Tag Archives: weakness
For those looking to buy or sell Canadian Dollars I read an interesting report surrounding Canada this morning.
Nouriel Roubini (or Dr Doom as he is known) the man that predicted the big financial market crash before it happened has recently commented that he feels that the Canadian Dollar still needs to weaken by 10% to maintain the Manufacturing sector for the North American Country, this could be achieved by some aggressive easing measures in the near future.
of course whether we actually see something like this happen is actually completely in the hands of the Bank of Canada and not this widely respected economist, however due to the fact that the markets do move on speculation as well as fact this could mean that the Canadian Dollar may be in for a rocky couple of weeks.
At present the GBP-CAD rate is already almost 30 cents better than it had been a year or so ago so those looking to buy Canadian Dollars must already have a smile on their faces – there is a chance that they may even get a little more for their money in the coming weeks.
If you are looking to buy or sell Canadian Dollars in the coming days, weeks or indeed months then it is prudent to have an efficient and proactive currency broker on your side and I can help you with this personally.
The brokerage I work for has won numerous awards both for our exchange rates and customer service so I would be confident I could better any deal you currently receive from your bank or currency broker, feel free to contact me (Daniel Wright) directly by email on firstname.lastname@example.org and I will be more than happy to help you personally.
Currently sterling is well supported largely due to the strong likelihood of the UK raising interest rates next year. Investors are taking up positions on sterling in anticipation of better returns in the future. 80% of currency transactions are speculative and whilst this is not a topic we deal in for clients , it is a topic that is extremely relevant in determining future market movements for our clients.
Longer term sterling appears bound to increase significantly as the prospect of ultra low interest rates becomes the past. The pound has been flirting with 5 year highs on a trade weighted basis which when you consider interest rates have been at rock bottom for 5 years makes sense.
Since we won’t actually see any actual hike for some time there is certainly a good chance of more GBP weakness but it will be in pockets and not reflective of a greater downward trend. If you are going to need to purchase the pound in the future moving sooner is I believe the best course of action. Please contact me directly for assistance in sourcing the best rates and the optimum peaks to trade on. I assure you of being able to beat the banks and currency brokerages.
Many of my clients selling say Euros and Dollars after a property sale are quibbling over the fact they are trading at multi year lows. I wholly sympathise with these clients because when you do the calculation on the losses selling six figure sums in the last year they are substantial. But if you look further back say at the 10 year and 5 year figures you will see current rates are not so bad.
Take Mr Smith in France for example, who may have purchased there when rates were say 1.50. Imagine buying a 200,000 Euro property at 1.50. This would have cost you 133333.33 GBP. Fast forward ten years and unfortunately he has had to sell to come back to the UK and had to take a hit on the price. He had to sell for 175,000 Euros and was not happy at having lost 25,000 on the price. However he managed to get 1.20 on the rate which means his 175,000 Euros are actually worth 145833.33 GBP. Suddenly it is not such a bad deal and when he considers all the fun times he had there, the whole experience has actually not been too bad!
This just shows the importance of exchange rates when considering overseas transactions. Sterling is at a very good level now which may yet improve. Understanding what is driving exchange rates is critical to getting the best deal. For more information on the forecast for your particular situation please don’t hesitate to contact me directly on email@example.com
Mark Carney and the Bank of England have raised UK growth forecasts helping sterling to gain against a number of currencies. At the same time they have underlined interest rates will be on hold for a long period of time which limits just how much higher we can expect sterling to rise in the coming weeks and months.
If you have a sterling transfer to consider in the coming weeks and months making some plans now at these levels may be a sensible move.
In other news the new Federal Reserve Chairmen Janet Yellen underlined Quantitative Easing in the US is likely to continue until there are significant improvements in the jobs market. And overnight Chinese economic data was much stronger than expected presenting what I believe is a very good opportunity for anyone selling Australian dollars or South African Rand to buy GBP.
I am available to assist in the planning and execution of any international money transfers you need to make (including bringing funds back to the UK or Europe). Unfortunately no one can tell you exactly what will happen on exchange rates but having won awards for our service and rates, we are extremely well placed to offer expertise in managing your currency exposure.
For a breakdown of strategies and options on your particular exchange please call me Jonathan in UK office hours on 01494 787 478 or if you prefer email a quick outline of your position to firstname.lastname@example.org
Next Wednesday is a key date for anyone with an interest in sterling. The Bank of England will announce its QIR or Quarterly Inflation Report which will provide insight into just how the pound will perform for the next few sessions. Whether you are buying or selling sterling this release is likely to create some movement on the markets which will alter the value of your currency purchase.
I am of the opinion some sterling weakness is likely and it is for a reason I have been highlighting for much of 2014. That is the gulf between what the Bank of England is saying about interest rates and what the market has priced in.
80% of currency transactions are speculative. The reason we see movement on exchange rates is indicative of what the market thinks or feels may happen. Since Mark Carney took office the pound has performed very well as the UK economy has improved. By tying Unemployment to the raising of interest rates focus has been very much on a UK interest rate hike. And perfectly legitimately the market has over bought sterling in anticipation of UK interest rates being raised sooner. If you look at the language of Mark Carney and the Bank of England however any possible rate hike is much further ahead than the market speculators are guessing.
Therefore I think despite the improvements in the UK economy warranting increased confidence, these high expectations surrounding sterling may now be misplaced and the risk to the downside has increased. Tomorrow we have some Industrial and Manufacturing data which last month caused sterling to weaken. We also have Trade Balance data tomorrow which we know is one of the major negatives surrounding sterling and the UK economy.
The outlook therefore for sterling has changed and just like the market has been subtly amending its positions anyone considering an international money transfer involving sterling too, should take note.
We are specialist currency brokers who offer market insight and commentary alongside award winning exchange rates. if you have a transaction to consider, small differences in your rate can make a huge impact on the amount of currency you receive.
For further information please contact the author directly on email@example.com or call 01494 787 478 and ask to speak with Jonathan.
‘Be greedy when others are fearful and be fearful when others are greedy’ is a famous quote by the legendary investor Warren Buffett. Markets often don’t go the way everyone expects and initial reactions can exaggerate the true value of a situation. I think this is very true with the current bets on UK Interest rates being raised and anyone expecting exchange rates to just keep climbing may end up very disappointed.
Tomorrow we have the Bank of England (BoE) Governor Mark Carney speaking at the Davos summit which could well be a market mover. To be clear the policy of forward guidance has indicated the bank will consider an interest rate hike if the Unemployment rate falls below 7%. This does not mean that they will actually do so and therefore the current bets that the UK will be raising rates soon as a result of the improvements in the Labour market may be wide of the mark.
Yes of course interest rates must be raised but it may not be for some time yet. It could easily be another year or two and in that time the pound could be very susceptible to shocks and dip lower. The longer term forecast would be sterling strength as the economy is clearly on the right trajectory. However markets do not follow set paths and with rates so good at the moment it would be foolish to gamble that they will keep climbing and be available in the coming weeks and months.
I feel some kind of correction is due for the pound and that could happen as soon as tomorrow once Mark Carney makes clear why interest rates have to be on hold despite improvements in the jobs market.
If you need to buy or sell sterling the current market is at a very important level. With multi year highs against a range of currencies we are at a key crossroads on many different currency pairings. For a quick overview of your situation please contact me on firstname.lastname@example.org or call 01494 787 478 and ask to speak with me Jonathan.
A good retail number for the UK may help the pound strengthen tomorrow but pressure will be on sterling throughout today. (Ben Amrany)
Data is thin on the ground today in the UK but there are still key releases that can have an impact on buying Euros and US Dollars. This morning we have already seen inflation data out of Germany which showed no change and was as expected. At 10 am we have the same release but for the whole of the Euro zone. This could easily cause more volatility and we have already seen GBP/EUR dip below 1.20.
It seems that every time the pound tries and cement itself above 1.20 something occurs and pushes it sightly lower. What may dent the pounds rise is the ECB monthly report. This may give an insight into future policy by the ECB and if they talk up the Euro like they have in the past it may cause the Euro to strengthen further. My recommendation is that while the pound is over 1.20 capitalise on buying your currency before the decline may start.
Over in the US this afternoon they release all of their inflation figures followed by a speech by the FED chairman Ben Bernanke This could lead to a volatile end to the days trading as it may give an insight into future fiscal policies by the central bank.
Going forward while the USD is above the 1.60 level it is still attractive to but. If the FED step up their Tapering then we would expect the Dollar to strengthen significantly. All food for thought and the next 2-3 months will be an interesting one on the market.
For the pound in general tomorrow we are eagerly awaiting the key retail figures from the busy Christmas period. We are expecting a good number after many retailers stated that they had a good Christmas. YOY we are expecting the number to have risen by 0.6% up to 2.6% and any number above this may assist sterling strengthening.
If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at email@example.com
The pound has fallen slightly against most currencies following yesterday’s inflation data. Essentially lower inflation reduces the need for an interest rate hike which has been and I expect will continue to be the main driver for the pound this year. I wrote about the impact of market expectations and the bank’s own predictions on interest rates recently on this blog, you can read my post here.
The pound has also been under pressure following some not as good as expected data releases for Manufacturing, Industrial Production and the Services sector. Against the Euro the pound is down 1.1% currently from last week. This is presenting a good opportunity which may not last as there is good news for the pound expected on Friday with Retail Sales data released. Many Retailers have been reporting strong figures (bar the big supermarkets) and I would expect a pick-up in the sector to aid the pound.
We could therefore be looking at a good opportunity to sell euros to buy sterling currently. We could also be looking at a good opportunity to sell Australian dollars, Canadian dollars, New Zealand Dollars and US dollars too. The pound is slightly weaker from the highs of last week but this is not expected to last too long.
The overall picture of sterling strength I do feel remains, here are the rate predictions I made for the early part of 2014.
If you have an upcoming currency requirement and would like to learn more about what to expect and get a better exchange rate please contact me on firstname.lastname@example.org or call (+44) 01494 787 478 and ask to speak with me Jonathan.