Tag Archives: weakness

3 weeks to the Referendum!

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 jmw@currencies.co.uk.

 

 

Is Sterling’s rebound coming to an end? (Joseph Wright)

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 jxw@currencies.co.uk 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.

So what is next for the pound and how do our forecasts usually pan out?

Well this website is about predictions so I thought following my appearance on BBC News 24 last month we would see where rates are now compared to then. Essentially I made predictions that GBPEUR might rise over 1.30 on March 10th which you can read here. My predictions on the GBPUSD rate were that the USD would weaken as investors expectations of the rate hike in the US cooled, this is exactly what the Fed stated last week scaling back predictions from four to two this year.

The pound to euro rate recently hit an 18 month low presenting the best time in that period to buy pounds with Euros. Markets are keenly awaiting an increase in the value of sterling but this is unlikely to manifest until we get some further news on the Referendum. This is the main event but I don’t believe it will be anywhere as near bad for the UK and the pound as many predict. There will be of course plenty of uncertainty in the run up to the Referendum but I really do expect the negative reaction on a Brexit to lead to an economic boost as UK businesses become more competitive in overseas markets. As I said in my BBC interview UK businesses will not just shut up shop overnight and stop needing goods from overseas and nor will the overseas suppliers and customers they deal with.

To discuss further any potential transfer you have involving the pound I would be very pleased to hear from you. Please email me on jmw@currencies.co.uk with a brief overview of your position and any information you are looking for.

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ECB President, Mario Draghi Halts the Chance of a Rally for the Pound (Daniel Johnson)

It was a volatile time for Sterling last week. Predominantly due to the European Central Bank’s (ECB) interest rate decision on Thursday.  Mario Draghi announced there would be an increase in Quantitative Easing from €60bn-€80bn and also dropped key interest rates. I would have expected a bigger reaction on GBP/EUR, but we only saw it break the 1.30 mark briefly. Draghi adopted a fairly bullish stance after the announcement and stated there would be no further cuts. GBP/EUR dropped heavily, I was surprised to see the market move more on a bankers word than the facts that interest rates had been cut and there was further QE to be implemented.

I think the QE announcement was the one shot for the Pound to make a significant rally against the Euro until after the EU referendum. I think current buoyancy levels will remain on GBP/EUR. If you are Euro buyer I would be looking to move on a small spike, possibly high 1.29s. I do not think it will get any better. Keep a close eye on the Budget on Wednesday, I think Osbourne has some quite severe cuts in mind which could weaken the the Pound further. It could be wise to move ahead of this announcement.

We have the Bank of England Interest Rate decision on Thursday at 12pm. It is dubbed “Super Thursday”, but I doubt there will be anything “super” about it. I would expect rates to remain the same and the Monetary Policy Committee to keep the vote at 9-0 against a rate cut.

Although I have focused heavily on GBP/EUR in this blog, I also trade a significant amount of USD and AUD. If you would like a detailed, forecast of where I think other currency pairings are headed please do not hesitate to get in touch. I will look at your trade individually and devise a strategy to suit your individual needs.  I am in a position where I can guarantee to beat any competitors rates, thank you for reading my blog and feel free to get in touch at dcj@currencies.co.uk  or call me on 01494 787 478 and ask for Daniel Johnson.

 

 

Latest media coverage from our writers! What next for the pound?

bbcnew3Last 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 jmw@currencies.co.uk

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 jmw@currencies.co.uk

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 jmw@currencies.co.uk with an outline of your situation and preferably a phone number, I will respond as quickly as I can!

When is the best time to Transfer your Currency? (Daniel Johnson)

Sterling is looking very weak at present having fallen in value against all major currency pairings. The pound is suffering due to a series of poor data releases. There has been poor manufacturing, industrial and retail figures of late, not to mention the shocking trade deficit data. The main factor in Sterling’s weakness however is the EU referendum. Current FT polls show 44% of the UK population wish to remain in the EU, 41% wish to leave and 15% remain undecided. It is an extremely tight call, which will have major bearings on the UK economy. Personally I feel it would be madness to leave, it would strain trade relationships with those in the EU and hit our already dwindling exports hard. If we were to leave I would not be surprised to see Sterling fall significantly against a host of currency pairings.

I think we will remain in the EU, Cameron has simply been posturing in order to get what he wants, fingers crossed his reliance on a sensible vote from the UK population is not misplaced. Until the EU referendum is concluded I do not think there is much hope of significant Sterling gains.

GBP/EUR

When should I buy Euros?

If you are a Euro buyer and you have to move short term it may be wise to move sooner rather than later, As mentioned above I don’t think we will see any big swings in Sterling favor until after the EU referendum unless Draghi implements further QE. (see below)

When should I sell Euros?

Euro Sellers, Despite the current situation looking very rosy for the Euro at present, Mario Draghi the head of the European Central Bank has indicated he is willing to to increase monthly increments in the Quantitative Easing (QE) program as early as March. QE is essentially pumping money into an economy in order to stimulate growth. The last time this occurred Sterling rose in value upward of five cents.

GBP/USD

Janet Yellen the Head of the Federal Reserve had previously stated there could be several rate hikes in 2016. She has however recently said that this is now unlikely due to global economic uncertainty. GBP/USD is very difficult to predict at present. Sterling’s weakness is obviously justified at present due to the factors listed above, but on the US side you have to take into account the Presidential election. During times of political  uncertainty the currency in question generally weakens. Although I think we will have to get much closer to election time to see it have a significant affect. With the possibility of the EU referendum taking place possibly as early as June and the US election due in November we could well see a Sterling rally.

Moving short term however is a tricky task, for both Sterling and Greenback buyers I would suggest trying to time your trade on a Spike to maximise your trade. this is indeed a very difficult skill and I would advise getting in touch with a Broker can keep their eyes and ears ion the market for you.

GBP/AUD

GBP/AUD yesterday fell through the 2.00 resistance barrier, although I can’t see much further gains for the Aussie. I feel it is over valued. It has rallied due to a recent speech by Reserve Bank of Australia governor Glenn Stevens. Stevens had a bullish tone, stating there has been an increase in house building and consumer spending quelling fears of a drop in interest rates. However, I think a rate drop could still be on the cards, China could well change monetary policy in order to try and stimulate their current dwindling growth levels in which case the Australians could well to follow suit.

When should I buy Australian Dollars?

I think we will see some Sterling strength in the short to medium term, however I would set a realistic target rate. I do not think we will be seeing 2.06 + any time soon.

When should I sell Australian Dollars?

With the GBP/AUD exchange rate currently sitting at 1.99, Australian Dollar sellers are at some of the best trading levels in the last six months. It was not long ago the GBP/AUD rate sat above 2.20, a gain of 20 cents is definitely not to be sniffed at. A trade for AUD 100,000 between now and the is more than £4000 difference.You could hang on for the chance of small gains at the risk the procrastination could prove costly.

If you have a currency requirement I will be more than happy to assist. I will look at your trade individually and not only guarantee the best rates of exchange against any competitor but also time your trade to maximize your return. We have various contact options which I can talk you through to help-your individual needs. I specialise in Commercial and Property transfers so pleased o get in touch if I can be of assistance. You can contact me at  dcj@currencies.co.uk. Thank you for reading my blog it is appreciated and I look forward to hearing from you.

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 djw@currencies.co.uk 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.

What will move your rate this December?

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 jmw@currencies.co.uk

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 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 get in touch with you personally.

Next week is a very busy week for sterling exchange rates!

If you need to buy or sell the pound and are looking for a bit more for you money then next week could offer up some opportunities with plenty of economic data to move the market. With pound sterling exchange rates having taken a noted diversion south from previous high expectations, investors are keenly awaiting the next round of economic data to identify the next trend lines. To summarise I believe sterling is likely to fall on Tuesday before making a recovery on Wednesday and then falling again on Friday, let me explain why!

The Pound next week

Tuesday’s Inflation data will I believe cause the pound to fall owing to lower Oil prices and other factors having negatively impacted the Inflation numbers. Sterling is quite susceptible to these numbers since it is a key determinant in when the Bank of England will raise interest rates. Wednesday is UK Unemployment data which I believe will help the pound to rise as this data has been one of the most encouraging aspects of the UK economy in the last couple of years. Moving to Friday there is some very important Eurozone economic data which will I believe lead to Euro strength weakening the pound in the process.

Summary

The pound remains at elevated levels as investors still hold hope of a UK interest rate rise in the future yet this prospect has diminished greatly in the last few weeks. Further falls seem likely but there will be spikes to take advantage of! If you are looking to buy or sell the pound and have a particular target level in mind please let me know by emailing jmw@currencies.co.uk, I can then monitor the market and provide information on how to achieve your rate.

The Euro next week

The important Eurozone news is Wednesday with Industrial and Manufacturing data. The corresponding data from Germany on Wednesday this week actually caused the Euro to weaken since it showed a surprise fall in the amount of activity in this ever so important aspect of the German economy. Fast forward to Friday next week and we have the very important Eurozone Inflation data which I believe could be positive for the Euro as it shows an improvement in the Eurozone economy and helps the Euro to strengthen.

Summary

The Euro’s period of consolidation has levelled off in the last week or so as fresh concerns over the Eurozone economy come back into focus. The reports have quite frankly been rather mixed from Europe and the GBPEUR and EURUSD rates have mainly been driven by goings on in the UK and the States. With the Federal Reserve appearing to have stepped back plans to raise interest rates, the USD has been sold off which has favoured the Euro. All in all I think if you need to sell Euros for sterling taking advantage of the current spike is worthwhile. To get the latest updates on the Euro to sterling exchange rate and receive important information on the market please contact me Jonathan on jmw@currencies.co.uk.

The USD next week

The most important economic data next week for the USD focuses on Inflation data towards the end of the week. I believe the main driver on the dollar will continue to be the prospect of when they will raise interest rates and this could easily slip into next year if Inflation is not an issue in the US. Movements on the USD are important because they will impact movements on the Euro and sterling, understanding what is happening here could help you to make a decision on your currency pairing.

The AUD, NZD and CAD next week!

These currencies remain susceptible to the recent trends in commodity currencies which has lately been positive. With Oil rising in value and the Federal Reserve holding off their plans to raise interest rates these currencies are enjoying a spike. I believe they could surge even further against the pound depending on next weeks data, here are some of the key points to look out for!

AUD – I think Thursday’s Unemployment data is the big one to watch and some reports suggest this could be a negative one! With the Australian economy coming under lots of pressure jobs are suffering and this could present some opportunities.

NZD – There isn’t too much important data next week for the Kiwi but I expect sentiments over the raising of the Federal Reserve Interest rate to affect attitudes towards the currency.

CAD – The rising oil price is a big factor in the market and we have already seen that causing the CAD to strengthen. Next week we have the Bank of Canada Governor Poloz speaking which may well lead to some spikes on the CAD as he seems likely to be impressed by the recent upturn following the improvements in the Oil price. I think therefore if you need to buy CAD then moving sooner rather than later is going to be the best idea.

Understanding all the important factors driving your exchange rate is key to getting the best deal and whilst I cannot tell you exactly what will happen I am confident I can offer something useful. For more information on all the events driving your exchange rate which may lead to improvements please email me Jonathan on jmw@currencies.co.uk

I am very confident I can help with a better exchange rate than the banks and some insight into the market to help you make an informed decision.

Thank you,

Jonathan