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What will happen to Sterling exchange rates this week? The Great British Brokerage – Don’t settle for second best….(Daniel Wright)
The Pound has yet again had a torrid start to the week and appears to be finding that it has very few supporters out there at present.
Sterling exchange rates have dropped off against every major currency and with very little economic data out this week until Friday it is hard to see where the catalyst for the fight back will come from.
The markets are kicking the Pound whilst it is down and you can see why… if you were a big investor due to put money into a business, would you proceed with that investment not knowing what the actual plans for the business were over the next few years? More than likely not unless you have a high appetite for risk.
With this in mind big investors and speculators are at present leaving the U.K and indeed the Pound alone, settling for safer options. In the world of supply and demand, the demand for Sterling has dropped off and so therefore the value of the Pound has followed suit.
There are plenty of reasons why other currencies may start to weaken off but none seem to be impacting matters as much as the referendum has hit the Pound. You have lots of problems politically and with the European economy, the U.S election is about to get into full swing and both Australia and New Zealand are suffering a little due to their currency being too strong.
As we move into October anyone looking to buy foreign currency with the Pound will need to hope for economic data to continue to be solid post referendum and this will give the Pound a chance of coming back a little, although I hate to write negative posts about Sterling performance unless this data is good then the Pound may suffer as we approach the Christmas period.
If you have a large currency exchange to carry out involving buying or selling the Pound then you need not worry as I can help you every step of the way. The brokerage I work for is one of the longest standing and one of the few privately owned currency brokerages left in the U.K.
We can cater for clients all over the world and have access to the very top rates of exchange due to our large buying power and we also try to ensure that we keep clients fully up to date with market movements, along with explaining to them in simple terms the various options that they have in front of them.
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We have a key day for Sterling exchange rates today as we have the Bank of England interest rate decision, meeting minutes and Governor Mark Carney also speaks shortly afterwards.
There are a number of possible scenarios which I will outline below.
- Interest rate cut and a nod to further QE (Quantitative Easing). This will more than likely lead to Sterling weakness this afternoon as although the rate cut is expected and almost priced into the market, more QE would be seen as a negative for the Pound and could cause the rate to drop off.
- Interest rate cut and no QE. I actually think this would give the Pound a boost, again the cut is pretty much priced in but no movement on QE for the foreseeable would be likely to boos the Pound.
- No interest rate cut. I still think this is a possibility however a small one but this would give Sterling strength.
- A cut and then an aggressive stance in the speech on economic policy. We may see a rate cut and then Mark Carney could come up with an aggressive stance on where we head next which would more than likely lead to weakness for Sterling this afternoon.
All in all, I would say there is more chance of Sterling dropping than going up today but I wouldn’t fall off my chair if we finished the day higher than where we are now. The rate cut will not make a huge difference but what is carried out or spoken about around the rate cut will be the most important part to follow is what we see in the minutes from the meeting and what Mark Carney says in his speech shortly after.
Should you need to exchange currency either now or in the near future then it is highly important to have an experienced and proactive broker on your side, and of course someone that will get you a top exchange rate. I have so many new clients come to me through this site that have used the same broker for years and become comfortable with them to the point where they do not check prices any more. Pretty much every one of these people ended up using us as they found that their loyalty had led to their rates being nowhere near as good as they were when they first starting using their current broker.
Here at Pound Sterling Forecast we do not only offer market information but we also work for a huge currency brokerage in the U.K with a big buying power, meaning we can get our clients extremely good rates of exchange. If you would like to get a quote, speak about a pending currency exchange or just to get some more information on our service then feel free to email me (Daniel Wright) the creator of this site and I will be more than happy to get back to you personally. You can email me on firstname.lastname@example.org and I will aim to get in touch as soon as I can.
RBA cut rates in Australia as expected – U.K PMI Construction out this morning – Will it follow the doom and gloom of yesterday? What will the Bank of England do? (Daniel Wright)
Overnight the RBA cut interest rates in Australia leading to a slight drop in the value of the Australian Dollar and a small buying opportunity for AUD buyers.
The cut was widely expected by the markets so we didn’t see a huge movement in rates, I feel that many investors and speculators are waiting to see what happens with the Bank Of England on Thursday at 12:00. Again, an interest rate cut is expected so I wouldn’t see this having a huge impact on exchange rates however the most important factor on Thursday will be the minutes from the meeting, if we see any nod to QE (Quantitative Easing) and what they suggest could happen next for the U.K economy.
QE is basically printing more money and is generally seen as negative for a currency, so if they do introduce more this is where the Pound may slide. Any other comments on future fiscal policy may also give the Pound an extremely volatile afternoon so keep a close eye on exchange rates this Thursday.
First thing today we have U.K PMI construction figures at 09:30am – This is also one to watch as yesterday the manufacturing figures were the worst since Feb 2013 and led to a drop in the value of Sterling. Throughout August we will continue to see the first full data sets post brexit so the Pound may be in for a tough month.
Should you be in the process of buying a property, sending money overseas for your business or exchanging currency for any other reason then it is well worth getting in contact with me (Daniel Wright) the creator of this site directly. It is rare that we cannot help clients get a better rate than they are being offered elsewhere and we also but a lot of effort into helping our clients time their purchase. You can email me on email@example.com with a brief description of your requirements and a contact number and I will be more than happy to deal with you personally.
So we have had a fairly dramatic few weeks since the result of the referendum and I would be pretty surprised if we don’t end up with an extremely volatile market for the next few months.
For anyone with a currency exchange to carry out in the coming days, weeks or months volatility brings you both, excitement, fear and opportunity as the Pound is currently at a 31 year low on a trade weighted basis.
The next big release of interest (assuming there are no more surprises) will be the Bank of England interest rate decision, meeting minutes and summary of QE due out on Thursday 14th July. Investors and speculators alike will be watching to see what move we will be seeing from Mark Carney to try and tackle the potential economic turbulence we have ahead for the U.K.
Carney has hinted at a potential interest rate cut, this may lead to further weakness for the Pound, on top of this the minutes showing what was discussed and how the plans were put in place will be of great interest and will no doubt lead to some extremely choppy trading conditions once again.
I personally feel that the plane has well and truly overshot the runway at the moment, if you look at the cold hard facts then apart from Governmental problems which will eventually resolve themselves, nothing else has actually officially changed. There is still a long way to go before we have pulled the trigger on the starting pistol to leave the EU by acting on article 50.
Banks, funds and many others are acting in advance of potential issues and the newspapers are hyping up the potential doom and gloom ahead but there is still a chance that nothing will actually change.
If you are in the process of bringing money back from overseas or you have an upcoming currency exchange requirement then these are the times that you really need to make sure you have an experienced and proactive currency broker helping you every step of the way. We have seen these kind of markets before, I worked during the European debt crisis and during Fanny May/Freddie Mac so know what may be lying next and how to tailor a game plan to try and help our clients get the most for their money.
If you are in this position then feel free to email me (Daniel Wright) the creator of this site on firstname.lastname@example.org with a brief overview of what you are looking to do and a contact number. Please note we do not deal in holiday money or cash.
Tomorrow we see the release of Non-Farm payroll data which can impact all major currencies, including the Australian and New Zealand Dollar. The reason this happens is because Non-Farm payroll data measures the number of people in Non-Agricultural employment in the U.S and they quite often get the prediction fairly wrong. Due to the markets moving on rumour as well as fact you can see rates move based on predictions and then swiftly correct themselves once the data is actually released.
Once again we are more than happy to add to our 60,000+ clients so if you have a currency exchange to carry out involving any of the major currencies and you would like to speak with me personally then feel free to email me (Daniel Wright) on email@example.com – I deal with clients buying and selling properties overseas, business transactions, high-net-worth individuals and premier league footballers on a daily basis so would be happy to assist you too in the strictest of confidence.
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 firstname.lastname@example.org 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 email@example.com 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 firstname.lastname@example.org
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.
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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 email@example.com
I work for a specialist firm of currency brokers in the UK and we can assist clients all over the world, even if it is just a one off. I look forward to hearing from you.
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 firstname.lastname@example.org 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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I look forward to speaking with you!