will suffer further in the future. Please contact me Jonathan on jmw@currencies.co.uk to learn more.

Will the pound go higher?

Well dear readers, the pound has fallen considerably in 2016. According to Bank of England data the Pound Sterling TWI (Trade Weighted Index) has fallen by over 10% this year. Looking at all the events up ahead this trend could easily continue as other currencies find favour and investors dump the pound.

2016 was always going to be a tough year with the UK Referendum and Chinese market worries predicted to impact exchange rates. With the UK economy we have a number of worries to look out for including the lower GDP than the rest of the world and the strong likelihood of very low Inflation. This all points to a much weaker pound in 2016 than the last year!

Next week we have the latest UK Inflation and Unemployment data but there are other important releases from around the world which will impact GBP exchange rates. Notably Eurozone Inflation data on Tuesday and then the European Central Bank (ECB) Interest Rate decision and Press Conference on Thursday. If buying or selling Euros then this release will be very important to you. The Euro has improved buy over 12 cent against sterling in the last 6 weeks, this trend is causing headaches for Euro buyers and is present unbelievable opportunities for clients selling Euros for pounds. If you are selling Euros following a property sale in the Eurozone and wish for some assistance with the planning and execution of any deals please email me jmw@currencies.co.uk for more information which I am sure you will find very useful.

GBPEUR Range for January 1.25-1.33      GBPUSD Range for January 1.36-1.45     GBPAUD Range for January 2.01-2.10    GBPNZD Range for January 2.15-2.25

The USD is now at a 6 year high against the pound which is a level which could yet improve. A 12 year low on Oil prices is worrying global investors who are buying the USD. This trade by investors is being made yet more attractive by the prospect of the US raising Interest Rates again in the future.

All of these events are construing to cause the pound to lose lots of value. If you are buying or selling the pound the market is still adjusting to the worries surrounding the UK Referendum and trying to make sense of events in China. These events are not going to just disappear overnight so making some plans and understanding your options is more important than ever. For a quick evaluation of your situation and analysis of some options that might suit you best please email me Jonathan on jmw@currencies.co.uk

I have worked as a specialist currency broker for 8 years assisting private clients and businesses with their international currency exchanges. I am very sure I can offer you some useful information which will help you in any decision making plus offer a rate which will save you money over other options. Even if you have a system in place double checking your rate and getting a second opinion could be worthwhile.

I look forward to hearing from you!

Why is the Pound Losing Value? (Matthew Vassallo)

With Sterling losing value against most of the major currencies, many of our clients are questioning the reasons for this and whether this trend is likely to continue.

Personally I did not anticipate such an aggressive drop against the EUR, or in particular the USD. GBP/EUR rates have dipped to 1.3267 at today’s low, before making a slight recovery back above 1.33 by close of European trading. This is approximately 10 cents lower than the highs of last summer and proves that when trends do change, the markets can move quickly and without warning.

The reason we’ve seen such a turnaround is not down to one factor but numerous variables, which have caused the trend and more importantly market perception to change. My underlying belief is that the Pound was overvalued above 1.40 and this was only sustainable due to the complete lack of confidence in the Eurozone’s recovery. This caused the EUR value to drop, with investors moving funds away from the single currency. With many of the major triggers that caused this now removed, or in Greece’s case at least swept under the carpet, the EUR has been able to sustain its recent improvement. I do think it will now find protection under 1.40 and whilst I don’t think it will break through 1.30 under current market conditions, the fact it’s even being mentioned shows how far the single currency has come in a relatively short space of time. Clients holding EUR should not be gambling on a currency and an economy which has been so unstable for so long and take advantage of the current spike.

GBP/USD rates have also dropped close to a 7 year low and this has provided some excellent selling opportunities for those clients selling the Greenback. The catalyst for this move was the FED hiking interest rates in December and a poor run of UK data. However, this in my opinion would not have caused such aggressive losses and it is more likely that the problems in China have caused a knock on effect. Global unrest causes investors to become less risk adverse and they will have moved funds away from riskier assets such as the AUD , NZD or ZAR and into the ‘safe haven’ USD, which holds its value during a global downturn. This in turn has caused the USD to gain further value and push Sterling’s levels down.

If you have an upcoming currency transfer 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 us on 0044 1494 725 353 and ask for Matt. Alternatively, you can email me directly on mtv@currencies.co.uk

Why is the Pound Losing Value?

The Pound has come under increasing pressure over the past few weeks and despite a slight realignment today, the general trend for the start of 2016 is certainly a negative one. The Pound has so far struggled to replicate the positive sentiment it had for much of last year and this is down to a number of factors.

GBP/EUR rates have dropped by approximately 9 cents from the highs of last summer and even over the past month, we have seen a drop from 1.40. Personally I feel we are now seeing a much fairer value on the pair, which was in my opinion, overvalued above 1.40.

One of the main catalysts for the improvement was the removal of much of the uncertainty that had handicapped any sustainable spike for the single currency. This came in the form of Greece and Cyprus amongst others and despite on-going concerns over current Eurozone inflation levels, the European Central Bank (ECB) have decided it is not necessary to increase their current Quantitative Easing (QE) programme to counter this. This led to improved investor confidence and I now feel the EUR will continue to find support around the current levels.

GBP/USD rates have headed South at an alarming rate and provided something of a conundrum for those clients holding GBP. The catalyst for this move was the US Fed’s decision to raise their base interest rate in December, which despite being widely anticipated, gave the USD an immediate boost. It was taken as a sign of economic strength by the markets and following further positive data from the US (including today’s Non-Farm Payrolls figure) and a downturn in UK data, it is easier to see why the Pound has lost so much value, relatively quickly.

Under current market conditions I do not expect it to rebound to the high’s we saw in 2015, against either the EUR, USD or AUD.

If you would like to compare our award winning exchange rates with your current provider, or require any market updates or analysis ahead of a future transfer, then please feel free to call us on 0044 1494 787 478. Alternatively, you can email me directly on mtv@currencies.co.uk

Sterling Overview (Matthew Vassallo)

As we finish the first official trading day of 2016, I thought it would be poignant to consider Sterling’s positon in the market and how it may fair again the major currencies during 2016.

On a whole the Pound performed above expectation for much of 2015, with highs against the EUR, USD & AUD providing some excellent buying opportunities. Whilst the UK recovery has remained on track, it has not proved as infallible as many thought. For much of last year Sterling defied any hiccups to rise to a near 10 year high against the EUR & AUD, and a 6 year high against the USD. However, as we moved into the last quarter we did see the Pound come under pressure against all of these currencies, in particular the EUR & USD.

GBP/EUR rates are now trading around 1.35, whilst Cable has nosedived under 1.50. The losses against the USD were somewhat expected due to the US FED’s decision to raise interest rates but with the Eurozone still struggling to gain any sustainable investor confidence, I felt we may see the Pound fair slightly better.

The point is that regardless of how an economy is performing, there will always be outside factors that are going to affect exchange rates. This makes it very difficult to predict how, or when a market trend will evolve. Of course we can paint a picture and quite often this provides an accurate guide but if rates do hit these highs, as we saw last year, then in my opinion they should be taken advantage of.

Looking ahead and whilst I expect the UK recovery to remain firmly on track during 2016, the Bank of England (BoE) have already confirmed they do not expect interest rates to rise this year. This is likely to handicap any major advances for Sterling and therefore we may find the Pound struggles to reach the highs we saw last summer.

There will still be opportunities for those clients looking to purchase and it is important to stay in close contact with your currency broker ahead of any major currency transfer, to ensure you are maximizing the market value available.

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 us directly on mtv@currencies.co.uk

Happy New Year to all our readers!

Sterling Under Pressure Ahead of US FED Interest Rate Decision (Matthew Vassallo)

It’s been a busy week for Sterling exchange rates, with a host of key economic data releases dominating the headlines. The general trend has been a negative one, with losses against both the EUR & USD. Tonight’s US FED interest decision is the most poignant of this week’s data and with a rate hike likely, we could see Cable rates driven down further. The USD has already touched below 1.50 today and despite the likely 0.25% rate rise being factored into the current market conditions, I still feel it will boost the USD’s value as and when it does occur.

GBP/EUR rates also dipped during morning trading, with the pair moving back towards 1.37. The EUR has improved against Sterling of late, with the single currency gaining value following the European Central Bank’s (ECB) decision not to increase their current Quantitative Easing (QE) programme. This move was widely anticipated by the markets and was seen as sign of strength for the Eurozone when it did not occur. As a result the EUR has gained almost 5 cents from the recent low and I do feel the EUR now has sufficient support to find protection under 1.40 against GBP.

The Pound has started to recover some ground against the EUR following the official UK unemployment figure, which came out better than expected at 5.2%. This should help to curb any heavy losses for GBP today and with UK Retail Sales figures released tomorrow, we may find it put pressure back on 1.38 if these are positive.

All eyes are now fixed on tonight’s interest rate decision by the US FED and the subsequent monetary policy statement by head of the FED Janet Yellen. I expect increased market volatility across the board following this release and the subsequent monetary policy statement.

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 directly on mtv@currencies.co.uk