Tag Archives: usd
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
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
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
Crunch time for the UK, will recession be avoided? Exchange rate forecasts (Mike Vaughan)
As my colleagues post highlights opinion in the office is entirely divided. The majority of traders believe a 0.1% figure will be released and this in turn should lend support to sterling exchange rates as a result. I for one have predicted this and hope for a better day pushing GBP/EUR above 1.18, GBP/USD towards 1.54 and GBP/AUD pushing closer to 1.50 – a trigger point for many AUD buyers.
Of course the decision will be a close one and many of those with an interest in the money markets will be keeping a very close eye on the 09:30 release. The office has a range of predictions from 0.1% to – 0.2%. To avoid recession we need to see 0% or better, something that may give the economy a much needed boost. Of late data in the UK has been somewhat better with the only exception retail sales, but these have been affected by unseasonably poor weather, something you cannot legislate for. Today could prove incredibly volatile, should you wish to remove this uncertainty then get in touch early on 01494 787478 or email mgv@currencies.co.uk
Although UK GDP data is likely to dominate today’s trading, other data to watch out for will include the following:
US Jobless Claims at 13:30 – expecting to show a slight decrease possibly lending support to the US dollar this afternoon.
Overnight we have the interest rate decision from Japan – expected to stay on hold at 0.1% and should cause little movement for GBP/JPY but watch out for the Bank of Japans monetary statement that will follow. This will outline the policies the BofJ will have in store and could have an impact on riskier currencies such as the AUD, NZD and ZAR as the JPY is often used in conjunction with these currencies through he use of a carry trade. This is when investors borrow in a low yielding currency i.e. JPY and look for higher grossing currencies such as AUD, NZD and ZAR. It is a risky trade as the exchange rate movement can remove any gains from the higher yield offered and as a result economic sentiment from Japan could adversely affect the riskier currencies. I for one feel further opportunities will be seen for buyers of the AUD, NZD and ZAR in the coming few days and weeks.
To finish off the week watch out for annualised US GDP at 13:30 tomorrow. Expected to show a strong improvement which should drive cable rates back towards 1.51/52 to finish off the working week.
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
Sterling sees further gains against the Euro as GBP/EUR breaks above 1.18, get the best deal on your foreign exchange (Michael Vaughan)
As we head towards a much needed extended weekend break the pound is continuing its mini-recovery against the Euro moving nearly 5 cents in the last two weeks. This is bringing some unexpected respite for many and creating some good opportunities for Euro buyers. I do also feel those selling Euros should still look at the current levels as an opportunity. Taking a look back across the last two years trading the average price for GBP/EUR sits at 1.195 so you are still ahead of the game sitting at the 1.18 level and still some 7.5% better than the pre-Christmas 2012 levels.
For me this could be the start of prolonged recovery for the pound, particularly if the UK can avoid the triple dip recession. Recent data suggests it will be a close run thing but is certainly starting to look a little more optimistic for the UK with better than expected retail sales and public sector net borrowing figures from last week shining a brighter light on the UK’s slow road to recovery. I have been saying for some time how I couldn’t understand why the pound was so out of favour, particularly when compared to the Euro. For me it was inevitable that the European bubble would burst and those with an interest in the GBP/EUR pairing were possibly focusing to much on Sterling’s woes and forgetting the deep rooted problems facing the Euro zone. With Cyprus looking to agree terms to their €10bn bailout by imposing strict bank levies on deposits, this means in some cases holding up to 40% of individuals hard earned cash.
Some will argue that Cyprus has no choice, and in many ways they do not, but its sets a very dangerous precedent to the rest of Europe. Should this scenario spread to the rest of the euro zone then the knock on effects could be catastrophic and create a significant shift in investor confidence. This could cause a significant shift in GBP/EUR and EUR/USD exchange rates and you may also find a large shift from riskier currencies offering higher yields such as the AUD, NZD and ZAR. A major benefactor could be the USD and the ultimate loser the Euro. We are some way from this situation but I certainly feel opportunities will arise for those looking to buy Euros. Should you be selling however I would start to get a little concerned with the current trend and you may wish to explore your options.
When buying foreign currency it is important to give yourself the best opportunity to maximise your conversion. By using the services of a specialist foreign exchange brokerage this will give you the ability to take control of your currency requirement. This can be done through utilising one of the many contracts we have available such as spot/forward contracts and stop/loss or Limit orders. We will also aim to contact our clients as soon as a particular target rate has been achieved through our market rate alert service. To discuss the service we provide in full or to have me contact when a particular rate becomes available then please contact me at mgv@currencies.co.uk giving a brief description of your particular requirement and target rates in mind and I will be sure to alert you if this price becomes available.
To discuss the full currency service please contact 01494 787478 or email mgv@currencies.co.uk
Is the recovery around the corner for GBP? (Ben Amrany)
So with the pound nicely rising against a basket of currencies we learnt yesterday that the governor of the Bank of England Sir Mervyn King felt that recovery for the UK economy is with in sight and that the weakening of the pound has gone low enough.
King who himself has recently talked the pound down has made a U turn and stated that he thinks “we are moving to a properly valued exchange rate. I think we’re probably there” This assisted sterling to rise over 1% against the USD, 0.72% against the Euro and we witnessed gains against the southern hemisphere currencies. If you would like to capitalise on these gains then please feel free to contact me at bma@currencies.co.uk and I can explain the options that are available to you.
You could be reading this article thinking that King’s comments could pave the way for the pound to start to claw back the average loss of 6% across the board this year. Playing devils advocate if the governor may think that an average of 1.15 against the Euro and 1.50 against the USD is the right level for the currency pairs then surely this gives the bank scope to try and devalue the pound as soon as it starts to strengthen!! For this reason I would not get too excited.
At present many of the central banks around the world are happy for their currency to remain weak as it will help their exports. I tend to call this a currency war. With political, economic and credit rating issues in the UK the pound has weakened all by itself with out the Bank of England having to re stimulate the economy with more quantitative easing (QE).
If the pound is able to gain further by the end of the month I would seriously consider securing your currency even if you do not require the funds immediately. We have different contract options like forward buying which can help you minimise your risk to volatile exchange rate fluctuations should you not have full funds available at present. This can give you the peace of mind that your funds will not weaken any more. If you would like information on this or any other contract that we offer then please do contact me with your contact details and I will explain all the options that are available to you.
If you have any specific target levels that you would like to be informed about for any of the major currencies then email me at bma@currencies.co.uk
Thank you for reading
Ben Amrany
GBPEUR rates SPIKING – Best time to buy in 4 weeks (Steve Eakins)
Over the last few days rates have pushed up for GBPEUR exchange rates, it has been two consecutive big days of gains that present the quick moving clients with an opportunity to buy at a 4 week high. In monetary forms this equates to a saving of £2,600 on a €200,000 in less than 36 hours.
What is the reason for the rally?
Yesterday we saw gains following the news that the UK economy could have avoided a recession which had been priced into the market. This resulted in a rally of nearly 1 cent on the day. Today the market has gained nearly another cent following comments from Mervyn King the current head of the Bank of England when he said “There Is Momentum Behind Recovery That Is Coming.”
Will it last long?
Probably not, these knee jerk reactions don’t normally last long so if you have funds available and need to buy within the next few weeks I would see current levels as an opportunity to buy. I personally don’t believe his comments long term as you only have to look at recent data from the UK to see there is no real recovery. It may be he is talking about a recovery coming this year but I certainly cannot see one within the next few months.
How do I get notified of these spikes?
Well timing trades can save thousands on an exchange. Using a pro-active currency broker will help as they will notify you of these spikes so you can take advantage. Contact me directly if this service is of any interest, Steve Eakins, at hse@currencies.co.uk
Why would I use a broker?
Here I work for a company called Foreign Currency Direct, and comparisons have shown that we can save clients as much as 3% – 6% on currency transfers when compared to rival brokers and the high street banks. Simply put, if we could not save you money we would not be in business. We are an FSA regulated company and have been highlighted as the “Best Exchange Rate Provider” with the “Best Exchange Rates” in Britain by The Sunday Times for three consecutive years and more recently by the Telegraph.
For more information along with possible strategy options on when to trade now and in the future contact me through hse@currencies.co.uk or 01494-787 478
Why is the Pound still getting weaker? Here is my take on what may be happening – Sterling drops again against EUR, USD, AUD, NZD,CAD,ZAR,CHF and all majors (Daniel Wright)
The Pound has once again had a pretty dire week after a fairly positive end to last weeks trading.
Strangely we had some very positive data out yesterday as the CBI (Confederation of British Industry) announced that they feel that the U.K may avoid a triple dip recession when the GDP figures for the first quarter of 2013 are released in April. Usually this would bring a little strength to the Pound but still Sterling continues to suffer.
Today Governor of the Bank of England Mervyn King spoke at 10:30am – He kept up to his usual pattern and by 11:00am the Pound had dropped dramatically against most major currencies, personally I feel there is a game plan behind all of this and that the BOE and U.K Government are aiming to keep the value of the Pound low throughout this quarter.
If the Pound remains low then exports of goods and services from the U.K should increase, this increase may be the key to make us just avoid a triple dip recession which is what I personally see as the main aim at present. Should the U.K drop into the triple dip territory then the risk of a credit rating downgrade may increase which may make it more costly for the U.K to borrow and could put us into further trouble.
Once (assuming we do) we have avoided the triple dip recession then it gives the BOE and Government another 6 months to play with where they can concentrate a little more on inflation and various other targets not being met, we may even see a small hike in interest rates after April which should lead to a little Sterling strength.
I am afraid though if you are looking for a stronger Pound and your business has a pending currency transfer to make, you are in the process of buying a property overseas or you just sent wages out to another country you may be in for a rocky ride for a few months. Of course I may be completely wrong and the markets are so volatile at present that even a sniff of the Euro zone crisis coming back to a head and things may change completely – That is the beauty (or problem with) the currency markets.
One thing you do need to make sure of if you are in the position where you need to buy or sell any amount of currency involving a bank to bank transfer then you should have a proactive currency broker on your side who can be your eyes and indeed ears on the market. I personally welcome any new clients and treat every transfer the same whether it is £1000 or £5,000,000 as I completely understand that everyone’s need is different and to some people every little counts, so I aim to make everyone a saving over their bank or indeed current broker.
Feel free to contact me directly for a live quote or even for a brief discussion surrounding your requirements. You can email me on djw@currencies.co.uk please note we only deal with bank to bank transfers and no cash or speculation. Please also remember to leave a contact number and time to call when sending me an email.
I look forward to speaking with you.
Sterling spikes against the Euro and USD. Where next for the pound? (Ben Amrany)
Since the BoE interest rate decision yesterday we have seen the pound start to rally against a host of majors. The pound has now gained 2.6% against the Euro and 1.2% against the USD bring some relief to sterling sellers. The pound is however still considerably lower though than were we were at the turn of the year and the pound still has a long way to go before recovering the losses.
Main reason for the pounds strength has to be contributed to comments from the new BoE Governor Mark Carney who will be taking up his post in the summer. He was stating that the MPC need to start exiting unconventional policy like QE. This led the markets to think that QE may be coming to the end of its course but if the UK economy does continue to contract then QE could very well continue to be used to help growth.
After Carneys comments the ECB had their rate decision and the comments after have really hindered the Euro. The president Mario Draghi stated that exchange rate is important for growth and price stability. We feel that while the central bank is not overly worried about the exchange rate at present the markets interpreted the comments that a strong Euro could harm their exports. Hence why we saw the Euro lose aground against most majors over the last couple of days.
Looking forward the pound is in the middle of a see-saw effect. In other words the pound could go in either direction depending on how future data releases come out next week. Previously I have said that the pound would weaken this year which has come to fruition so far. Yesterday’s slightly better than anticipated GDP has made me re-think that the pound could have potentially bottomed out and we may see sterling start to rise back towards the 1.20 level. Nothing is set in stone though so be cautious.
If you are selling the Euro to buy the pound then you may want to re-think your target levels. Rates are still much better than the last year so you can still capitalise on the favourable levels. If you would like some assistance with your conversion to help you maximise your exchange please feel free to email me with your contact details and I will explain all the options that are available to you. Plus you could save up to 4% on your exchange over the banks. Feel free to send me your enquiry at bma@currencies.co.uk
Thank you for reading.
Ben Amrany
