Tag Archives: strength

Are you placing too high an expectation on sterling exchange rates rising?

So today the unexpected happened and two members of the MPC (Monetary Policy Committee) Martin Weale and Ian McCafferty both voted to raise interest rates citing improvements in the economy and expectations wage growth could soon rise in line with inflation which has been falling. The effects were immediate and sterling spiked up reaching a peak of 1.2546 (GBPEUR) and 1.6679 (GBUSD) offering relief to anyone buying a foreign currency with the pound. The gains were quickly undone however with sterling finishing the day only about 0.1% above the opening on most pairings.

I think this highlights the danger in banking on big improvements in sterling exchange rates in the future. Here we have had the first split vote since 2011 at 7-2 and the effects were rather timid and failed to help lift sterling to the lofty heights we enjoyed a few weeks ago. I think if you need to buy a foreign currency with sterling making some plans now is a wise move since it is difficult to see where any further major boost will emanate from.

Tomorrow are Retail figures plus Government Borrowing data which may all serve to help lift the pound. Both releases were actually negative for sterling last month so if you are in a position to be holding sterling waiting to buy another currency, moving sooner might be the best course of action. To help catch the very best rates we offer STOP LOSS and LIMIT orders which trigger when certain levels are hit. This is often the only way to catch the best rates since the market can move so quickly!

For more information on what is the best approach to your currency situation please contact me Jonathan on jmw@currencies.co.uk. I have been working as a currency broker for 5 years and have lots of experience in the planning and execution of international payments. I look forward to hearing from you.

Jonathan

 

Interest rates dictate the movements for the pound and Euro in the UK and Eurozone. (Ben Amrany)

On a day where there was an outside chance of the Bank of England hiking interest rates the pound was left very much disappointed with no movement by the Governor of the Bank of England which left the pound hovering around 1.26 against the Euro and 1.6820 versus the US Dollar.

For those buying or selling Euros the main spotlight for the day was firmly on the European Central Bank (ECB) who also  released their latest interest rate for the month of August. We were expecting more of a chance of policy change from the ECB after two months ago they announced unprecedented monetary easing which assisted the pound in gaining to the highs of 1.2699. The ECB stated they were not making any change to policy and may look at things next month should inflation not start to rise so it may be another month before a further push for the pound occurs.

Even if this does happen though the IMF (International Monetary Fund) recently stated that they felt the pound is a good 10% overvalued and if the Bank of England feel the same we could see a rate hike be put off until next year as it may strengthen sterling further if it happened to soon.

 

As we head into the last day of the week tomorrow the UK trade balance figures could weigh on the pound should our trade balance not fall as much as expected.  We still feel that GBP/EUR will be range bound from a low of 1.25 to 1.2650 and GBP/USD  from 1.6750 to 1.69 for the next week or two.

If you are looking at making an  exchange to buy any of the major currencies we can help you make a saving n your exchange by up to 4% over the high street banks. I offer a very personal service to give you the information needed to help you decide when to buy. If you feel that you would like to compare our rates then please do feel free to contact myself Ben Amrany at bma@currencies.co.uk

 

How Secure is Sterling’s Meteoric Rise in 2014?

Sterling has clearly risen sharply this year representing an excellent time to buy a foreign currency with the pound. There are however a number of factors to beware of which could easily see the pound drop in the coming months. If you need to make a foreign payment understanding the market and how to go about getting the best deals is central to enhancing your advantage.

Ultimately no one knows what will happen in the future but like weather forecasters, we can look ahead and based on what we know make certain calls as to what may or may not happen. Tomorrow is the Bank of England Interest Rate decision meeting where we could see some movement on GBP rates. No change is expected but the release by nature can be volatile as investors seek to second guess the market. Perhaps more interesting is the ECB decision and Press Conference afterwards at 13.30. Recent Eurozone data has not been particularly encouraging and any comments by Mario on this could cause some EUR movements affecting GBPEUR positioning

If you need to make a currency exchange please email me Jonathan jmw@currencies.co.uk for information to help you get the best deals.

Will sterling keep up this current trajectory?

Tomorrow is UK Retail Sales and Friday is the latest UK GDP (Gross Domestic Product) data. Both of these releases could easily spark volatility in the market underlining the importance of keeping up to date with the market. In the last few weeks sterling exchange rates have crept up notably against the Euro but we are at multi year highs against pretty much everything! Can sterling keep on this trajectory?

Well early indications seem to think so with recent poor borrowing economic data being ignored in anticipation of an interest rate at hike at some point in the future. As is so often the case with exchange rate it isn’t just which currency is the best, it is that others are very unpopular! Take the Euro for example, we may still see some QE (Quantitative Easing) in the future. This form of ‘printing money’ is very bad for the currency as by increasing the money supply it effectively dilutes the strength of the currency. The UK used QE many years ago and this is one of the reasons the pound dipped to almost parity with the Euro, imagine the detrimental effect QE in the Eurozone would have on GBPEUR rates!

If you have any need to buy large volumes of foreign exchange getting the best exchange rate is central to making the most of your money. The authors of this blog and I are extremely confident we can undercut other sources like banks and other currency brokers on exchange rates, plus also offer practical assistance in the timing and management of your payments. For a quick rundown of your situation and a comparison why not make contact? We can then have a quick chat at no cost or obligation and you can decide for yourself what is better! After all if you were entirely happy with your current situation you probably wouldn’t have read this far!

Jonathan Watson, jmw@currencies.co.uk

Sterling has another positive day against most majors (Daniel Wright) Why did inflation data lead to Sterling strength?

The Pound has had a fairly good day on the market once again with a further small improvement against the Euro pushing the GBP/EUR exchange rate extremely close to a two year high which makes it an extremely tempting time to secure Euros for the purchase of property overseas or indeed for any business requirements.

I have had many clients this week decide to lock into their exchange rate on a forward contract to make sure they do not miss out on this current spike should the Pound drop away again and it is indeed turning into a very prudent approach, as many of those clients agreed to buy their property in Europe when the rates were a lot worse.

As an example, if you were buying €120,000 three weeks ago it would have cost you roughly £3,000  less now – This could pay for you to start furnishing your new holiday home or indeed pay for flights over there and back ten times over! To lock into a rate of exchange you only need to have a small deposit available so you do not even need the full availability of funds and you can lock in your rate for anything up to a year – Feel free to email me directly on djw@currencies.co.uk for more information on how to take full advantage of this handy contract type and I will be happy to answer any questions or queries you may have, along with helping you book something out if you wish.

The reason we saw the main spike yesterday was all due to a climb in inflation. A way to combat high inflation is to raise interest rates and generally a hike in interest rates can be seen as positive to the currency concerned. With the markets moving on rumour as well as fact this high inflation level did spark investors to believe that rates may go up earlier than first thought.

Today we saw unemployment figures improve a little for the U.K to 6.5% however this was pretty much cancelled out by the fact that wage growth was a little worse than expectations  and the Bank of England have also stated they need to see wage growth out weight inflation for a period of time before they feel that the recovery is on top form and they really can start to move interest rates up so this was a minor setback.

We do not have a huge amount left to come out this week for the U.K however one release to watch out for, for anyone following the Euro we do have European inflation data out at 10:00am.

If you have an upcoming transfer to carry out and want to get the best exchange rates along with great customer service and knowledge of the markets then email me (Daniel Wright) directly on djw@currencies.co.uk  I welcome all contact for bank to bank transfers however I am afraid I cannot help with cash transactions or speculation.

Key reasons for not delaying buying sterling

To readers who have a foreign currency to sell and wish to buy sterling I would not hang around too long. The recent dips in your favour today and yesterday should definitely in my opinion be viewed as a good time to sell. The longer term forecast clearly appears to favour the pound over most currencies and whilst exchange rates are not as good as they were some months and years ago, there is a very strong likelihood it will get worse.

If you need to buy the pound soon or in the future it is probably a good idea to consider a forward fix on the rates to help further reduce the uncertainty. The longer term forecast for the pound is that the UK will raise interest rates well ahead of the rest of the US and the ECB which should result in much higher rates in the future. The big questions of course is when exactly this will happen, some have forecast the move this year for the UK, others early 2015.

For more information on the exact price we could offer to you why not make an enquiry direct with me Jonathan on jmw@currencies.co.uk

Sterling Euro exchange rates ahead of European central bank interest rate decision and press conference – Traders and speculators alike poised (Daniel Wright)

Today has the potential to be quite a market mover for exchange rates against the Euro.  Shortly we have the Bank of England interest rate decision which we do not expect to see any great surprises crop up from, later on this afternoon we have the European Central Bank interest rate decision and press conference which has the potential to cause quite some volatility on the markets.

There is great speculation that something will be done by the ECB this time around, mainly due to comments by head of the European Central bank that they expect to put something in place during the June meeting which may be QE or indeed interest rate movements.

Either of these courses of action you would image may weaken the Euro however do be aware that there is a fairly high chance that any measures may have been priced in so we could possibly see the Euro gain strength if the actions from the ECB are not as firm as have been spoken about.

This is a key period for the Euro and if you are looking to carry out a currency exchange in the near future involving either buying or selling the Euro or the Pound then it is well worth you getting in touch with me directly as not only can I provide key market information, but I also work for a company that has won awards for exchange rates and customer service.

Please do feel free to email me directly on djw@currencies.co.uk with a brief description of what you are looking to do and a contact number and I will be more than happy to call you personally to explain the service and how I may be able to help.

Pound sterling forecast quoted in the Daily Mail today!

You can read the full link here. If you have any currency transactions to undertake and wish to learn the forecast please contact us. We primarily specialise in handling larger currency transactions (GBP 10k and upwards) but do hope our loyal readers and Daily Mail readers alike find our information useful!

Jonathan

jmw@currencies.co.uk

 

Busy week on exchange rates! What will happen to your exchange?

Recent positive sterling moves have been exacerbated by improvements in the currency outlook for the pound. Services data today showed yet further improvements which should mean we expect only further GBP strength against most currencies, but not all! Read on to get a quick overview of important things to note regarding your pair. For a more detailed outlook and information on making international payments at better exchanges rates than banks and other sources please email me on jmw@currencies.co.uk

GBPUSD – The USD is on the back foot following some bad GDP data last week. Despite an improving employment outlook the USD still stands to lose out in the future and I am sure we will see 1.70 soon. The chance of any US Interest rate hike is now miles off in the future, well behind that of the UK and the pound hence the improvements on this pairing. The USD will find favour however whether from Ukraine uncertainty or an improving economy so don’t hold out too long…

GBPEUR - The Euro appears weak against sterling but is actually very strong. If you look at the Euro against the US dollar and Australian dollar you can see it is at historically very strong levels. Much will be outlined by Thursday’s ECB decision, will they look to weaken the Euro? One interesting fact to note is that the ECB view EURUSD at 1.40 as unfavourably strong so if the trend of Euro strength, USD weakness continues the ECB may speculate over intervention into the market. Watch this space!

GBPAUD - The RBA have achieved their primary goal of weakening the Aussie, indeed this has been very successful. They are no longer targeting a weaker Aussie and improvements in the Chinese economy warrant a firmer Australian currency.

The pound looks set to be the main beneficiary of improved economic sentiments. All in all if you are planning to buy currency soon with sterling, taking stock of the current market is very sensible. We can forward buy currency and offer a range of options to limit your exposure to the market. A quick phone call or email to us really is a wise move as we are specialists with many years experience in the planning and execution of your international payments.

Hope to hear from you soon!

Jonathan Watson

jmw@currencies.co.uk

+44 (0) 1494 787 478

Great Expectations… GBP Weakness…

The pound has dipped this morning despite a raft of good economic data showing improvements in government borrowing and falling budget deficit. There had been some high expectations of seeing the pound move higher due to a more hawkish outlook by the Bank of England but this failed to materialise. As one of my clients said to me ‘you can’t even trust the Bank of England’ nowadays…

This was in reference to their commitment to consider raising interest rates if the Unemployment rate dipped below 7%. This particular caveat was of course met recently causing the pound to spike but for now the BoE will not be raising interest rates, it would simply cause more problems.

If you are expecting the pound to just keep rising you could therefore be very disappointed as we need to see some really good data to warrant such a spike. I find the best way to maximise your return on your currency exchange is to set realistic targets and limits. If you would like some assistance in the execution and planning of your transfers please contact me Jonathan on jmw@currencies.co.uk, even if your transfer is just a once off, we can help get you the most for your money.

Thank you,

Jonathan

 

 

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