Tag Archives: sterling forecast
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 email@example.com.
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 firstname.lastname@example.org
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 email@example.com
Mark Carney and the Bank of England have raised UK growth forecasts helping sterling to gain against a number of currencies. At the same time they have underlined interest rates will be on hold for a long period of time which limits just how much higher we can expect sterling to rise in the coming weeks and months.
If you have a sterling transfer to consider in the coming weeks and months making some plans now at these levels may be a sensible move.
In other news the new Federal Reserve Chairmen Janet Yellen underlined Quantitative Easing in the US is likely to continue until there are significant improvements in the jobs market. And overnight Chinese economic data was much stronger than expected presenting what I believe is a very good opportunity for anyone selling Australian dollars or South African Rand to buy GBP.
I am available to assist in the planning and execution of any international money transfers you need to make (including bringing funds back to the UK or Europe). Unfortunately no one can tell you exactly what will happen on exchange rates but having won awards for our service and rates, we are extremely well placed to offer expertise in managing your currency exposure.
For a breakdown of strategies and options on your particular exchange please call me Jonathan in UK office hours on 01494 787 478 or if you prefer email a quick outline of your position to firstname.lastname@example.org
Next Wednesday is a key date for anyone with an interest in sterling. The Bank of England will announce its QIR or Quarterly Inflation Report which will provide insight into just how the pound will perform for the next few sessions. Whether you are buying or selling sterling this release is likely to create some movement on the markets which will alter the value of your currency purchase.
I am of the opinion some sterling weakness is likely and it is for a reason I have been highlighting for much of 2014. That is the gulf between what the Bank of England is saying about interest rates and what the market has priced in.
80% of currency transactions are speculative. The reason we see movement on exchange rates is indicative of what the market thinks or feels may happen. Since Mark Carney took office the pound has performed very well as the UK economy has improved. By tying Unemployment to the raising of interest rates focus has been very much on a UK interest rate hike. And perfectly legitimately the market has over bought sterling in anticipation of UK interest rates being raised sooner. If you look at the language of Mark Carney and the Bank of England however any possible rate hike is much further ahead than the market speculators are guessing.
Therefore I think despite the improvements in the UK economy warranting increased confidence, these high expectations surrounding sterling may now be misplaced and the risk to the downside has increased. Tomorrow we have some Industrial and Manufacturing data which last month caused sterling to weaken. We also have Trade Balance data tomorrow which we know is one of the major negatives surrounding sterling and the UK economy.
The outlook therefore for sterling has changed and just like the market has been subtly amending its positions anyone considering an international money transfer involving sterling too, should take note.
We are specialist currency brokers who offer market insight and commentary alongside award winning exchange rates. if you have a transaction to consider, small differences in your rate can make a huge impact on the amount of currency you receive.
For further information please contact the author directly on email@example.com or call 01494 787 478 and ask to speak with Jonathan.
Sterling has dropped against many currencies following improvements in risk appetite. Partly evidenced lately in the lack of any EM sell-off, rates on the more risky currencies have fallen back into line and I think this is a good time to be purchasing sterling since their is a strong likelihood the pound will strengthen again against these currencies.
Tomorrow we have UK Services data which is expected to show a small improvement in the rate of growth in the Services sector. However with most UK data lately not being quite up to scratch there is a potential for a slight correction and sterling dip.
The fundamental reasons for GBP strength should see this through and this is why if you have a foreign currency to sell for the pound I suggest moving sooner.
For more information on the market or your options please contact me Jonathan on firstname.lastname@example.org or call 01494 787 478