Tag Archives: weakness
Exchange rates have slipped dramatically in the last few months as investors fears over the EU Referendum increase. Just what can we expect in the coming 3 weeks ahead of this historic occasion? Well I think it is likely that exchange rates will continue to fall in the coming 3 weeks as we get nearer to the Referendum and the pound is likely to retest the lows that have already been seen this year. The market will have to take account of the possibility of the UK leaving the EU and this will need to be reflected in the price of the currency as we approach the Referendum date. The polls are going to be the main drivers on the exchange rate as we get closer to the event I expect the ranges for pound sterling exchange rates to fluctuate in the recent bands that we have become so used to.
I predict GBPEUR to trade between 1.18 (Leave) and 1.40 (Remain) whilst GBPUSD should trade between 1.33 (Leave) to 1.52 (Remain). GBPAUD will I believe perform in a range of 1.82 (Leave) – 2.12 (Remain). There is likely to be big swings in the coming weeks as we the polls suggest different outcomes. Only last week Remain were leading by 60% according to some, now Leave are in the running at 52% majority.
Making predictions based on these polls is quite frankly very dangerous. The largest polls are only ever sample a few thousand candidates which means they are simply not very representative. The reason the polls got the UK General Election so badly wrong last year was the fact the polls weren’t polling enough of society to really get a true gauge on voters intentions. With this vote being more uncertain than the General Election the scope for big unexpected swings is massive.
The best way to manage the uncertainty is to keep up to date with the latest movements and utilise some of the expertise we have at our disposal including the Limit Order. This allows you to automatically purchase currency once the exchange rate hits a level you have pre determined. A forward contract allows you to fix a level up to 18 month in advance of needing to make a payment removing the risk of future exchange rate fluctuations impacting the value of your currency purchase.
In the words of a great motivational speaker ‘the best way to predict the future is to create it’, leaving everything in the lap of the gods is not normally a sensible strategy when dealing with the currency markets. If you would like to learn more about your options and the process please contact me Jonathan Watson on firstname.lastname@example.org.
It would appear that the surprisingly bullish run for Sterling exchange rates is now slowly coming to an end, as we’re beginning to experience daily falls for GBP exchange rates against some of the other major currencies.
After ending the month of April in such a strong fashion the Pound is having quite a negative start to May, having fallen as low as 1.2628 from the GBPEUR peak of 1.2900 last month which was close to a 3 month high.
I personally believe the falling GBPEUR exchange rate is currently the most reflective of Sterling’s true value, as the Pound has actually gained against the Aussie Dollar due to the Reserve Bank of Australia’s decision to cut interest rates from 2% down to the record low of 1.75%. Similarly, cable (GBPUSD) has so far managed to hold on to it’s recent gains mostly due to USD weakness, as the markets are beginning to price in the unlikelihood of an interest rate hike anytime soon. Had it not been for the weakness in USD and AUD for the reasons previously stated, I think that we could have seen GBP fall against both so far in May.
Sterling had been boosted as the ‘Brexit’ polls indicated a strong ‘Remain’ lead around the time of US President Barack Obama’s recent trip to the UK. Barack Obama, Christine Largarde and Mark Carney have all recently lent their support to the ‘Remain’ campaign and warned the UK of the risks moving forward and this helped swing the polls in favor of a vote to remain within the Eurozone.
I feel that the positive sentiment surrounding Sterling is now beginning to wain, and with poor manufacturing data coming out of the UK yesterday (UK manufacturing activity fell in April for the first time since 2013) along with UK GDP falling in the first quarter of this year, I won’t be surprised to see Sterling fall once again in the lead up to the EU Referendum on the 23rd of June.
This morning will see the release of UK Construction Data at 9.30am which could provide some direction for GBP exchange rates which are currently flat so far. With a quiet week for financial data releases I’m expecting investor sentiment to continue to drive GBP exchange rates this week, and anyone with a GBPUSD currency requirement should be aware that Non Farm Payroll figures are out this Friday which could cause volatility around the time of its release. Feel free to get in contact if you would like to discuss this news release in further detail.
If you are planning to use GBP to buy a foreign currency, it may well be worth your time getting in contact with me (Joseph Wright) on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible, you can also call me directly on 01494 787 478.
Last night I was very pleased to be asked to appear on BBC News to discuss the ‘Brexit’ question and Sterling weakness. I was asked how I thought upcoming events would influence the pound moving forward and as regular readers will know in my opinion the future is because of this very issue not looking too rosy for the pound. At the beginning of this year I wrote here how I believed the pound would like lose value (you can read the post here) and I can offer further predictions on Sterling exchange rates here. The remaining question of course is will this continue? Well my answer is that yes I believe it will but following such a torrid day yesterday this may not manifest immediately. In fact the rest of this week could be quieter but that isn’t any reason to hold back from making plans! Thursday is an important day with the latest GDP figures for the UK, sterling is unlikely to come under renewed pressure again this week but could easily trade in the recent lower ranges against most currencies.
When should I buy Euros?
If you need to buy Euros with pounds and want a little more for your money make sure you are ready to buy by the 10th March! Many of my clients are concerned with GBPEUR movements and the one hope for Euro buyers with pounds is next month’s ECB decision on Quantitative Easing on the 10th March. If (and it is an if) the ECB embark on further QE this should weaken the Euro making it more attractive to buy Euros. Thursday this week is also important because we have Eurozone Inflation data which will give us a clearer picture on what to expect next month for the European Central Bank (ECB). Essentially worse Inflation data makes it more likely we will see more QE in March. Understanding upcoming economic events are key to making some plans on when to make your currency purchase so if you are unsure or just wish to have a chat about your requirements please speak to me Jonathan by emailing firstname.lastname@example.org
If you are selling Euros dare I ask what you are waiting for? Since November you have made 10% on your currency deal. This is normally the kind of mov
ement you may see between the high and low in a year. Current Euro to GBP rates are the best in 16 months and whilst of course they may improve further if I was selling Euros I would be very worried about next month’s ECB decision and just how this could impact my purchase. If you have Euros to sell and wish to learn some information on the best time to sell in this market, please email email@example.com
Will USD to GBP rates improve further?
This week is the release of US GDP figures which will help provide some further direction on cable prices. GBP weakness has helped drag the pair down to fresh lows touching close to a 7 year high but I cannot see it getting too much better in the short term. Thursday and Friday’s GDP data will be key to determining the next moves but I do feel much of the bad news for sterling is priced in and because of a high chance of the Federal Reserve reviewing their previous bold comments that they will raise rates again, the dollar will weaken.
I have worked a specialist foreign exchange broker for 6 years personally assisting both businesses and private clients with their foreign exchange requirements. I am a big fan of talking abut the market and am very pleased to be quoted in the press and other articles online. If you are considering a currency transaction involving the pound this is a very interesting market at present and I would be very happy to discuss with you all your options and the latest forecast for you. Please email firstname.lastname@example.org with an outline of your situation and preferably a phone number, I will respond as quickly as I can!
Sterling has another exceedingly volatile day against Euro, Dollar and all majors – Global markets remain fragile (Daniel Wright)
It has been yet another busy day on the trading floor and we have seen yet another volatile 24 hours for Sterling exchange rates.
Markets around the world appear to be exceedingly nervous at present and there is a little worry that we may have one hell of a storm brewing ahead.
In the past year we have seen issues with the European economy, issues with the Chinese economy, oil prices dropping off, bank share prices plummet and the potential of any interest rate hike for the U.K slowly but surely be kicked further and further down the road so it is no surprise that the markets are acting a little out of the ordinary.
My personal opinion is still that Sterling is a little undervalued however when you do see negative movements like we have witnessed of late then the question does start to arise of how much further can it drop before we see a recovery? We all wish we truly knew the answer to this question as we would make a great deal of money…
The key with these sort of situations if you are due to be making a large exchange is to make sure you protect your position. Many people fall into the trap of thinking that they have to carry out their currency needs in one large chunk, and to time that correctly is almost impossible, along with the fact that you leave yourself extremely exposed.
If you are in the position that you do need to buy or sell a large quantity of currency for your business or indeed for the purchase or sale of a property then it is well worth getting in touch with me (Daniel Wright) directly so that I can work together with you to try and maximise your money. I have been assisting clients in this position for nearly 10 years and I have been writing on this site for over 5 years so I am well positioned to not only help you get top commercial rates of exchange but also to ensure you have a proactive and efficient currency broker on your side at all times.
If you are stuck in a tricky position due to the latest movements and you are finding that you are stuck on your own with nowhere to turn the feel free to get in touch with me directly and I will be more than happy to call you personally. You can email me on email@example.com or call me on 01494 787 478 during U.K office hours of 08:30am – 18:00pm (please ask for Daniel Wright). You do not need to be based in the U.K for us to be able to help you.
Regular readers might by now becoming familiar with the two key events for December, that is the European Central Bank meeting this Thursday and the US Federal Reserve meeting on the 18th December. These two events carry significant weight on the markets and could easily change the current forecasts on a number of currencies. Whilst clearly not UK based events they will have a big impact on sterling exchange rates as investors move funds in and out of the Euro, USD and others, and then into and out of sterling. Let us remind ourselves what moves an exchange rate, it is the buying and selling of said currency. That demand is in the main triggered by corporate investors looking to capitalise or speculate on the currency markets, basically investing money to make money. Examples include hedge funds, pension funds and banks all seeking to invest funds to turn a profit. Understanding their attitudes to the market and their investing brains can help you too to navigate the markets and not get caught out!
The pound is one of the world’s leading currencies and in any currency portfolio will make up a reasonable share since it represents the wholly independent Bank of England and the UK is politically and economically seen as a safe bet. With the UK on a path to raising interest rates at some point in the future the UK represents a good investment opportunity and this explains some of the pounds gains this year. The outlook is therefore quite favourable for the UK and the pound but because much of this good news is priced in, we could easily see events take a turn in the future, particularly if the UK data does not live up to expectation.
If you have a transfer to consider involving the pound the next few weeks could be critical to determining what you actually receive. Understanding the market and everything going in will really help you to make an informed choice about what is the best way forward. If you have a transfer to consider and would like to receive some expert help and insight on the currency markets and all of your options please contact me Jonathan on firstname.lastname@example.org
Sterling flops following inflation drop off – Pound finishes the day down against all major currencies (Daniel Wright)
Sterling has been performing about as well as the England rugby team over the past few weeks and I am afraid that trend has continued today.
Inflation figures released this morning led to further Sterling weakness and it seems like the chances of any interest rate hike in the U.K have been pushed back even further once again.
Interest rate hikes or even the mere speculation of an interest rate hike can be very positive for a currency and the fact that this has effectively kicked the ball down the road has now led to Sterling dropping off considerably.
I am still of the opinion that this is a minor blip for Sterling exchange rates and that we may see a Sterling fight back in the near future however I would now suggest that any pending currency exchange you need to make is approached with caution and it may be sensible to look at exchanging a small chunk or even half of your requirement fairly soon to remove a little of the risk.
Tomorrow morning we have U.K unemployment figures and average earnings figures released at 09:30am. These are extremely important again for the U.K and will have further impact on what the Bank of England do next.
Expectations are for a small rise in average earnings which may give the Pound a little strength back, unemployment figures are expected to remain at 5.5% so any figure that differs from this may cause us another volatile morning of trading.
We assist with not only getting you the very best of market information but for those that are not aware we can actually save you money on the exchange rates when you come to booking out a transfer too. The company all of the writers of this site work for has won numerous awards for rates of exchange and customer service and we would love to add you to our book of over 50,000 clients.
If you were planning on using a bank or already have a currency brokerage lined up then it would be mad not to email me for a quote and to see how I can help you. You can contact me (Daniel Wright) the chief editor of this site on email@example.com with a brief description of what you are looking to do and a contact number and I will be more than happy to get in touch with you personally.