Tag Archives: sterling forecast
Sterling continues its recovery as UK growth estimates meet expectations, but will the recovery continue? (Joseph Wright)
It’s been quite a bullish week for the Pound this week as economic data releases have impressed and Sterling has gained a good few cents vs many other major currency pairs.
Towards the end of last week the UK’s Retail Sales Figures for July were better than expected, and this week the weak Pound has resulted in the UK’s Manufacturing Output reaching a 2 year high as people overseas are keen to pick up goods at low prices. These positive sets of data, coupled with today’s Gross Domestic Product estimates coming out as expected, have boosted sentiment towards the Pound as this has been reflected within currency markets as the Pound has gained almost 3 cents vs the US Dollar, and almost 2 cents vs the Euro.
Those that plan to convert their Sterling into a foreign currency at a higher rate will of course be hoping that the Pound continues to climb, and whilst I think it may do, there are a number of risks to holding off so it may be an idea to make at least part of that trade at current levels with the hope of averaging up in future. This is an approach many of our clients are currently taking and we’re here to help by keeping them updated with what’s going on in the marketplace.
Those who plan to purchase Pounds, by converting their Euros,US Dollars or Aussie Dollars for example, may wish to get in contact and check whether our rates are better than your current providers/banks as whilst current levels are particularly favourable, a return to risky attitudes from investors is likely to drive up Sterling’s value, especially if economic data out of the UK continues to surprisingly impress.
Major economic announcements that could sway markets next week are Thursday’s Manufacturing Data which is expected to show an improvement, and then next Friday will be Non-Farm Payroll and Unemployment Data out of the US. If you would like to discuss these and how they can affect markets, do get in touch and I’ll be happy to explain.
If you would like to discuss an upcoming currency requirement you’re planning, in terms of the timings and getting the best rate of exchange available, feel free to contact me on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. You can also call in directly to reception and ask for Joe on 01494 787 478.
Sterling has found some much needed support over the early part of the trading week, recovering ground against both the EUR & USD. The Pound has benefited from some improved economic data late last week, with Unemployment data and UK Retail Sales figures coming in better than expected.
This in turn boosted GBP/EUR rates, with the pair hitting 1.1784 at the high and bringing some much needed respite to those clients holding the Pound, following weeks of devaluation. These losses were born out of a complete lack of confidence in the UK economy, with investors risk appetite dissipated by the uncertainty caused by the UK’s decision to exit the EU. This is and will remain to be the underlying reason behind Sterling recent demise, with the Bank of England (BoE) cementing the downfall with their recent interest rate cut. With the possibility of further monetary easing (QE) and/or another rate cut, we may see the situation get worse before it gets better.
GBP/USD rates have seen a similar trend, with the pair falling below 1.30 at the recent low. Despite an improvement above this threshold, I do anticipate a sustained recovery anytime soon, certainly not under current market conditions. The greenback has made huge strides since the turn of the year, in line with economic improvements in the US and despite the political battle between Donald Trump & Hilary Clinton heating up ahead of Novembers election, I do not expect a recovery back towards 1.40 until we at least have some clarity on when and how the British government are likely to facilitate our Brexit.
Once some of this uncertainty has been removed then the Pound has a better chance of recovering its losses but until then I would be looking to protect any short to medium-term Sterling positions, with further market volatility expected.
If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, you can email me directly on email@example.com
This week HSBC Holdings Plc and UBS Group AG have indicated the future is not bright for the UK due to the ‘Brexit’ and they both believe GBPEUR exchange rates will reach parity at some stage next year. For people buying euros this should ring alarm bells where as euros sellers should feel their are extra pounds to be made.
Personally I disagree with the forecasts. Italy and Greece (two countries within the European union) have problems of their own. Banks within both countries are struggling with debt and they have both eluded to breaking EU laws to stay afloat. I believe rates will fluctuate in the mid teens and over time will drop to 1.10, however I just feel the UK economy is in a better position than the Eurozone and that’s why we will not see parity.
Tomorrow morning the UK release their latest Mortgage approval numbers. A drop is expected which isn’t a surprise. The public at the moment are acting cautiously due to what they read in the press about the ‘Brexit’. Expect sterling weakness tomorrow morning.
If I have not covered the currency pair you are trading feel free to email me the currency pair you are trading (GBPUSD, GBPAUD, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast for the currency pair firstname.lastname@example.org.
My area of expertise is property purchases and sales. Therefore if you need to purchase a foreign currency or you are about to complete on a sale abroad, today is the day to get in touch to discuss your options and to get an understanding of how we can save you as much money as possible.
** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **
Sterling rates have remained fairly flat during Wednesday’s trading, with the latest UK unemployment rate coming out as expected. The official reading of 4.9% was likely factored into the current GBP exchange rates by investors and as such we saw very little movement on the exchange.
Sterling did however, receive a timely boost yesterday, with UK inflation data coming in above market expectation. Despite levels remaining relatively low and a long way from the government’s target of 2%, the official readings helped GBP gain some traction against the EUR, USD & AUD. With so much uncertainty surrounding the UK economy at present any positive readings are welcomed by those clients holding GBP, who have had to watch the Pound’s value disintegrate over recent weeks.
Inflation levels have been the cause of much debate and are seen as a key market trigger for investors. Given their relevance in terms of the health of the overall economy, this positive reading may help to alleviate some of the pressure that has been building on Sterling over recent weeks. How the Bank of England (BoE) will look to counter any aggressive rises in inflation is yet to be debated but for now the small improvements seen are likely to give GBP some much needed market support.
Personally I am of the opinion that Sterling will find a foothold sooner rather than later and we should get some protection around the current levels. We still remain well above the lows of 2008 and whilst it is likely that the longer-term Brexit outlook will restrict any aggressive Sterling advances above 1.20, I don’t believe it is all doom & gloom as some analysts are predicting.
Any client holding GBP should be aware of the pitfalls they currently face and it may be wise to protect themselves against a negative market by utilising one of our forward contracts, which are in place for situations such as this. They can give you piece of mind during a turbulent period and allow clients to budget on their foreign property and asset purchases, helping to remove the fear of further market drops.
If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask for Matt. Alternatively, you can register your details through this blog or email me directly on email@example.com
Sterling’s short-term valuation is likely to be determined by tomorrow’s Bank of England (BoE) interest rate decision and subsequent monetary policy statement. The majority of investors and analysts alike feel that a rate cut and/or an increase in monetary policy is likely, in order to support our stagnating economy. This outcome is likely to be at least in part, factored into Sterling’s current valuation. Therefore whilst I do not expect a rate cut to boost the Pound’s value, we may not see an overly aggressive drop if the anticipated 0.25% cut does indeed come to fruition. I do feel however, that a rate cut alongside an increase in the BoE’s Quantitative Easing (QE) programme is likely to put additional pressure on GBP exchange rates and a drop in the Pound’s value is the likely outcome.
The UK economy has been clouded by negative market perception since our decision to leave the EU and whilst Sterling found a foothold following some political stability, the overall perception has remained cautionary. The uncertain position the UK finds itself in is unique and therefore until we have at some clear understanding of how and when we will facilitate our exit from the EU, any aggressive, sustainable Sterling gains are unlikely.
We also need to consider the possibility that governor Mark Carney & the BoE will decide to keep rates on hold and not adjust our QE programme. If this were to occur I would expect Sterling to spike but based on Carney’s recent comments and pre-warnings about how a Brexit would negatively affect the UK economy, I do expect some action to be taken.
Under current conditions those clients holding GBP should be looking at short-term opportunities, as we’ve seen this morning following worse than expected Eurozone Retail Sales figures. This has inadvertently pushed Sterling’s value up but whilst we continue to see this distorted movement, it is extremely difficult to forecast even for a few weeks.
For that reason I would be looking to protect any Sterling positions ahead of tomorrow’s BoE interest rate decision at Midday and not gamble on what has become an increasingly volatile and uncertain market.
If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with you current provider, then please feel free to contact me on 0044 1494 directly on firstname.lastname@example.org
Sterling exchange rates continue to hang in the balance, ahead of this morning’s UK Gross Domestic Product (GDP) figures. With an improvement on the previous figure expected, we could see Sterling start to put pressure back on 1.20 against the EUR and 1.32 against the USD. However, there is also an argument to make that the improvement has now been factored into the current market and we are only likely to see an aggressive move if the official reading comes outside of the 0.5% growth expected.
It’s a strange time for those clients holding Sterling, with the initial fallout from the Brexit now digested by the markets. Whilst the Pound has gained some traction following some political stability in the UK and the Bank of England’s (BoE) decision not to cut interest rates this month but there is still a feeling that we see further slippage at any time. The Pound remains extremely fragile and I do not expect any sustained improvement, or increased investor confidence under current market conditions. It is far more likely that the Pound’s value will be boosted by other factors, most prominently any downturn in other economies, such as the Eurozone. If investor confidence wains over the coming months, which is highly likely due further economic problems on the horizon for Greece & Italy, the EUR will start to lose value. This in turn will benefit the Pound but I do not see any major advances against either the EUR or USD in the short-term.
It may be prudent for those clients holding GBP to protect themselves ahead of the BoE’s next interest rate decision on August 4th. With a rate cut highly likely in my opinion and a possible increase in monetary policy (QE), the recent gains seen for Sterling could be short-lived.
If you have an upcoming GBP currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com