Tag Archives: sterling
Why the sterling rally may now be over!
I have been watching with interest GBP movements of late very sure that we are soon to be witnessing a decline. Yesterday’s fall has continued today and I cannot see any immediate return to the kind of trading levels we saw earlier this month. If you are looking to sell the pound to buy a foreign currency say for an overseas property purchase or for business, buying sooner rather than later may be sensible. If you do not have full availability of funds a forward contract could be perfect.
Today the IMF has said the UK is a long way from from recovery and this is likely to weigh on sterling in the short term. We have pointed out the major problems for the pound in many posts and it is likely this is the start of another dip. If you are selling a foreign currency to buy sterling then you are looking at an excellent opportunity that may yet get better in the short term. Where we go from now will depend on the economic data releases before the end of the week but it is clear a negative sterling bias has developed. If you are selling beware of getting too excited as the trend will of course depend which currency pair you are interested in! For a full overview of your transfer and to be kept informed of the latest news on your rate please register your interest at jmw@currencies.co.uk
Important data this week will be the GDP data due tomorrow at 09.30 am UK time. Expectations for the release are at 0.3% growth but any deviation, (hesitation or repetition) could cause market movements! Friday we have German business consumer confidence and US Durable goods orders, all potential market movers. Sterling will I feel remain on the back foot but we could of course see some profit taking or even a ‘Friday Run’ to provide a quick boost. Remember too the Bank Holiday on Monday for the UK, this will affect payments internationally and you may find it difficult to book a price with a currency dealer on this day. Taking advantage of our ‘Market Watch’ service may be invaluable to avoid the disappointment of missing out on your desired rates over the weekend. As usual please contact me directly on jmw@currencies.co.uk to find out more, an account can be opened instantly and you can be trading within minutes. We offer same day payments so ‘not having time’ is no excuse to settling for poor exchange rates!
The sterling rally always looked to be under pressure from weaker UK data and the possibility of more QE down the line. It appears that just as quickly as it started the pound is likely to be weakening again soon.
As well as offering assistance planning and managing your exposure to the currency markets we also offer exchange rates for which we have won awards. For a free, no obligation discussion of all the events affecting your rate please feel free to contact me directly on jmw@currencies.co.uk or call 01494 787 478 and ask to speak to me Jonathan
I look forward to hearing from you and assisting in any way I can… Even if you are quite happy with the rates you are achieving a quick call or email to us to check what you are doing and at what rates could save you money.
Thank you,
Jonathan
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Bank of England Minutes cause Sterling exchange rates to fall (Tom Holian)
After a good run against the Euro of late Sterling has had a difficult few days to the start of the week as GBPEUR rates have dropped by 2 cents. There are a number of factors to consider that have been negative to the Pound. As highlighted in yesterday’s report Inflation rates fell which caused Sterling to drop against the Euro.
In theory if inflation is low it means that the Bank of England can keep interest rates low for a longer period of time which means less confidence in investing in Sterling therefore causing the Pound to weaken.
The Bank of England minutes out this morning at 930am have seen a 6-3 split against continuing with further Quantitative Easing. The worry for the markets is that many doubt the Bank of England’s commitment to try to affect Inflation.
The recent extension of further bond-buying by the US has led to a huge amount of Dollar strength recently and with the UK deciding to opt against further QE themselves this could be another reason for Sterling’s recent weakness.
With the new Governor Mark Carney due to take over from Mervyn King in July his stance during his time in Canada is to keep interest rates low. If you’re considering making a currency transfer and want to ensure you are getting competitive rates of exchange that can improve upon the high street banks then feel to contact me directly for a free quote. Tom Holian teh@currencies.co.uk
The UK has this morning published Retail Sales which were 1.3% lower in April than in March as bad weather continues to blight the UK. Food sales also fell to their lowest monthly level in almost two years. With the UK having avoided a triple dip recession recently this gave Sterling a welcome boost but potentially the release has just papered over the cracks.
If you are buying or selling Australian Dollars feel free to check out our sister website www.australiandollarforecast.com which is more specific to your needs.
Sterling exchange rates await key inflation data this morning – What may happen to the Pound?
Sterling exchange rates are once again still fairly flat against the majority of major currencies, as we await inflationary data due out at 09:30am this morning.
Inflation data is key at the moment for the bank of England and it appears to be a thorn in their side, should inflation creep up too high we could start to see big calls for a interest rate hike as this is a route that can be taken to tackle high inflation. An interest rate hike is generally seen as positive for the currency concerned and a rate cut is seen as negative so this could lead to a little boost for the Pound.
Tomorrow is also key, we have the Bank of England minutes from the last interest rate decision (the first since being out of recession) and any indications of rate hikes or quantitative Easing may lead to a volatile Wednesday morning for the Pound.
Do you carry out currency transfers and find our information useful? Did you know we can help with currency exchange as well? We can get award winning rates of exchange and also offer a great level of customer service for bank transfers ranging from £1000 to multi million Pound transactions. Email me today djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you.
Pound strength following King Speech (Steve Eakins)
Today, which is probably the busiest day this week has already provided a few surprises. It was this morning confirmed that France has re-entered a recession creating euro weakness, UK Unemployment is improving and then currently the current Governor of the Bank of England, Mervyn King, in his last speech seems to be talking the value of the Pound up. In summary GBPEUR rates have now risen from the 2 week low at the beginning of the day towards a near 4 month high we last visited 4 weeks ago.
So what next for GBPEUR exchange rates?
Near future – EURO buyers may want to hold off till tomorrow when we have the last big data release for GBPEUR this week when the Eurozone confirms their Consumer Confidence figures for April. The expectation is for this data to show a contraction so rates may climb further for GBPEUR following this news which is released at 10 am BST. Euro sellers may want to move before hand as a result.
Medium term – Next week we have UK Production Price Index, UK Retail figures, Bank of England minutes, UK GDP figures and UK Mortgage approvals. Expectations for these releases will be more concrete on Monday so keep reading here for the latest forecasts and updates on these releases. This should help highlight potential buy and sell opportunities when it may be the best time to trade through next week.
Longer term – A lot hinders on the new Bank of England Governor Mark Carney that starts his post at the end of June. He may want to come in with an instant impact changing interest rates or the current asset buying program. It may the beginning of July when we see this and is already expected to be an interesting event that may give direction to exchange rates for the following few months.
If you are in the currency market and are interested in a more personal view on how the above events could affect you, feel free to contact us on the normal number (01494 787 478) or myself personally, Steve Eakins via email at hse@currencies.co.uk
Many Market Movers in May! Can sterling go higher?
As we approach the halfway point of the month we see the pound holding some of the gains we have witnessed in April but still very much under pressure! Unfortunately there is very little on the horizon to indicate significant further gains this month. If you are selling pounds to buy another currency holding out for further gains could be very risky, current levels should not be easily dismissed. Here are some of the key thing to note if you are buying or selling which may affect your rate.
If you would like more information on a particular subject or on events surrounding your particular transfer please speak with me directly on jmw@currencies.co.uk
Will the UK leave the EU? Expect pressure on sterling due to political uncertainty. Markets and investors want certainty in their investments. Fears of the damage a split Tory government, the rise of UKIP and a broken coalition would do to UK business weighed on sterling yesterday. Can Cameron tackle the ghost of conservative past and deal with the question of Europe? It is doubtful I have to say and this will weigh down the pound.
UK Growth Last months data was impressive and welcome but 0.3% is not anything to get too excited about. True the latest data sets have all been positive but the marginal improvements on what were dire figures still have a long way to go. Ultimately the UK’s stagnant housing market (particularly outside London) needs invigorating – Construction is the main drag in recent years. The second revision of growth figures at the end of the month could easily be a market mover.
Depending on which currency pair you are trading there will of course be many other things to move the market. Looking in my crystal ball (which has been pretty clear lately) I cannot see significant gains for GBP against the majors. Maybe a cent or two? Once again I see more danger of things dropping as the confidence of the last few weeks wears off.
If you have a transaction to consider I would be interested to speak to you explain the market and offer our services with a view to getting you the best deal. For more information please email on jmw@currencies.co.uk
I look forward to hearing from you!
Bank of England Quarterly Inflation report, EU GDP figures and the Australian Budget. Busy week on the currency markets! (Mike Vaughan)
Sterling started the week poorly against a number of currencies falling against the Euro and US dollar but continuing its recent resurgence against the Australian dollar. This week there is plenty of data to keep anyone with a keen eye on the money markets with some of the notable data sets as follow:
- Today 09:30 BST - Australia will release its yearly budget. This will be keenly viewed as the Australian government faces questions about its handling of the economy ahead of elections later this year. With the economy having been affected by weaker global forecasts and in particular from China, for which the Australian economy is heaviliy reliant, the outcome of the budget could be very interesting. Some analysts say that while the mining sector has been the driving force behind Australia’s steady economic expansion, other parts of the economy have stagnated or grown much less quickly. A key reason has been the strength of the AUD and the RBA (Reserve Bank of Australia) have been open in highlighting their concerns and may act to devalue the dollar, potentially good news for those buying dollars.
- Wednesday 10:00 BST- anyone with an interest in the Euro should watch out for EU GDP figures. Figures are expected to stay at -0.9% but any deviation from the expected figure and watch out for volatility on Euro exchange rates.
- Wednesday 09:30 BST – UK unemployment figures expected to stay at 7.9%
- Wednesday 10:30 BST – Bank of England Quarterly Inflation report and Mervyn King press conference. The BofE publishes a report of the detailed economic analysis and inflation projections on which the Bank’s Monetary Policy Committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the following two years. Watch out for any clues with regards to QE, I personally believe the Bank will stay firm on its current p[olicies until the new governor Mark Carney takes over from Mervyn King in July.
- Friday 00:45 BST – Japan GDP release, expected to show an increase from a flat 0% to 0.7%.
- Friday 13:30 BST - to finish off the week on Friday we have inflation figures and unemployment data from the US at 13:30 BST.
As you can see we have plenty of data released for the rest of the week. To be kept up to date with the impact these data sets may have for your individual requirement then please contact me and I will happily run though my forecasts and run through the various contracts we can offer to help maximise your currency exchange. I am very confident I can help achieve a better rate than your current provider. Please call the office on +44 (0)1494 787478 or email me (Mike) with a brief overview of your requirement and I will gladly contact you to help with your money exchange. I can be reached at mgv@currencies.co.uk
GBP/EUR, GBP/USD, GBP/AUD exchange rate forecasts. Get help to maximise your currency exchange (Michael Vaughan)
As expected the Bank of England (BofE) decided to keep interest rates at a record low of 0.5% and decided against extending its Quantitative Easing (QE) programme.
This outcome was very much forecast and the market did very little as a result as many analysts expect little to come from the BofE until new governor Mark Carney takes over from Mervyn King in July. Following the release the National Institute for Economic and Social Research (NIESR) released its forecast for GDP for the last three months to include April, the figures showed a stronger than expected level of 0.8% continuing the recent positive tones coming from the UK, something that could lead to sterling strength against a number of major currencies.
GBP/EUR
Sterling exchange rates have shown a marked improvement against the single currency since the year low of 1.1370 in March. Since this time the market has peaked at 1.19 (a shift of 4.5%) but has now remained range bound between 1.1750-1.1850 since the start of May. But what now for GBP/EUR?
For me I believe the pound will begin to find further support and may break through the 1.20 barrier heading into June, however I believe when Mr Carney takes over his reign as the head of the Central Bank then I believe he will look to impose himself immediately and look to extend QE to help boost the UK economy further. Should we see this then I would expect Sterling exchange rates to fall back towards the 1.18 territory as a result. For this reason anyone looking to buy Euros I feel you may get better value in the weeks to come but those selling may wish to consider their options.
GBP/USD Exchange Rates
As against the Euro, sterling has seen a mini-recovery against the greenback rallying from the year low of 1.489 in March to 1.559 earlier this week. This again represents a 4.5% shift in less than two months and to me represents a strong buy opportunity.
For me I feel GBP/USD is reaching a peak and would expect levels to fall back towards the 1.52/53 level as again the pound is likely to come under threat from future expectations regarding QE. I also feel it is a matter of time before problems in Europe re-surface and the major benefactor is likely to be the USD.
For those looking at GBP/USD in the coming days watch out for a speech from Federal Reserve (FED) Chairman Ben Bernanke this afternoon at 13:30 – positive tones from Bernanke are likely to lend support to the US dollar this afternoon.
Has the Aussie bubble burst?
In the last month the pound has rallied close to 9 cents against the AUD following weaker sentiment from China, and the Reserve Bank of Australia cutting interest rates earlier this week. This is creating some great opportunities for AUD buyers a trend that may continue.
For anyone selling AUD I would still urge you to take advantage of rates that are historically still very favourable. The average trade price for GBP/AUD for the last year sits around 1.54, so with levels currently at 1.52 you are still ahead of the game. For me the current trend and sentiment from Australia is a concern and I would expect rates to move towards 1.55 as I feel the central bank is still concerned about the strength of the Aussie and the impact this is having on the value of Australian exports. I would not be surprised to see another interest rate cut within the next 3 months, something that could devalue the AUD further.
Should you have an upcoming money exchange to arrange and you would like more information on the currency service we provide please contact the office on 01494 787478 or email me (Mike) at mgv@currencies.co.uk
Pound Sterling exchange rates – Once again Thursday is the day that may be key (Daniel Wright)
Sterling exchange rates have been reasonably static lately against the major currencies however tomorrow has the potential to be quite a market mover.
We have Australian unemployment figures out overnight tonight followed by Industrial and manufacturing production figures for the U.K tomorrow at 09:30am. The unemployment figures have the potential to shift rates against the Australian Dollar and the production figures may affect the Pound against all majors.
Most importantly we have the Bank of England interest rate decision and any further news on more Quantitative Easing will be extremely key. For those of you that have follwed the market over the past few years it seems that every time Sterling is performing well and heading into the right direction the Government or the Bank of England step in and do something to knock it back down again so you must be aware this is the perfect time for them to do so.
Should tomorrow pass without any surprises I think the Pound may be set for another positive month now that the potential recession is out of the way and focus has turned to other troubled economies hopefully Sterling will become a currency of choice once again.
If you have an upcoming currency transfer involving buying or selling the Pound then feel free to contact me directly as I can assist you with not only getting the very best exchange rate but also a full round service of making the transaction as smooth as possible. If this sounds of interest then please email me directly djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you.
Sterling at a three month high against the Euro, Aussie and US dollar (Mike Vaughan)
As expected the European Central Bank cut its base rate to a record low of 0.5% from 0.75% earlier today pushing GBP/EUR close to 1.19 for the first time in nearly three months, as Mario Dragji (head of the ECB) indicated he would consider cutting rates further and could not rule out negative interest rates. The move for sterling has been a welcome relief for many and showing little sign of slowing, in fact the pound has now gained 4.3% against the single currency since its low in mid March and a very similar trend has been experienced against a number of major currencies.
Moves against the greenback and Aussie have been even more substantial seeing a shift of 4.5% since mid March against the US dollar and 5.2% against the Australian Dollar in the last month. This makes a significant difference on your money exchange and may represent a strong buy opportunity for some, however I guess the question for many is will this last?
For me I believe this could be the start of a correction for the pound, certainly against the Euro and Australian Dollar but I feel the US dollar is less clear and will remain range bound between 1.53-1.55. Those buying Euros and AUD may get more from the market and I would look for levels to head towards 1.20 for GBP/EUR and possibly 1.55 for GBP/AUD. AUD buyers should watch out for the next RBA meeting (Reserve Bank of Australia) scheduled for Tuesday next week, should the RBA Australia cut interest rates (as some analysts are predicting) we could see a further shift for GBP/AUD, I feel the RBA may also be considering further rate cuts later this year and would expect to see more value for AUD buyers in the coming weeks, particularly should China show further signs of an economic slowdown.
For those looking to buy the US dollar I would certainly consider 1.55 to be viewed as good value and feel this has the potential to move back towards 1.50, although data of late from the US has been weaker than many expected which has pushed cable close to 1.56. Tomorrow watch out of US non-farm payroll figures that are expected to show a strong increase from last month, something again that could lend support to the dollar in tomorrows afternoon session. Much of the dollars moves will come down to perceived appetite for risk and I think with the market still so jittery losses for the dollar will slow and would expect levels to shift back in the dollars favour, I would expect US dollar sellers to get more value in the coming weeks.
Should you have an upcoming trade to arrange and you would like to discuss the market in more detail and how we can help you achieve a competitive commercial rate of exchange then please get in touch. We are here to help. Please email with your particular currency requirement and I will happily get in contact to discuss your options to help you maximise your trade. Email mgv@currencies.co.uk
Pound Sterling exchange rates against the Euro – Will we see an interest rate cut today? What effect will it have? (Daniel Wright)
Today is a big day for Europe as we may potentially see an interest rate cut which could lead to further weakness for the Euro.
Exchange rates for the pound against the Euro have remained fairly steady since the big push up following the issue in Cyprus however today has the potential to move rates onwards and upwards once more.
Of course, with so much speculation that this is going to happen there is a huge risk that if we do not see a cut in rates then we may see the Euro gain a little strength quite rapidly as the markets correct themselves – If you have a pending transfer to carry out involving buying or selling the Euro then it is key that you are ready to act fast.
If you would like me to get in touch personally following the decision then feel free to email me djw@currencies.co.uk with a brief description of what you are looking to do and a contact number for me to call you on.
We also have some construction figures for the U.K this morning which could give a nod to how the second quarter started for the U.K in 2013 -This could affect the Pound against all major currencies – We are currently at an 11 week high to buy the Australian Dollar and Canadian Dollar which does lead to a great temptation to buy these particular currencies in case we see nthe rates slip back down again.
Personally I think Sterling confidence is up and the Pound may well start to creep in the right direction as I have been saying since the start of this year, however you must also be aware that the pattern tends to be that as soon as Sterling looks like it is finally about to push on something comes out to knock it straight back down again.
If you want to achieve the very best exchange rates, or even to ask me if the rate you are being offered is good before you accept it then feel free to get in touch with me directly – You can contact me by email djw@currencies.co.uk or call me directly on 01494 787 478 during U.K office hours, please ask for Daniel Wright.
