Tag Archives: USD update
Pressure on the Single Currency Continues but Concerns Over Stability of UK Economy Resurfacing
I wanted to take a moment before embarking on my next blog to thank our vast and growing reader base for all their positive comments about the site and their continued interest in our currency views. Your feedback has been invaluable and we appreciate any comments, both positive and negative, that will continue to help us impove and taylor the website specifically towards our readers needs.
Moving on and Wednesday has seen Sterling fall off against both the EUR and USD by the close of European trading and has offered a welcome opportunity for all those clients selling euro or USD. We have been continually bombarded over recent months with negativity surrounding the global economy and the sceptics amongts us will require far more than just potive words from the powers that be, before any long-term market confidence is restored.
The on-going economic struggles of multiple EU countries, particularly Greece, Spain and Italy have severely hampered the single currency and its ability to break free from its current stranglehold. It’s as if a positive statement is quickly eradictaed by two neagtive ones and anyone who follows the markets closely, ’as this particular analyst does on a daily basis’, can be forgiven for being close to despair on more than one occassion.
I suppose the million pound question has to be, which direction will the GBP/EUR currency pair take next?
In total honesty if I had the answer to that question I would probably not be writing this blog (or if I was it would in the tranquil surroundings of somewhat sunnier climbs) and the honest answer is unfortunately no one does. What we can do however is make educated guess’s and provide facts to back up our argument and that is essentially what we try and provide our readers with. We also provide market analysis and updates for over 40,000 clients, as well as provding some of the most competitive exchange rates in the country.
The way I am viewing the current economic climate in Europe is with the glass half full, which may well surprise many of you. The fact is the EU could not lose much more market confidence and with the official bailout request coming from Spain and Cyprus over the past week (it should be noted that these were both expected) I do wonder if we have almost hit rock bottom. With the annoucnement of EU leaders ’10 year vision’ to save the eurozone and the recent formation of a new Greek government, which seems to have eased some market tension, I do feel the tide is starting to turn and whilst it would be foolish to suggest that Europe’s problems are over, I do feel better times for the euro may be on the horizon.
Shifting the focus back to the UK and we already know that growth forecasts have been cut for the remainder of 2012. Further Quantitative Easing is also extremely likely over the coming months and if Mervyn King is to be believed, there are many reasons to suggest the recent highs GBP has been enjoying won’t necessarily last.
Whatever happens next it is improtant to stay up to date with the latest market movments, particularly if you have a currency transfer to initiate before the end of the year. If you would like to receive my market alerts, or have an upcoming currency transfer that you would like to discuss then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
Sterling back up into the 1.25′s against the Euro but down at a 4 month low against the USD as European woes continue to rock the markets
The pound has gathered momentum once more against the single currency spiking back up to 1.2541. The downside for the pound is that it has now reached a 4 month low against the USD weakening to a low of 1.5533.
The UK has had some positive data out this morning in connection with the UK’s money supply and mortgage approvals were up last month. The big news which is driving sterling though is events over in Spain. Spain’s borrowing costs have risen again and today the European commission stated that they think that bailing out ailing banks directly rather
than helping governments would be a better solution to helping Spanish banks.
The European commission has made their statement as fears over the health of Spanish banks have shaken the markets this week. The main gainer in all this mess is the safe haven of the USD. Investors seem to be fleeing to the safe havens as uncertainty continues to rock the global financial markets.
If you have Euros that you require exchanging to sterling or the USD or if you are a seller of the pound and need to by the USD, I personally feel that you should consider looking at doing your exchange either on spot or a forward contract to stop your current loss. I do not think that things will get a great deal better for you over the coming months so now may be a key time to look at your requirement and decide if you want to gamble or not.
Please feel free to contact me at bma@currencies.co.uk or call and ask for Ben Amrany from the number on the side of this page. I will be happy to discuss all the options that are available to you to help you maximise your conversion.
Forecast on data releases that could effect GBP, EUR, USD, AUD & NZD rates.
Good morning readers,
With lots of data out today and tomorrow for the UK and other economies we will take a look at some of the releases and how it may affect your upcoming currency requirement. Scroll down the list to find the currencies that apply to you. If at any time you would like to speak with me regarding your future currency exchange then please do contact me at bma@currencies.co.uk
AUD - The first data release of the day was down under in Australia. They had their GDP figures released just after midnight and it showed a contraction in their economy. Now because their economy slowed more than expected it has increased the likelihood that the Reserve Bank of Australia (RBA) will cut interest rates again to bolster demand. This caused some AUD weakness overnight with the rates moving from 1.4861 to 1.4957.
Moving forward the RBA are under increasing pressure to weaken the Aussie Dollar as it is harming their exports. If further bad data comes out of Australia like employment figures then you will find that there will be further speculation of rate cuts which will continue to slightly weaken the Aussie Dollar. If you have Aussie Dollars to sell I personally feel that with the current high levels against a range of other currencies you may miss the boat if you do not act fast. If you require buying Aussie’s in the near future hold tight as i feel that mid 1.50′s is around the corner. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
EURO – At 11.00 this morning Germany are releasing their factory orders and expectations are that we will see a big contraction on the previous months figures from 1.7% down to 0.5%. If the figure comes out at 0.5% or better then I will expect to see the Euro show some signs of strength.
The big story though is still Greece. Although starting to get very boring it will have a massive effect on Euro rates over the next month. The private sector still need to formally agree their debt swap which is meant to take place on Thursday and only once this is done can Greece agree to activate the 130 billion Euros. Then all eyes will be keen to see if they can meet the part repayment by the 20th of March. Any problem fulfilling the agreement could lead to a disorderly Greek default and potentially trigger further problems across the Euro Zone in Spain & Italy.
With an interest rate decision also looming tomorrow it will be very interesting to hear the comments that come out from super Mario the head of the ECB straight after the release. The markets will be listening very closely to his words and this can bring some of the most volatile times to GBP/EUR & USD/EUR rates. I would expect to see a range bound going forward from 1.1750/1.2050 for GBP and 1.29/1.3250 for the USD over the next couple of weeks. If you are buying or selling the Euro and you can achieve these levels or better I would capitalise. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
USD – For the US today there are a fair few data releases out from Mortgages approvals to the consumer credit change. The most important though for those with an actual exchange to make will be at 13.30 today in the form of the Nonfarm productivity. This shows the output per Hour of labor worked. Non-farm Productivity indicates the overall business health in the US, which has an influence on GDP. The level is expected to decline to 0.8% for Q4 last year.
You may have witnessed over the last few days that the USD has started to strengthen again. It has moved against the pound from 1.5950 down to 1.5709. The ongoing issues in Europe are once again benefiting the USD as the Dollar is being used as a safe haven option once again. With the Greek issue not yet sorted this trend could continue. This year the pound has been as low as around 1.5250/1.53. With sterling still trading at 5 cents higher now may be a good move to capitalise before we potentially see any further Dollar strength. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
NZD – At 8.00pm this evening the Reserve Bank of New Zealand (RBNZ) will be announcing their interest rate decision for this month. We are expecting rates to be held at 2.5% Sterling exchange rates have significantly strengthened by 10 cents in the last few weeks. Sterling spiked to above 1.94 yesterday but is today back down at 1.9240. Like in Europe straight after the rate decision the governor of the RBNZ Alan Bollard will give a speech on the state of New Zealand’s economy and what their stance is on any future policy. The markets will keep a close eye on this and there could be some volatile times during the speech. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.
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What is ahead for the pound in 2011?
I hope that you all had a good Christmas and are now gearing yourself up for the New Year.
Over the next three days there will surely be good buying opportunities. Although data is thin on the ground, no matter what currency you require we will be here to answer any questions or queries that you may have with upcoming currency transfers.
What will 2011 bring for the British pound? If the trend of the last year is anything to go by then the word volatile is an understatement. This year we saw the pound fluctuate by up to 15% against a host of the major currencies. At present sterling exchange rates are lower than they were at the turn of the year. If you have an exchange to carry out in the first quarter of 2011 you may want to consider a forward contract to give you the peace of mind on your exchange as there are numerous factors that could weigh on the pound. Some of these are highlighted below.
1) Increase in VAT may deter consumers and effect retail figures.
2) A continuation of low interest rates could deter investors from the UK.
3) Government austerity measures may kick in and have dire consequences on employment figures in the public sector.
4) The UK may have to continue bailing out EU countries that defect on loans and increase our own debt issues.
Feel free to speak with us if you would like more information on the above or are worried what these factors could have on the currency that you wish to purchase.
Swiss Franc News
We have seen the pound weaken by 12.5% against the CHF this year. In December alone the pound has weakened by a staggering 5% The Swiss franc has risen against both the dollar and the euro ever since the 2008 financial crisis, thanks to its status as a safe haven with investors.
As we look forward to 2011 I see the CHF continuing its rise against a host of majors as more EU countries default investors will continue to look to it as a flight to safety. From the 14.95% fluctuation this year we are hovering at an all time low now.
US Dollar News
The USD fell against most major currencies yesterday following weak housing and consumer confidence data. Standard and Poor’s released its Home Price data and in October as compared to the same month in 2009, it fell 0.8% when market forecasts were for a drop of just 0.1% Consumer confidence was down too and this does not paint a pretty picture for the USD. Although against sterling I predict that we will see the pound hover around the early 1.50’s coming into the New Year.
If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.
Quantitative Easing puts pressure on the USD
Last night the Federal Reserve announced that it will pump $600 billion into the US economy by the end of June next year to boost their fragile economy. The move known as quantitative easing will purchase around $75 billion of asset purchases such as bonds each month. The FED also left the base rate of interest on hold at 0.25% which means they cannot reduce rates any further in order to boost demand – the more traditional policy used by central banks to stimulate growth.
QE tends to vigorously weaken a currency when it is introduced to an economy. The dollar has weakened 11 percent versus the euro since August, when Fed Chairman Ben Bernanke said the central bank would “do all that it can” to sustain the economic recovery.
The markets were expecting $500 billion of asset purchases so when $600 billion was introduced the USD weakened to levels not seen since January against the Euro and for 9 months versus sterling exchange rates.
The coming weeks could bring some excellent buying opportunities against the USD and I would not be surprised to see levels lingering above 1.60 for the foreseeable future.
If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.
Sterling and the week ahead
Sterling exchange rates could be in for a volatile week with a host of data from Mortgage approvals to consumer confidence for the UK. Most importantly though could be the GDP figures which are out on Wednesday morning at 9.30. The GDP figures have made headline news over the last couple of years as it highlights how the UK economy is either growing or shrinking. GDP at present is hovering at 0.2% which is just above the recession level. If the UK economy does not show signs of growth then then their is always the possibility that the pound could weaken against a host of currencies so these figures out could be crucial if you have an up and coming currency transfer to make.
In the US last Friday they released their GDP figures and it showed that their economy was still growing but at a much smaller pace than was anticipated. As a result the US Dollar weakened and if the same happens for the UK then we could see sterling weakness across the board. However if the economy continues to grow and at a faster pace than anticipated then the pound could gain.
Data that may affect the pound this week.
Today German consumer price index
Tuesday 29th UK Mortgage approvals
Tuesday 29th European consumer confidence
Wednesday 30th UK consumer confidence
Wednesday 30th UK GDP
Wednesday 30th Canadian GDP
Thursday 1st UK & European PMI
Friday 2nd US Nonfarm Payroll.
If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.
