Pound Sterling Forecast

US dollar rates have continued to strengthen and I personally feel are likely to continue in this fashion as global economic uncertainty continues to rise. Yesterday Bank of Santander along with 15 other banks in Spain were downgraded because it could not guarantee the ability of the Spanish government to provide the support they need. This is likley, in my opinion to keep pressure mounting on the Euro and is also more than likely to continue the current trading conditions we are seeing. I would expect the dollar to be a major mover benefitting from its ‘safe haven’ tag and I would expect the USD to post further strong gains towards 1.55 against the pound and 1.25 against the Euro. Good news if you are selling dollars but those buying may need to reasses their options.

As my colleague Ben also alluded to in his post yesterday, I also feel the so called ‘riskier’ currencies such as the AUD, NZD and ZAR will also lose further ground from this economic turmoil. These currencies are notoriously popular during times of more stabe conditions due to their higher yields and hence potential return for investors. Through the use of a ‘carry trade’ investors borrow in low yielding currencies ie JPY, CHF and seek alternatives with much greater interest rates, hence the move towards the AUD (at 3.75%) NZD (2.5%) and ZAR (5.5%). However during a downturn in global confidence you will often see the unwinding of these trades and an influx of currency to the market, through simply supply and demand – the more of a currency the cheaper it becomes and therfore the value of the sold currency falls. These moves to me are likley to continue and I would expect GBP/AUD to head towards 1.65, GBP/NZD to 2.10 and GBP/ZAR close to 13.5. Likewise I would expect currencies such as the Yen to find support and strengthen against the pound and dollar.

As a specialist broker here at currencies.co.uk the purpose of this website is to give our market knowledge and opinions to private and corporate clients alike in an attempt to help you make the decision as when best to trade. Of course it is impossible to get it right all the time, although some traders think they do, but we can happily provide you with the tools and data to try and pin point the right time for you and your requirement. To utilise the service please keep following the blog and take a look at some of the other websites we also regularly post on including www.eurorateforecast.com and www.australiandollarforecast.com

Should you wish to reach me direct to discuss my views and to trun though your individual transfer in more detail then please email Mike at mgv@currencies.co.uk or call 01494 787 478

Good morning readers,

In early morning trading in the UK the pound has started off the trading session in much the same way it finished yesterday with red screens. Sterling has dipped below 1.25 against the Euro and now below 1.59 against the USD.

With no economic data off note to come out of the UK today, eyes will be on David Cameron as he prepares to give a speech to business leaders in Manchester. Depending on his tone the pound could react one way or the other as he will talk up how he prepares to protect the UK from a spiralling Euro zone crisis.

I have stated before that what is happening in Greece is having a knock on effect on all major currencies. Now that we know that an election is Greece has been called for the 17th of June I feel this will help the market settle down slightly. Take the southern hemisphere currencies for instance. (AUD, NZD & ZAR) The pound has gained by over 10 cents against some of them recently mainly down to investors fleeing the riskier currencies. Now that we have a month or so before any major news comes out from Greece I think we may see investors move back into the riskier currencies and hence the pound may come back down a cent or two over the coming weeks.

Regardless of which way the currency markets go a sharp correction for the pound cannot be written off. We have seen on far too many occasions over the last year or two that when the pound spikes it normally comes crashing down. With rates at 2.07 against the Kiwi Dollar 1.60 v the Aussie Dollar and 13.2 v the Rand  you may want to think about limiting your exposure to the market movements.

If you speak with me via the number on the side of this page 01494 787 478 just ask for Ben Amrany when you call or email me at bma@currencies.co.uk I can talk you through the different options that may be suitable, from stop loss and limit orders to forward buying your currency if you want peace of mind. Some of these contract types will protect the price of your upcoming property or any purchase that you are making. The limits do not commit you to today’s rate thus allowing you to take advantage of any brief spikes. The stop loss can protect you from any adverse market movements.

As well as us trying to help protect you from any adverse market movements we will also make sure that we beat the rates of exchange that your bank will offer you. This helps you make the biggest saving possible. We are one of the largest currency brokers in the UK and we have been trading for over 12 years now. We specialise in currency exchange and do not deal with any other financial products. We will offer you a very personal service talking you through all the options that are available to you to help you maximise your currency exchange.

If you would like to speak with me regarding any major currency pair you can contact me at bma@currencies.co.uk or call on 01494 787 478 and just ask for Ben Amrany.

Ben Amrany

Sterling exchange rates fell yesterday to a 3 week low against the greenback falling back into the 1.59 territory. This is a something that I personally feel could continue, particularly with the continuing unrest in Europe. With the US dollar still very much the global currency of choice (mainly as so many commodities are priced in dollars) during times of unrest the dollar will normally outperform most majors. I for one feel this trend is close to happening as investors digest the problems facing Spain (their bond prices reached a record high for 2012 on Monday at 6.218%). This is creeping ever closer to the 7% levels at which Greece, Portugal and Ireland had to seek bailouts and with Spain potentially a much larger problem, I really feel this will weigh on the Euro (I would expect levels to remain above 1.25 heading towards 1.26 and beyond in the short term).

For this reason I too think the US dollar will begin to find support as investor’s look to move their money to the relative safety of the dollar and we could easily see a move back towards 1.58 in the coming days. For the best exchange rates on your transfer and to discuss the various contracts we can offer in an attempt to maximise your currency exchange then please email Mike at mgv@currencies.co.uk

Greece heads back to the polls as Hollande officially takes over from Sarkozy

Greece is set to go to the polls again after days of coalition talks failed to produce an agreement on a new government, on the day the new French president Francois Hollande was officially sworn into office. Mr Hollande said he was aware of the challenges ahead, including the debt crisis, and vowed to “open a new path in Europe”.

Mr Hollande called for  “a compromise” over the German-led focus on austerity as the way out of the Eurozone, however in on goings in Greece still appear to be dominating the Eurozone and the Euro.

At the elections on 6th May, the results showed a majority of Greek voters backing parties opposed to austerity plans demanded by the EU and IMF in return for two bailouts. Polls suggest the leftist Syriza bloc, which came second in the 6th
May vote and rejects all further cutbacks, could become the largest party after a new election. Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.

However European leaders say they will cut funding for Greece if it rejects the bailout agreed in March. This would effectively mean bankruptcy for Greece and German Finance Minister Wolfgang Schaueble again ruled out amending the agreement. The Greek president Karolos Papoulias will meet all political leaders at 13:00 local time (10:00 GMT) on Wednesday to put in place an interim government until the new vote, which is expected to take
place on 10th or 17th June.

I feel this will continue to heap pressure on the Euro and any Euro sellers, certainly if funds are not liquid, may wish to consider a forward contract to guarantee their rate in advance. For Euro buyers this is potentially good news, however for anyone with an interest in GBP/EUR look out for the unemployment figures and Bank of England Inflation report at 09:30 and 10:30 respectiveley.

What now for the Aussie, Kiwi and Rand?

Recent moves against these three currencies have been dramatic to say the least. Since the year lows in February we have seen the pound gain 9.5% against the Aussie, 9.7% against the Kiwi and 10.8% against the Rand. On a transfer of £200k between the high and low during this time this makes a respective difference of AUD 29,400, NZD 41,400 and ZAR 288,000. Is it time to take advantage?

This recent trend must be somewhat of a relief to the many clients and individuals emigrating to that part of world. I personally feel with the volatility in Greece this trend could continue in theshort term. But to use the analogy of an elastic band, I do feel these currencies could snap back at any point. However until a degree of stability is restored in Greece (Christine Legarde head of the IMF was quick to rule out a breakup of the Euro) this run may continue, just make sure you are in a position to take advantage.

To dicuss the this report and my views or to run through yoru individual exchange requirement then please email Mike at mgv@currencies.co.uk or call 01494 787 478

The Pound has started the week off fairly strongly once again against most major currencies as European woes continue and global risk seems to be getting lower by the hour… I know my shares are certainly tumbling off the back of this news too which is quite depressing!

Pretty much daily now we are seeing new problems either economically or politically throughout the Eurozone and it looks like this trend could easily continue.

We have France with a new President seemingly unwilling to get involved with austerity, Greece not being able to agree on anything, Spain bailing out their banks and a whole host of other problems dotted around.

Nothing is set in stone and suprises can pop up at any point on the currency market but with the Pound seemingly being used as a safer haven and all of the above actually happening personally if i had Euros to sell I would be looking at doing something fairly rapidly.

Regarding buying the riskier currencies it does become tempting to at least hedge your bets and book half of your requirement so that you can at least guarantee yourself half of your funds at a rate that would have been fantastic around six weeks ago.

If you were planning on using your bank for the exchange then i can assist you, likewise if you currently use a broker I am only one email away for you to compare to make sure you really are getting the best rate of exchange for your transfer.

Feel free to get in touch with me directly djw@currencies.co.uk or join or mailing list by filling in the form at the top right hand corner of this page, only this morning I helped a client who has ended up with over £12,000 more of Australian Dollars since he has been following this site both in terms of holding off from booking out a rate when we were a lows a few weeks back and getting a much better rate of exchange than his bank now he has decided to book out his currency.

Sterling exchange rates have fallen slightly this morning but are still set to post strong gains across the board this week, continuing a run that has now seen the pound set some levels not seen for a good while. Notably reaching a high not seen since November 2008 against the Euro, remaining close to a seven month high against the greenback (USD) and trading at year highs against the AUD and NZD. However it is not just the so called major currencies that the pound has posted strong gains and I thought the below table would make interesting reading for regular followers of this website.

Working for one of the UK’s largest independent currency brokers I come across a number of different clients with varying requirements predominantly dominated by the majors. Remember, at Currencies.co.uk we are happy to assist you with the exchange and transfer of money for a huge variety of reasons such as property, emigration, investments, cars, weddings, hotel bills, imports and exports to name but a few. So, if you, a friend, relative, colleague or your business have currency exposure that you have not already discussed with a broker then email me directly to mgv@currencies.co.uk  – alternatively call 01494 787478 and ask for Mike quoting PSF.

To finish off lets take a look at the data today to keep a close eye on:

This morning at 09:30 we have UK PPI (Producer Price Index) data – figures expected to fall sharply from 1.0% to -1% – this could hamper to the pounds recent run this morning.

At 13:30 we have US PPI data – expected to post a small fall from 0.3% to 0.2% – this could cause some small dollar weakness in the afternoon session but I would expect this to be minimal.

Finally also at 13:30 we have Canadian unemployment figures, expected to increase from 7.2% to 7.3% – watch out for the loonie (CAD) to weaken a touch this afternoon, potential creating some good buy opportunities.

To discuss the best way to exchange your foreign currency and to discuss my personal views email Mike at mgv@currencies.co.uk

Today sees the biggest economic release of the week in the form of the Bank of England Interest Rate decision. This will dictate sterling movements today and is well worth being aware of if considering any currency transfers involving the pound.

In the first full working week of every month the Bank of England’s Monetary Policy Committee meets to discuss whether or not they will make any changes to the UK’s base interest rate and any changes in their ‘asset purchase facility’, also known as QE.

Interest Rates – It is always worth being aware of the interest rate of the central bank for the currency you are concerned with. Generally speaking the lower a rate the weaker the currency. And vice versa the higher the rate, the stronger the currency. In much the same way as a higher interest rate attracts savers to a bank account, a higher central bank rate increases the likelihood of investment in that country and hence currency. The mere sentiment an interest rate will be raised or lowered can cause exchange rates to move as investors move money to take advantage of any perceived future gains.

The UK has had interest rates at 0.5% ( an all time low) for 3 years because of the financial crisis. A lower interest rate helps boost an economy by making borrowing cheaper and increases the chance of growth in the economy. It is highly unlikely we shall see any interest rate movement today, but the fact the UK is probably going to be the first of the US, UK and Europe to be raising interest rates (even though not for at least a year) is causing the pound to strengthen at the moment. The lowering or raising of Interest Rates is not the only way a central bank can influence the economy however…

Quantitative Easing – QE or the ‘asset purchase facility’ as  it is known is the process whereby the Bank of England purchases assets of banks to create extra money which allows the banks to lend more to private individuals and businesses, thereby stimulating the economy. Seen as a dirty word by some, QE increases the money supply and generally causes the currency to weaken. Some would question its effects on the economy but it is impossible to say what state the UK would be in now, had it not been for the previous rounds of QE. Employed by the US and Japan it was previously seen as a method of last resort, now more of a crutch for economies struggling to grow.

Considering the UK is now technically back in recession and Eurozone issues look set to get even more complicated we may see the BoE adopt a pre-emptive strike as they did last year. I personally do not think they will but for anyone looking to purchase the pound, this morning’s news is well worth waiting for. But if you do not see the rate go the way you had wished I would be set for further losses because if there is no change in rates or QE then we may see a ‘relief rally’ as the market picks up slightly countering any drop prior to the release in expectation of more QE.

If you are considering any currency transfers and would like assistance with securing with the very best exchange rates and free no obligation information about all of the events moving your exchange rate including forecasts, please contact me Jonathan directly on 01494 787 478, quoting PSF or email me directly jmw@currencies.co.uk

Any comments, questions, suggestions or enquiries welcome.

Jonathan

It has been a very mixed day for sterling exchange rates against a host of major currencies. While sterling has been strengthening to fresh highs against the riskier currencies (THREE AND A HALF YEAR HIGH AGAINST THE EURO, 2.0567 AGAINST THE KIWI DOLLAR, 1.6049 AGAINST THE AUSSIE DOLLAR, 12.9315 AGAINST THE RAND) it has weakened against some of the safer haven currencies(1.6066 AGAINST THE US DOLLAR, 1.4895 AGAINST THE SWISS FRANC)

Now for the pound, economic data seems to be making very little difference to how the exchange rate performs. Late last night retail sales data showed a decline over the course of the year. This had little effect on the excellent gains the pound has recently made. Most clients that have an imminent exchange are though capitalising on the improvement for sterling especially as we have another big announcement by the Bank of England tomorrow. We are not expecting much out of the interest rate decision but we must always be wary of the dreaded QE scenario. If more than 50% of the members do vote in favour of QE then sterling could weaken slightly. You may not want to take this risk with the excellent rates compared to a month ago and you are more than welcome to contact me at bma@currencies.co.uk before the decision so we can help you make a saving over your high street bank or any other broker that you may have used in the past. Just ask for Ben and I will make sure that I answer your enquiry as quickly as possible.

Looking forward there is always the chance that sterling could continue its trend of rising against the Euro and the southern hemisphere currencies but I feel it will be fairly range bound against the USD and CAD. If you need to SELL any major currency to buy sterling I would be very cautious and fairly worried. The way the pound has performed if the trend continues your losses really could add up. If you are sitting on Euros for instance hoping that the market will reverse and drop back below 1.20 I think it is extremely unlikely and you may be prudent to move sooner rather than later as the losses may continue.

If you would like to speak with me regarding any currency pair we can look at the options that are available to you to help you maximise your exchange. The authors on this site work for one of the largest currency brokers in the UK. We have been trading for over 12 years and have assisted thousands of clients make significant savings. If you have never used a broker and would like more information on the personal service that we provide please do feel free to email me. If you have used a broker in the past then challenge us to help beat their rate so you make an even bigger saving over the high street banks. You can contact me (Ben Amrany) at bma@currencies.co.uk and we can then look at the currency pair in question to help you decide when is a good time to convert your funds.

Ben Amrany

If you need to make a transfer into a foreign currency then now may be the ideal time to seriously consider your options. The Pound is the highest it has been against a basket of major currencies for over 35 months. If you have a larger sum to do it may be prudent to hedge your bets and look at securing half of your currency whilst rates are at such great levels.

Sterling Euro

We now have not only Economic problems but also political problems throughout Europe which will no doubt cause big issues in the coming weeks and months. Of course part of the reason that we will have seen rates move up so much of late is the markets reacting in advance so I would be surprised to see the markets completely rocket in the right direction, there may be a little further to go but it would be prudent to at least partly take advantage of this 3 and a half year high.

Sterling Dollar

Fairly range bound of late and I think this pairing has been in the background with Europe and the ‘riskier currencies playing a much bigger part in the play. Most analysts are predicting the Dollar to strengthen back as it is seen as a safer haven in times of low global confidence and I’m sure we will see plenty of that in the near term.

Sterling Australian Dollar, New Zealand Dollar and South African Rand

Many that have moved overseas in the past year or so will be watching these currency pairs with a smile on their face, and those selling to bring back into Sterling may wish to seriously consider their options in case this trend continues.

Personally it is a coin toss – Further rate cuts in Australia may lead to      further weakness for the AUD however some of this move may be in anticipation of that. European problems will weigh these currencies down and I’m fairly sure there are more of those to come. The one thing to remember though is not to get greedy. Those who contacted me initially saying they would love to get 1.60 should look at putting in a limit order at
that level.

If you have an upcoming transfer to make be it large or small, private or corporate then feel free to get in touch with me directly and I will be happy to help you not only get a better rate than you are currently receiving from your bank but a much better level of service too. I can be reached on djw@currencies.co.uk

Both France and Greece are the talking point this morning following election results that may now weigh heavilly on the Euro in the coming weeks and months.

France’s new socialist Presidente Francois Hollande and his anti austerity agenda may now lead to huge disruption for progress in this European debt crisis as he appears to be against Angela Merkel and previous President Sarkozy’s measures and this may cause political troubles throughout Europe. political instability is one of the main factors that can effect a currency and it would not surprise me to see the Euro continue to struggle (not crash but struggle).

This will cause jitters for the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand and may lead to further weakness for these particular currencies this week. once again actual economic data appears to be in the background and political problems are not only front page news on currency websites but front page news accross the world.

I can see this really causing big problems (not quite world war three) but not a million miles away. If you are selling a property in Europe and are worried about rate movements then perhaps you are right, I still somehow have clients holding off and waiting for rates to improve and if you look at the facts and figures then it would not surprise me to see rates stay like this or get worse for a period of time.

If you are concerned about the current market conditions and want to have an experienced and friendly currency broker on your side throughout this crisis then feel free to contact me directly djw@currencies.co.uk and i will be more than happy to assist you in timing (however I cannot directly advise) and getting  you the best rate when you do book out your currency. I reguarly better clients rates by enough to make it worthwhile changing over and will be happy to add you to my ever growing list of clients.

The Pound has once again had an encouraging week against most of the majors as confidence in Sterling is still fairly high – Even with a technical recession hanging over our heads investors seem to be able to see past that and in my opinion the U.K is being seen as “The best of a bad bunch” hence the minor confidence and strength in the Pound.

French elections will weigh heavilly on the Euro over the weekend, and the pending results may lead to an extremely volatile start to the week for those buying or selling Euros. Many of my clients I speak to in France believe that there looks to now be only one winner, and his relationship with Angela Merkel is about as solid as North and South Korea, so if he is elected expect fireworks for the European Debt crisis in the coming months.

Today is fairly important for those with a Dollar interest and indeed interest in the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand. Non Farm Payroll data is essentially the number of people in Non agricultural employment over in the States and is a key indication as to how their economy is performing.

The reason it is Non agricultural is because these jobs may be seasonal and do not give a fair representation of the employment figures. The reason it can cause quite a lot of volatility is because predictions are made in advance and these can be wildly out… As many of our regular readers will know the markets move onb rumour as well as fact, and should the figure come out quite a way from predictions the market does correct itself rather swiftly.

The reason this effects the AUD, NZD and ZAR and pretty much most majors is because as i’m sure you can imagine it will effect attitude to risk and will lead to rapid movements of large amounts of money globally in what generally presents a volatile end to the week.

If you have a currency transfer to carry out either now or in the coming months and you would like me to personally assist you and get you a better rate than your bank or current broker then email me directly djw@currencies.co.uk – I now receive 30,000 unique visitors per month to this site and if you are finding it useful and of interest then why not get in touch and see how else I can help?

I look forward to speaking with you soon, and for those in the U.K enjoy your Bank Holiday weekend