Tag Archives: the best pound sterling rates
What will move pound sterling exchange rates today? (Jonathan)
The pound has enjoyed a big boost following last week’s better than expected GDP figures. Gaining over 2 cents against the Euro and one cent against the Dollar such unexpected news shows the importance of keeping in close contact with the authors here on pound sterling forecast. Will these gains last and what can we expect today?
Well there is not a huge amount of sterling data out but pound sterling rates will be moved by other factors. The only sterling data this morning was a consumer confidence survey which actually showed a fall in confidence among consumers. And I personally would agree with these sentiments. Even though the economy is now ‘growing’ I don’t think the man in the street would say he was particularly better off than he was earlier this year, if at all.
The first data sets of interest have been German Retail Sales which were down year on year and has given the euro a slight loosening this morning against sterling. At 10.00 we have the Eurozone Unemployment rate which could be a market mover and set the tone on GBPEUR for the rest of the day. There is also a conference call by the ‘Eurogroup’, a team tasked with assisting Greece, but no firm decisions are expected. I think anyone selling Euros would do well to take advantage of this current lull in the debt crisis as surely it is only a matter of time before events spiral out of control.
At 12.30 we have Canadian GDP data which could cause the CAD to dip back below the magic 1.60 mark if it comes in stronger than expected. GBPCAD buyers have been enjoying some of the best rates in four months so if you have a GBPCAD requirement I would take stock and consider this a good buy opportunity.
In the US the after effects of Hurricane Sandy will surely capture headlines although we have not seen a huge amount of movement on rates. Concerns on the dollar are beign shaped around the outcome of the US election and anyone with an interest in any currency pairing should be aware of the potential impact this could have on all currencies. The USD is a ‘safe haven’ currency and moves not just on US news but also global events. The far reaching economic and political implications of a new US President can affect these sentiments and cause unexpected changes on rates.
On the sterling side at 18.00 we have Deputy Governor Bean of the Bank of England give a speech which could be indicative of policy, although over the weekend he did speak playing down the significance of the recent good GDP news, with no major new news since the weekend it is likely therefore his speech will not contain anything unexpected but we should watch for any indications of more QE. All in all not the biggest day for the pound itself, but don’t be surprised to see pound sterling rates move on the back of shifts in sentiment.
For a full break down of all the ins and outs of safely transferring money internationally at unbeatable rates of exchange please feel free to get in touch with me personally on 01494 787 478 or email jmw@currencies.co.uk
The building blocks to a sterling recovery start at home… Important Releases for October and the rest of the year (Jonathan)
The Pound has continued it meagre performance of late with an unsurprisingly poor number on Construction this morning. The lack of Construction growth is going to be a major challenge for the GDP number and will undoubtedly continue to weigh on the performance of the pound.
Construction has been a big problem for the UK and the pound in recent years. The property booms in the 1990′s and the earlier part of 2000 contributed to and were a result of a growing GDP (Gross Domestic Product) number. People had more money and property prices went up. People made money on their properties and either bought another (pushing prices up further) or cashed in equity which went into more property or into the wider economy (pushing prices up further).
The major decline in property prices has had a negative impact on GDP and today’s figures confirmed that Construction looks set to be a drag again of Q3 GDP figures. Until the property market makes a solid recovery and the slack is taken up, builders won’t be building and GDP will remain subdued. The next round of GDP data incidentally is released on the 25th October and is key for anyone with an interest in buying or selling the pound in the coming weeks and months. The first estimate of the previous quarter’s growth is often an unknown and the Olympics, taking up a huge amount of peoples time and not necessarily their money could actually have been a drain on the economy. Retail Sales and many other indicators confirm all was not so rosy for the economy during those memorable weeks.
The same fear and uncertainty that is driving governments globally to ‘ease’ their way to an economic recovery, is the same fear and uncertainty that is preventing consumers and businesses from spending their hard earned cash.
This Thursday is the Bank of England rate decision and whilst no change is predicted, the Minutes of this week’s meeting which are due on 17th October could be much more telling as to what extent we can expect more QE is due in November. This is when the current round ends and so much monetary easing is taking place globally, there will probably be much pressure on the MPC (Monetary Policy Committee) to act.
The Bank of Japan last month announced more easing, the Federal Reserve in the US last month also launched a further round of stimulus, China embarked on further stimulus and the Reserve Bank of Australia cut rates again last night (weakening the Aussie). It would almost be rude not to look at more QE by the Bank of England! QE (Quantitative Easing) and Interest rate cuts serve to weaken a currency by reducing investor demand. In the current global economic climate ‘easing’ whether through rate cuts or QE is ever more popular. Understanding the relationship of economic policies to a currency’s performance is key to understanding exchange rate fluctuations. If you would like to learn more I will be happy to explain to you in more detail, please contact me directly on jmw@currencies.co.uk. It really could save you money if you are considering an exchange. Particularly if planning something at a rate hugely different from current levels or way off in the future.
So to assess the outlook for the pound let us look at the facts. The Euro crisis is worsening, of that there is little doubt. Eurozone Unemployment is still rising and there is little sign of improvements in the economic outlook for the single currency anytime soon. China are clearly worried about a global slowdown as are Australia with yesterday’s rate cut and the prospect of a new potentially protectionist President following US elections could spell yet further woes for the global economy.
Recent reports of the UK economy getting back to growth in the near term and Q3 of this year are obviously welcome, but don’t forget we have been in recession for almost a year! And this was the year in which we have had the Olympics, heralded by some as the answer to all of our troubles. In my lifetime I have never seen such a great positive mood in the country, as created by such excellent sporting achievements and this is of course impossible to put a price on. People sat at home cheering on the magnificent Mo Farah however does not equal spending on the high street or by businesses. The same fear and uncertainty that is driving governments globally to ‘ease’ their way to an economic recovery, is the same fear and uncertainty that is preventing consumers and businesses from spending their hard earned cash.
Better UK data could well spell some good spikes over the course of the next three months but the underlying conditions remain bleak and as Mervyn King and the rest of the MPC will be undoubtedly making clear soon, further Quantitative Easing and yet more sterling weakness looks to be a dead cert.
Ultimately no one can say exactly what will happen on exchange rates which is why a bit of forward planning is essential.
For more information on getting the very best exchange rates plus a forecast unique to your particular requirements please feel free to make contact directly with me Jonathan on jmw@currencies.co.uk or call 01494 787 478. I welcome any enquiries for new and old clients looking for assistance on their transfers. I look forward to hearing from you and hopefully enlightening you! Thank you.
Will the pound remain this strong for much longer?
The pound has been on an incredible run of form in the last few weeks as fears over the single currency cause investors to change their positions according to changing economic sentiments. Sterling against the Kiwi, Rand, Loonie and Aussie has been at its best all year in the last couple of weeks. And against the Euro and Dollar too, the pound has made excellent gains which many have capitalised on. The question we can now ask is what next, will this run continue? We have covered in posts over the last few weeks how the pound has found favour because of the UK’s approach to its debts and budget deficit. Compared to the mire developing in the Eurozone, and the US’s reluctant attitude to confront its debt problems, the pound has found favour as traders feel the UK is setting itself up to be in a better position down the road. Is this really the case though?
There are a number of reasons why anyone hoping the pound will continue to make gains on EUR, USD, AUD, CAD, NZD, ZAR and all the rest should beware. Let me explain some of them here:
We are in recession! Stating the obvious perhaps? But when this was announced last month the pound barely moved against most currencies. Recession means the economy is shrinking. That makes dealing with the massive debt pile even more burdensome. With Mervyn King himself predicting no return to growth until the later part of the year the economy and the UK’s ability to tackle its debt has therefore stalled. Will those investors who currently favour the UK’s approach be so supportive if the very measures designed to keep the UK ‘safe’ are in fact doing more harm than good? I would not be surpised to see a real run of bad data in the coming months particularly with the Eurozone crisis going from bad to worse.
UK plc needs a strong Europe You do not need to read too far in the press to find negative comments about Europe. This has and probably always will be the case. The reality nowadays is the UK needs a strong Europe to keep our economy strong and foster growth. One estimate puts at 40% the amount of trade the UK receives from Europe. Many of the private businesses Mr Cameron and co regularly put pressure on to drive through the recovery, rely heavily on orders from Europe. The UK is also deeply exposed to the European debt crisis through our banking sector. If the banks runs in Europe continue to weigh on the European banking sector and the Governments and banks cannot pay back their debts to the UK, we could see UK banks needing recapitalisation. The UK is still limping, licking its wounds from the last financial crisis. The last thing it needs is another kicking now! If considering any transactions involving the pound the next few weeks could really push things one way or the other. To find out more specific to your requirements please feel free to contact me personally on jmw@currencies.co.uk or call +44 1494 787 478.
More QE may be inevitable More Quantitative Easing may be the only option to kickstart the UK’s economy later this year after we are all partied out from the Olympic and Queen’s Jubilee celebrations.
Markets move on sentiment and rumour The currency markets are often only reflections of sentiments. Currently the UK is favoured but this can quickly change. This Thursday, May 24th we have the first revision of UK GDP data for Q1. This data could well expose the reality that the situation in the UK may well get much worse before it gets better. Despite the huge undertakings by the current government the UK’s debt position is still torrid. The fear that may easily creep into investors minds in the coming weeks may be the reality the coalition has cut too much, too fast and has choked off the recovery. Remember it only needs to be these sentiments that develop for the situation to turn. If you are considering an exchange and are happy with current levels or would trade at a slightly better rate why not make us aware? Our highly personal service is designed to ensure you get the most from the markets and we can be your eyes and ears in the market.
I feel personally that with so many clear challenges ahead for the UK, the current positive sentiments for the pound may soon falter. One thing you should always prepare for on exchange rates is the unexpected and if considering any currency exchanges at the moment, to beware of all the events that could move your rate. The current Eurozone crisis may only get more problematic in the coming weeks and the negative effect this could have on the UK and the pound should not be forgotten.
Here at pound sterling forecast we are currency specialists working for the UK’s top currency brokerage. Through this website we can not only offer our expert analysis and opinion, but can also personally assist prospective clients with our award winning service and rates. I have never had any trouble making sure anyone who contacts me via this site gets the very best rates. Even if you have another source you are using, it is always worth a second opinion to double check what you are doing and that you really are getting the best deal. We offer a highly personal service to clients all over the world so to find out more about all of your options please feel free to email me directly on jmw@currencies.co.uk or call +44 1494 787 478.
I look forward to hearing from you.
If you need to buy or sell Sterling, Euros or US Dollars then this week’s interest rate decisions may decide the trend in the lead up to the New Year.
Good morning readers,
With two huge rate decisions for the UK and Eurozone this Thursday there could be quite a lot of volatility for sterling exchange rates over the course of this week. I have had many clients recently asking me what is going to happen with the pound against a range of currencies. The truthful answer is that with all the uncertainty surrounding the global economy and notably Europe it is very hard to exactly pinpoint where sterling exchange rates will be trading early next year.
Firstly we have to look at this week. With France and Germany recently meeting and another summit due on Friday week many analysts are stating that it is crunch time for Europe and if no resolution is found then the unthinkable could be around the corner. The pound has gained against the single currency today after Standard & Poor the credit rating agency has put 15 euro-area nations on watch for potential rating downgrades. The news of this is nothing new but we could be asking S&P if they could time there comments better. Every time EU leaders are trying to resolve things the credit rating agencies come out with major doom and gloom comments and markets across the globe falter again. This morning’s GDP figures for the Eurozone has shown signs of slight growth for the region but as the data came out exactly as expected we have not seen any major movements from this.
I feel the interest rate decisions on Thursday will be key to how things develop for the rest of December. There are different outcomes that could affect the pound and Euro against a range of major currencies. There is a possibility that the European central bank (ECB) could cut rates as they did last month. If this were to happen then I think the Euro could seriously weaken. If you are worried about this outcome and you have Euros to sell you may be prudent to act well before this decision. Email me at bma@currencies.co.uk with your details and I will call you to discuss the options that are available to you. If the ECB keep rates on hold then I cannot see the Euro gaining and will more than likely be fairly stable.
In the UK we are expecting the base rate of interest to stay on hold as it has for some time now. The biggest concern with those that need to sell the pound will be if the Bank of England’s Monetary policy committee issue another round of Quantitative easing. There have been rumours that this may be the case as it is the only way that they have had of trying to stimulate the economy. I feel that this could hamper the pound further against currencies like the USD, AUD, CAD, NZD, CHF & ZAR. We have already seen a big decline in the value of sterling against these currencies recently and if you need to buy these currencies before the New Year then I will be happy to speak with you to discuss timing and the options that are available to you. Email me at bma@currencies.co.uk to discuss your requirement and how we can make ultimately make you a saving on your exchange over the high street bank.
My biggest concern for the pound going forward though is all the doom and gloom surrounding the UK economy. It has all been highlighted recently with weak UK retail sales by the BRC and housing market survey by Halifax has highlighted the fragile state of the UK economy. There is a lot of pessimism surrounding the UK and the pound and let’s hope that the start of 2012 does not begin the way this year did with losses for sterling.
I would love to hear your opinion on what you feel will happen with the pound, euro and events in Europe. Please email me bma@currencies.co.uk and I will come back to you with how we can help you make significant savings on your currency exchange.
The UK as a safe haven?
When we mention ‘safe havens’ the UK is pretty low on the list of favoured options. A safe haven investment is something that is deemed to be very low risk and therefore a ’safe’ investment. In times of uncertainty favour for such investments increases as attitudes to risk change. As money pours into any investment it becomes more expensive to buy as the price goes up. Typcial safe havens would be Gold, the Swiss Franc and the US dollar. Gold and the Swiss Franc have appreciated in value massively in the last few years as investors seek safe havens amidst the doom and gloom surrounding financial markets. One of the reasons the US dollar has lost value is that when the financial crisis first hit in 2007/8, money poured into the dollar. Since then whilst major fears remain, the global economy has recovered and safe haven funds have been moved away from the dollar into other slightlier riskier assets like the Aussie dollar and even the Kiwi.
The pound is not really considered a safe haven in the same vein as Gold and the Franc, or even the dollar but that could be about to change. London has more FX transactions taking place than any other financial centre in the world and is therefore the largest foreign exchange centre in the world. The unique placing of the UK geographically means throughout the day we can deal with the Asian markets, European markets and the American markets. I also had read a report that the Chinese Yuan is to be developed more as a global currency and this is to be done with the assistance of the UK. George Osborne recently met with the Chinese Vice Premier to discuss this exact opportunity. As such a large financial centre London was majorly affected by the financial crisis but it does still retain a very strong international reputation for being a ‘good place to do business’. Such major moves as the work with China and the tough budget deficit reduction measures the coalition government has undertaken all have the goal of restoring Britain’s financial credibility in the long run. Yes we are experiencing some harsh times but we knew things would be tough. Only time will tell whether the measures taken to combat the UK’s debt problems are too tough. I feel the long term goals that are being pursued will give the pound strength but it will take time for this confidence to be restored.
If you have any currency requirements at present we can secure extremely sharp commercial rates of exchange. Even if your needs are in the future we can secure todays rates for a small deposit with no need for full settlement for two years. If you would like to discuss any of the issues surrounding your foreign currency transfers please get in touch on 00 44 1494 787458 or e-mail jmw@currencies.co.uk
