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The Election and the impact it may have on the Pound
Well if the polls are anything to go by we are in for a real roller coaster ride in the next 24 hours as the U.K head into voting stations in what may be the closest election in decades.
With political certainty being one of the key factors that have an effect on the value of a currency, Sterling may struggle until we have cemented not only who will be running the U.K but also how they plan to approach their reign.
One of the best ways of putting it is that if you were due to invest in a business (i.e the U.K/Pound) then it is highly unlikely you would take the plunge until you actually knew who would be running that business and how they planned to run it. Until we have some clear results from this election then we are in exactly that position, therefore demand in the Pound slows and Sterling’s value could more than likely drop.
I thought it may be prudent to outline the possibilities that may arise in the coming days, weeks or even months and how they could impact on the value of the Pound.
First and foremost, it does look like there is now a slim chance of any party achieving a majority. A majority would be where they can set up Government solely without the need for seeking out other parties to join together with to form what is known as a coalition.
In the unlikely event that we do see a majority for the Conservatives then I would not be surprised to see Sterling gain a lot of strength as it would show certainty and also with the economy currently performing fairly well, should be taken kindly by the markets. A Labour majority may not be so positive for Sterling initially as we may see quite a lot of change on the horizon for the U.K therefore investors may hold back to wait and see what changes may be made.
It is fairly likely that once results are announced we may see what is known as a hung Parliament. This is basically where no single political party wins a majority in the House of Commons and this is where things can really start to get interesting.
Essentially, there are usually 12 days allowed for incumbent Government (current holder of political office) to attempt to form a coalition. This may be trickier than before as the current party involved in the coalition (Lib Dems) has seemingly lost a large amount of support after not keeping to key points of their manifesto during 2010.
During this period I expect large volatility for the Pound and a limit order/stop loss contract may be a prudent approach. This is where you can set a particular level you wish to achieve or a lower limit you do not want to buy below and either may be secured automatically for you should the market price become available. Feel free to email me (Daniel Wright) on email@example.com or call our trading floor line on 01494 787478 for more information.
After 12 days (although it did take 13 last time around) if the Conservatives have failed to put together a coalition then the largest opposition party may be asked to put together a coalition. This has every potential to end up being the Labour party attempting to put something together with the SNP (Scottish National Party).
Should this be the case then I feel Sterling may really suffer as the SNP have already commented that they would like to have another referendum on Scottish independence and I would be highly surprised that they would agree to anything without the potential of this taking place. When we had the vote for Scottish independence last year and the chance of a yes vote heightened, Sterling dropped off by over 4% in a few days so with the potential of this looming, even sometime in the future the Pound will more than likely suffer.
In the event that no party can put together a coalition then we may have a situation of ‘no overall control’ which was seen a number of times in the twentieth century. This would make life hard for the Pound and would lead to a second election later in the year and again may lead to a tricky period for the U.K and indeed the Pound for a number of months.
All in all if you are looking to buy or sell foreign currency in the coming days, weeks or months then it is extremely important that you make your account manager here at currencies.co.uk fully aware. If you are working to a particular budget then our contract options may be a sensible approach, you can book an exchange rate for anything up to a year in advance for just a small deposit, helping you to budget well in advance for the year ahead. If you would like any assistance or one of our friendly traders to explain the various options available to you then either email me on firstname.lastname@example.org or call us directly on 01494 787 478.
As you more than likely will have heard the markets are a little volatile to say the least at present with major thanks to American politics as the Government began their first partial shutdown over there since 1987 early on Tuesday morning.
This has led to the Dollar losing ground against most major currencies in the early part of this week.
The situation over in the States really is a strange one and personally I am somewhat surprised that the USD has lost so much ground of late. With the media hype around all of this the Dollar has far from been strong.
Next on the agenda is the debt ceiling issue and whether or not America will officially default on their debt.
We have had the debt ceiling issue come up on a couple of occasions and what has happened in the past is we have seen it all get really hyped up until the deadline and then they resolve it – I did also think this may happen with the recent Government issue but be warned they did surprise us!
Personally I feel the Government and debt ceiling issues will be resolved in the coming weeks and the focus will move back to the potential tapering of QE (Quantitative Easing) which should hopefully strengthen the Dollar in your favour again.
Tapering may be likely before the end of this year and that in my opinion should be the trigger to kick start the Dollar again so if you have a little time to wait and you are looking to sell Dollars it could be worth holding tight for a little while longer but do be warned, the markets will do whatever they can to prove the majority wrong!
If you have the need to exchange currency involving any of the majors and you would like access to our award winning rates of exchange and service then feel free to contact me directly by emailing email@example.com
Pound exchange rate update – What has happened against EUR, USD, AUD, NZD and the CAD? (Daniel Wright)
The Pound has made a minor gain against the Euro in trading today with minimal economic data out once again.
We have GDP data out for the U.K tomorrow however it is purely a revision and possibly the most interesting release left this week for Europe will be head of the European Central Bank Mario Draghi speaking on Friday morning.
Those with an interest in buying or selling the Euro should be careful of farm subsidy which is due imminently. This release is basically the European Union’s payment of the U.K’s annual farm subsidy rebate. This is estimated to be between 2.5 Billion – 4 Billion Euro into Pounds so could lead to a sudden exchange rate shift without any warning.
Sterling – Dollar
This pairing really doesn’t appear to know which way to head next and today we have seen the pound just about come out on top. My personal view is that the Dollar will fight back with a vengance at some point soon once tapering comes into play but again we could be waiting quite a while if the States do decide to drag this talking point out.
The debt ceiling from the States is another talking point and I would expect we will get this subject becoming more and more of a talking point in the coming weeks.
Sterling – Australian Dollar
The worry on the U.S debt ceiling and discussions on tapering are continuing to hold back the Australian Dollar leaving buying levels for those looking to exchange Pounds into Australian Dollars fairly good (well at least compared to a few months back!)
I think the pairing will remain fairly range bound for the rest of the week but I certainly would not rule out the GBP- AUD creeping up to 1.75 in the coming weeks.
Sterling – New Zealand Dollar
The Pound made some fairly good gains against the New Zealand Dollar overnight following fairly poor Trade balance figures from New Zealand overnight and Fonterra (The huge milk exporter) reporting poor figures.
Figures from Fonterra are extremely important for the New Zealand Dollar as it is a company that makes a major contribution to their exports so a big drop in earnings is not good for the economy in New Zealand.
I still feel this pairing will remain rangebound in the short term but for anyone buying NZD I would jump at the chance of 2+ and anyone selling NZD should look for anything below 1.90.
Sterling – Canadian Dollar
This pair is trading at a multi year high at present so iuf you are looking to buy Canadian Dollars it may be prudent to look at taking advantage with part of your funds.
Canadian Retail Sales were fairly strong yesterday but that did not give the CAD any assistance.
If you have a currency transaction to carry out involving buying or selling the Pound and you want to get the very best exchange rates along with an exceedingly sharp service then please feel fee to get in touch with us directly by filling in the enquiry form on the right hand side of this page or email in directly on firstname.lastname@example.org with a brief description of your requirements and we will get back to you.
Pound sterling exchange rates to rise again this week? What may happen to Pound Sterling exchange rates this week? (Daniel Wright)
After having a great week last week for those looking to buy foreign currency with Sterling now we have the classic question of will the Pound kick on from this and make further gains or will we see something come out of the blue and knock Sterling right back down again?
Personally, this time around and for the first time in a long time I cannot see anything standing in the way of Sterling and I feel unless we have any major shocks or surprises arrive then the Pound could well have another great week against most majors.
There is a bit of a feel good factor surrounding the U.K at present and the economic data we have seen of late has been a great contribution to that. Unemployment and inflation data wasn’t bad, house prices are seemingly flying up along with the number of buyers, QE (Quantitative Easing) seems to be quite a way away from coming back into use and retail sales were excellent.
Somewhere somehow people are spending a lot of money in the U.K at present, however do be aware that on the retail sales front we did have a cracking heatwave which always hives the shops a lift…. Well maybe not all of them I doubt there were many sales of heating equipment.
Apparently the heatwave is heading back so we could find ourselves in for another big spend up.
Regarding economic data this week for the Pound is exceedingly quiet with just a few revisions of GDP data in the latter part of the week but for those looking for either Australian Dollars or U.S Dollars beware that meeting minutes from the last two interest rate decisions will be out on Tuesday and Wednesday night for those two which may lead to swift shifts in currency exchange rates overnight.
If you have the requirement to buy any foreign currency whether or not you are based in the U.K and you want to get the very best exchange rates along with assistance with the timing of your transfer then feel free to contact me directly and I will be happy to help you personally.
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The pound could quite easily rebound from these losses… Thursday is looking like the key date to note this week!
Moat of the noise regarding sterling at the moment is based on an assumption Mark Carney will be seeking to weaken the pound. I for one am very interested to see just what happens this Thursday and whether as a result we can expect any changes in policy by the Bank of England and of course see effects on sterling exchange rates.
It is worth noting Mark Carney is just one of nine members on the MPC (Monetary Policy Committee). In order to make a decision the members must have a majority vote so at least five members must vote for the measure. Despite being the Governor, Mark Carney’s vote is equal to the rest of the Committee. So even if he wants to do something maverick, he must convince the other members it is the best course of action.
It would therefore not be surprising to see the policy remain as was, indeed without Mervyn King who has been consistently voting for more QE, we may see GBP strength. The relief rally could add a couple of cents to current GBP rates.
What would be interesting is if we start to see guidance from the new Governor on future economic policy. Again however any future guidance is limited because Mark Carney cannot force the decision only try to convince his colleagues. Nevertheless Mervyn King managed to impact markets with no actual change in policy and Mark Carney will have that same power.
There is therefore much uncertainty but taking the post against a run of excellent data should lean towards less QE and more support for the pound. Despite the Government missing many of their own targets and (depending on how you interpret the data) borrowing and debt rising, the markets are not being too harsh on GBP since there is an understanding of the persistence of the current financial climate. Whilst it is a bit of a cop out to blame everything on the Eurozone crisis and the general bleak conditions globally it is an important factor. Yes the government could be doing much more in terms of spending but push that idea too far and you could end up in a much worse position. Some of the troubles in Europe are a great example of overspending.
It was only a year ago Mervyn King said ‘I don’t think we are even half the way through this crisis yet’ which I think is a good indicator that whilst rates may improve slightly in the short term, it is unlikely sterling will be making any major headway. I think the most sensible thing to do is buy on any small spikes as rates look very vulnerable and a sudden run of bad data could quickly see things change very quickly.
If you are considering an exchange in the future we can help make sure your transfer goes smoothly and that you trade at the very best rates of exchange. For a quick discussion of your exchange and all of your options, please feel free to speak with me Jonathan directly. You can call 01494 787 478 or simply email firstname.lastname@example.org
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An interesting week ahead for Sterling against all major currencies with a very busy week for economic data both for the U.K and other major economies.
The Pound has recently raced up against the Australian Dollar, New Zealand Dollar and South African Rand with quite some force, mainly down to weakness for the AUD, NZD and ZAR than Sterling strength.
We have a lot of data out for Australia this week which could kick the Australian Dollar whilst it is down inclusive of the RBA (Reserve Bank of Australia) Interest rate decision tonight shortly followed by the interest rate statement and GDP (Gross Domestic Product) data which will show how much the economy grew or shrank during a specific time frame.
There is a chance that the RBA may cut rates and even if they do not I would not be surprised to see comments in the statement following it suggesting that we will see another rate cut in the future. The way the markets works even the hint of future rate cuts could lead to Australian Dollar weakness which may finally push the exchange rate to the long awaited 1.60 mark once again.
The second big release for Australia this week is the GDP data – Should the Australian economy be following suit with the Chinese and slightly slowing down then this could be another kick in the teeth for the Australian Dollar.
Personally I feel we are turning a corner slightly against the Australian Dollar however do be aware that this trend can turn around rapidly so I feel 1.60 is a fair level to aim for as a buying level looking back at where we have been this year. A limit order may be a sensible approach as our automated systems will automatically buy for you should 1.60 become available anytime 24 hours a day 7 days a week, there is no charge for this handy tool and it can cancelled or amended at any time unless the order has been filled – Email me email@example.com for more information with a brief description of what you are looking to do.
Sterling Euro followers also have a busy week ahead with GDP data out for Europe and Retail Sales at the same time on Wednesday morning at 10:00am. We also have the ECB (European Central Bank) Interest rate decision on Thursday at 12:45pm – There is an outside chance of another rate cut for Europe which you would imagine could weaken the Euro quite a bit however I feel this is fairly doubtful, the main interest in my opinion will be the press conference held by head of the ECB Mario Draghi afterwards at 13:30pm.
Investors tend to hang off of his every word during the press conference and the slightest hint of trouble for the Eurozone could lead to a sharp drop inn the value of the Euros, with of course a solid and positive speech possibly leading to Euro strength, making it more expensive to buy Euros.
The U.K has its Interest rate decision on Thursday too at 12:00 pm and this is the last with Sir Mervyn King in charge so I would be surprised to see anything major come of this as personally I feel members will await the arrival of the new Governor Mark Carney from Canada.
Finally, to round the week off it is the turn of the USA and we have Non-Farm Payroll data out tomorrow for the States which can actually affect all major currencies. NFP data is essentially the number of people in non agricultural employment within the U.S and the reason it can lead to market volatility is it can effect global attitude to risk – Keep your eyes peeled for this data at 13:30pm on Friday as it can lead to a very busy end to the week.
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Sterling starts the week off with a little weakness – What may the rest of the week bring for the Pound? (Daniel Wright)
Sterling started the week off in a rather somber mood today, losing ground against almost all major currencies apart from the ever weakening Japanese Yen.
Tomorrow morning sees the release of Industrial and Manufacturing productions figures along with the Trade balance level for the U.K – Yet again these may help to again indicate whether or not the U.K has avoided the dreaded recession and however they do come out you can almost guarantee it will lead to lots of major analysts jumping in to make their fresh predicitons on the matter which could lead to a bit of early morning volatility – The releases come out at 09:30am.
In a reasonably quiet week for U.K economic data heads will then turn stateside on Wednesday evening as we see the FOMC meeting minutes from the last interest rate decision over in the U.S. These minutes may easily affect global attitude to risk, just like we saw with the sharp movements on Friday after the U.S jobs data, so if you have a pending transaction to carry out involving the Australian Dollar, New Zealand Dollar or any of the perceived ‘riskier’ currencies then it may be prudent to have a limit order or stop loss in place to take advantage of market movements or indeed protect yourself from adverse market movements. If you would like more information on these handy and free market tools then feel free to ask me directly email@example.com and I will be happy to explain them.
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Pound Sterling Forecast – What has happened and what may happen to the pound going forward? Sterling exchange rate news against the Euro, Dollar, Australian Dollar, New Zealand Dollar, Swiss Franc and South African Rand
Good afternoon – Please find the latest news surrounding the Pound and what may happen going forward:
Sterling – Euro
The Pound has had a fairly stable week against the Euro.
Today could have created a great deal of volatility and there were some fairly swift exchange rate movements however head of the European Central Bank Mario Draghi did not announce anything of any great significance during his press conference this afternoon and the bank of England kept everything as normal regarding interest rates and Quantitative Easing.
Tomorrow morning we have European Retail Sales figures out which you would imagine will not be great so we may see a small Euro buying opportunity in the morning.
Sterling – Dollar
The Dollar is seemingly making a little fight back once again against the Pound however four factors could affect this in the short term. Firstly the BOE interest rate decision today, secondly the issue with North Korea…. Hopefully this will calm down before any major action happens however be wary that you could see swift movements for the USD should the current threats start to gain some traction.
Thirdly, we have chairman of the Federal Reserve Ben Bernanke speaking this evening on the U.S economy so be aware of potential sharp swings for the Dollar overnight depending on what he says regarding future economic policy.
Finally, we have Non-Farm Payroll data out tomorrow for the States which can actually affect all major currencies. NFP data is essentially the number of people in non agricultural employment within the U.S and the reason it can lead to market volatility is it can effect global attitude to risk – Keep your eyes peeled for this data at 13:30pm tomorrow.
Sterling – Australian Dollar/New Zealand Dollar
The Pound is still finding these two as tough opposition and with news that commodity prices had risen by over 7% recently and that the Reserve Bank of Australia have once again kept rates on hold. The strange thing with these pairings is that both Governments appear to be disappointed with how strong their currencies are however neither seems to be doing much about it.
The general outlook is that the trend may continue unless someone steps in to do something about it however if global attitude to risk suddenly decreases then there is a good chance we may see a sharp spike and a potential buying opportunity – contact me today if you want to be made aware should this situation occur.
Sterling – South African Rand
This pairing has been fairly stable of late however once again attitude to risk falling globally may lead to the ZAR weakening again along with any further troubles over in South Africa that we saw a few months back.
Sterling – Swiss Franc
Again, no major movements of late for the pound against the Swiss Franc since the huge charge the Swissy made against Sterling a few months ago – Gaining around 8 cents in a week or so. This pairing is a strange one as the Swiss Government are still not particularly happy with the strength of their currency at present so at any point we could see them bring in a new fiscal policy like we saw quite some time ago where the Swiss Franc lost 10 cents in an hour!
All in all I think the strength of the Pound will be reliant on what happens with the bank of England today and also any rumours or predictions surrounding whether or not the U.K will fall back into recession on the 25th April.
If you have an upcoming currency transfer to make and you already have a trading facility then feel free to get in touch and I will be more than happy to assist you or monitor the market on your behalf. If you do not have a trading facility yet think I would be able to help you both in terms of a great rate of exchange and level of customer service then click here to register with us which is completely free and carries no obligation but will allow you to get a comparison against your current provider to see if I can help you.
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Sterling exchange rates – What has Cyprus meant for the Pound against the Euro, Dollar and other major currencies?
The trading floor here is absolutely manic today as it has been for the past week or so mainly thanks the the on-going tale of events over in Cyprus.
Quite simply how can you be comfortable now holding more than €100,000 in an account in a bank withing one of the more troubled economies – realistically you can’t!
The Sterling – Euro exchange rate has been up and down like a yo-yo of late and with news of a potential credit rating downgrade for the U.K by Fitch on Friday evening it did look like the week may start off on the back foot for Sterling unless something major came from Cyprus.
Sterling has indeed lost ground against a number of major currencies but has also gained against those linked to the Euro after events unfolding today.
The Cypriot issue has no doubt created a huge problem for banks all over Europe and in my view is absolutely ridiculous and personally I feel it will now hold the Euro back from gaining too much strength in the near term. For those of you looking to buy Euros in the near future there should be some great buying opportunities coming up however do not make the classic mistake of getting too greedy, in my experience it is always the clients that hold out for that little that seem to end up actually losing out.
If you would like to be informed of any spike in the market then feel free to email me directly for a spike alert email@example.com – just last week a client got in touch with me requesting this, I emailed and called him when the market shot up and then got him a much better rate than he was being offered by his current broker – We don’t only pride ourselves on a highly efficient service but also our rates of exchange too! You have absolutely nothing to lose by contacting me for a comparison just to make sure you are getting the best price around.
Now, what does the rest of the week bring? Personally I feel there will be an extremely volatile market throughout these next few days and it is very hard to put together a decent argument as to how the Euro will strengthen back so I feel (and this is merely an opinion) that the Pound may gain a little more ground against the Euro, especially with rumours that we may see an imminent Italian credit rating downgrade.
Against the Dollar and riskier currencies I see a much flatter market however if things really do kick off in Europe you may see a little Dollar strength as investors seek a safer haven to run to.
If you would like an up to date forecast regarding any currency pairing then feel free to email me directly or to fill in the enquiry form on this website and one of our highly knowledgeable traders will give you a call back to discuss your requirements. We deal with bank to bank transfers ranging from £1000 to help pay bills overseas to multi-million Pound corporate transactions – Just leave a brief description of what you are looking to do and we will make sure the right person gets straight in touch. Contact me (Daniel Wright) the main author and owner of this site by emailing me at firstname.lastname@example.org I look forward to speaking with you.
Cyprus urged to rethink their plans by European ministers – What may happen to the Pound and the Euro? (Daniel Wright)
As mentioned on the BBC there are growing calls for Cyprus to rethink their plans to tax savings which has caused outrage among many and could lead to huge problems for the Euro zone as a whole.
As I mentioned in my previous post this could lead to a run on the banks in Spain, Italy, Portugal, Ireland and other European economies as fear will grow that if this can be done by Cyprus seemingly off the cuff then it may end up happening elsewhere.
The Cypriots now feel they have been invaded and I think politically this is going to cause much more trouble than the short term fix it will provide and will damage the Euro further down the line.
Keep checking back here for news on this subject, after being postponed on numerous occasions apparently we may get a decision today, if they have not had a rethink then we may look at larger problems further down the line and personally I would not be surprised to see the Euro weaken accordingly.
For those holding Sterling this may provide a short term opportunity to buy Euros, depending on what we see come from the budget tomorrow, if the Government and Bank of England continue their doom and gloom train the Pound may quite easily drop back again.
If you have a pending currency transfer to carry out involving buying or selling Euros then contact me directly and i’m sure I can make you a saving over your bank or current broker along with offering a much smoother and sharper service meaning you do not have to watch the market all the time.
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