Category Archives: AUD

Sterling Slides Following Draghi Comments (Matthew Vassallo)

Sterling’s value has plunged against the EUR during Friday trading, with the single currency spiking by almost 2 cents at the high. This move has pushed GBP/EUR rates back below 1.40, proving once again how quickly market conditions and sentiment can change. Earlier this week we saw Sterling’s recent momentum against the EUR continue and with mixed reports surrounding Greece the markets seemed unsure which direction to take.

The catalyst for today’s EUR improvement is likely to be European Central Bank (ECB) president Mario Draghi’s comments during his press conference earlier today. He told the world’s central bankers that the current economic conditions inside the Eurozone had improved and it was looking “brighter today than it has done for seven years”. These comments immediately brought market support for the single currency and although the Pound has moved back above 1.40 this afternoon, I do feel the current levels should be taken advantage of if you have EUR to buy.

Despite these losses against the EUR the Pound has held its position against the USD and with rates back above 1.55 the Pound has certainly found some support following a tough couple of months. Cable rates had moved back below 1.50 recently but with uncertainty over when the US FED will raise interest rates, along with an inconsistent run of economic data, the Pound has managed to claw its way back up to the current levels.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

U.K records first negative inflation since records began in 1996 – European Central Bank comments lead to Euro weakness (Daniel Wright)

The morning started off with Euro weakness across the board and a minor Dollar fight back as we heard comments from members of the European Central Bank that they would be prepared to go even further if required to ensure that they achieve inflation of 2% and it looks like these comments broadly surround the QE program.

Expectations are that QE for the Eurozone will continue through September 2016 and bearing in mind that both the U.K and U.S are much deeper into their QE projects this may hold back the Euros from seeing too much strength in the near term.

Greece of course will still be an extremely important issue and any further news surrounding this issue will no doubt also have quite an impact.

Regarding the U.K and Sterling, inflation data out this morning has led to the Pound dropping against most majors other than the Euro. Inflation came out negative for the first time since records were taken in 1996 however the Bank of England had predicted that we would see this soon so it is not a great surprise.

Many are blaming Easter for these year on year figures as Easter had been fairly early this year. Usually over Easter travel costs are much higher and due to it being earlier this rise in costs fell outside the accounting period so we may see a spike back in inflation figures next month.

If you have an upcoming currency transfer to carry out involving either buying or selling the Pound for any major currency and you would like my personal assistance then feel free to contact me directly. I deal with thousands of private and corporate clients exchanging money for business needs and property purchases/sales and I would be more than happy to help you too. You can email me (Daniel Wright) on djw@currencies.co.uk with a brief description of what you are looking to do and I will get in touch.

A Volatile Morning for Sterling Exchange Rates (Matthew Vassallo)

It’s been an extremely volatile day for Sterling exchange rates, with huge swings against the EUR, USD & NZD. The Pound was out of the blocks following the opening of European trading, with roughly a cent and a half gained on the EUR in less than an hour. These gains were quickly extinguished however, with the EUR gaining support following poor UK inflation data. The Pound had moved back towards 1.40 against the EUR at yesterday’s high but following this morning’s dip is now sitting around 1.3850.

GBP/USD rates have dropped sharply during Tuesday’s trading, with the Greenback gaining almost 2 cents from this morning’s low. The Pound has benefited from a run of poor US data, which pushed Sterling value up, although after today’s losses it is back below 1.55 on the exchange. It was widely anticipated that the US were going to raise interest rates this summer but this move looked ever more unlikely following the poor US economic data mentioned and this is one of the main catalysts for Sterling’s recent run against the USD. However, head of the FED Janet Yellen tried to downplay fears of poor US growth and even alluded to the fact they could still raise rates this summer. Personally I think this is highly unlikely but even the mere mention of this has helped ease the recent pressure on the USD, bringing some much needed respite.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Exchange Rate Forecast ( Andrew Bromley )

 

The Week Ahead

Following a rollercoaster week for the Pound last week, this week looks to be no different! The UK releases several key items this week, which should all be handled with care…

Tuesday opens with UK CPI (Consumer Price Index) or inflation figures which will be as expected, just above 0%. The UK has suffered for several quarters with a low rise in the price of goods, especially fuel. Although the small extra money in our pockets may feel nice, the Pound suffers as the Bank of England is missing it’s 2.0% target by a fair distance. The UK CPI figures are followed by the Eurozone Inflation figures. The positive impact of EU Quantitative Easing may be seen so the Euro could strengthen as the Pound weakens…

Wednesday could be the key day of the week for both the Pound and the US Dollar as minutes are released from both countries recent interest rate decision meetings. The Bank of England met late this month following the UK General Election. The main reason that this months minutes could carry a lot of weight is on the back of positive comments last month from two of the Monetary Policy Committee members. They indicated that voting against an interest rate hike was harder, so Pound Strength could follow should similar comments be reported. Perhaps with greater impact on currencies around the world, the US Federal Reserve minutes to their recent meeting could substantially move markets. The recent Interest Rate decision in the US was made just after poor US employment data, with data being the key driver for the US Dollar movement. I therefore wouldn’t be surprised to see the US Dollar move, should the comments indicate the associated rate hike timescale.

*** Breaking News ***

Chicago Federal Reserve member Charles Evans indicated that a June Interest Rate hike is still not off the cards. The USD has subsequently strengthened this morning…

Thursday has a wider selection of slightly smaller data announcements including ‘Markit’ Business confidence figures, UK Retail Sales and US Home Sales figures. As well as this, the Eurozone releases the accounts of it’s Monetary Policy Meeting, potentially moving the Euro…

If you do have an exchange requirement, please feel free to get in touch. You can either call the trading floor directly on 01494 787 478 or email me AJB@currencies.co.uk

Have a good day – enjoy the rain if you’re in the UK!!

 

Currency Overview – Exchange Rate Forecast ( Andrew Bromley )

A relatively quiet end to the week from a data release point of view, especially when compared to the Election fall-out last week!

The key points for this week from a Sterling point of view were initially the positive market view prior to the Quarterly Inflation report on Wednesday (expecting positivity towards a rate hike), and then the subsequent Sterling correction following. As per yesterdays ‘blog’, Mark Carney of the Bank of England downgraded the UK growth forecast, casting a shadow of doubt over the potential Interest Rate hike in first quarter of 2016. Carney spoke of concerns towards wage growth in the UK, indicating the large (1 sixth of employed) ‘migrant’ workforce maintaining minimal increases.

From the Pounds point of view next week is busy with two key events – Tuesday morning has Inflation figures which are regularly missing the 2% target and Wednesday has the minutes of the Bank of England Interest Rate meeting. The minutes of last months Interest Rate meeting boosted the Pound, as one of the members of the Monetary Policy Committee indicated that it was harder to vote against keeping rates on hold. If you’re selling Euros it may be wise locking in prior to this date…

Those with NZD / AUD / ZAR exchanges will either be very happy or very unhappy! A mixture of Pound Strength and USD weakness has moved the commodity currencies massively, with rates in excess of 2.1 GBP-NZD, 1.96 GBP -AUD and 19 on the GBP-ZAR! I think these are phenomenal buying levels and that a correction will be made soon – worth moving at these levels in my opinion. Those selling ZAR would be wise to target the 18 region, as the rise in political uncertainty will hamper the Rand from strengthening for a long time yet.

The USD looks towards the FOMC (Federal Open Market Committee) minutes next Wednesday for the most recent indication to their Interest Rate hike. More recent Nonfarm Payroll and unemployment data has improved, however I believe Janet Yellen (chair of the Federal Reserve) will remain ‘dovish’ (meaning with minimal impact) as they are cautious of impacting the markets too heavily. Although USD holders that didn’t move in the 1.40s will be upset with themselves, it should be noted that this period of Dollar weakness will be improving the US export figures – a feel a strong move back to the 1.50s will be seen within the next month.

If you have a currency exchange, please feel free to get in touch. There is no doubt that we will be able to show you saving compared to your current broker so either drop me an email to AJB@currencies.co.uk or call me on the trading line 01494 787 478 (please quote this blog).

Have a good Friday!

Andrew

Sterling’s Value Continues to Rise (Matthew Vassallo)

Sterling’s value has risen again during Wednesday morning’s trading, with the Pound’s recent momentum carrying it through 1.40 against the EUR & 1.57 against the USD. This morning’s spike can be attributed to the better than expected UK unemployment data, which was released at 09.30. Unemployment has dropped from 5.6% to 5.5%, with official figures showing a fall of 35,000, with an overall figure of 1.83 million people now unemployed in the UK.

This improvement helped Sterling continue its momentum from last week, where following a period of uncertainty, the Pound fought back in line with the general election result. There was also further bad news for the Eurozone this morning following the release of their latest Gross Domestic Product (GDP) figures. Figures came in under expectation at 0.4% and this is likely to heap more pressure on the EUR.

We have the latest Bank of England (BoE) Quarterly Inflation report this morning and BoE governor Mark Carney’s subsequent statement and this is likely to prove key as to whether the Pound continues on an upward trend today, or if the EUR can find some market support around the current levels. Personally I feel he will try to dampen expectation as a rising Pound is now what the BoE want. They have already stated their growing concern that UK factory orders are at a two year low, which will only worsen if the Pound’s value continues to rise. I expect the EUR to find support around the current levels in the short-term and looking forward much will depend on how the situation in Greece develops and whether they can meet their debt repayment deadlines.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on mtv@currencies.co.uk

Currency Forecast – When to BUY or SELL Euros?? ( Andrew Bromley )

Those buying currency with the Pound have enjoyed a fruitful period, not only with the Pound strengthening General Election result, but also good market sentiment for the UK. The last 6 months have been a poor time for UK Manufacturing and Production figures, generally halting any progress for Sterling. However, this morning showed a good ‘print’, with figures above expectation in all categories. These positive figures, tied in to hopeful market murmurings towards a UK Interest Rate hike, are the providers of this spike. Expectation if for a positive stance in Mark Carneys ‘Bank of England’ Quarterly Inflation Report tomorrow, so yet more strength may be seen.

Very shortly (14:00 UK) is a Gross Domestic Product (GDP) prediction, with an improvement from 0.2% hoped for! This is followed tomorrow by not only the UKs Inflation report, but also European Economic ‘Consumer Price Index’ figures (essentially also inflation!)

USD holders should be aware of the slight reduction in retail sales figures expected tomorrow at 13:30. This could provide USD buyers an excellent opportunity as realistically good news about a US Interest Rate hike can’t be far off…

If you have a currency exchange requirement, please feel free to get in contact. There are many options available to avoid losses and unfavourable market movements – key if say you are buying overseas or have a large business currency exposure. Either email me AJB@currencies.co.uk or call the trading floor on 01494 787 478 (please quote this blog).

Andrew Bromley

 

Sterling’s Value Rises Again (Matthew Vassallo)

Sterling has gained value once again during Monday’s trading, following on from the positive spike seen towards the end of last week. This move is a timely reminder to all investors of how unpredictable the currency markets can be, as only a week ago it looked as if the EUR’s momentum was going to carry it back down towards 1.30. Fast forward and GBP/EUR rates have touched 1.40 at today’s high, providing clients with some of the best buying opportunities of the past 6 years.

It is not just the EUR that has taken a hit, as the Pound is up across the board. GBP/USD rates have hit 1.56 at today’s high and GBP/AUD rates are started to creep back up towards 2. The feel good factor following last week’s election is driving Sterling’s value higher, with any uncertainty around the election now removed. Personally I did not see such gains coming quite as quickly but then few had anticipated a Conservative majority. In the end the improvement seen inside the UK economy over the past couple of years has helped to deliver the Tories and Prime Minister David Cameron another term in office.

I do feel that the EUR will find support around 1.40 and I do not expect a sustained move above this level unless Greece defaults on its debt, a scenario I still feel is unlikely to occur. With the EUR still having greater scope for improvement when you consider recent history on the pair, I would look at Sterling’s recent recovery as golden opportunity that should not be missed.

Looking ahead and Wednesday is likely to be a key day this week, with UK unemployment & Eurozone Gross Domestic Figures (GDP) likely to dominate headlines. We also have the latest Bank of England (BoE) quarterly inflation report and this could be key to any fluctuations on GBP exchange rates.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

Election Update – Currency Forecast – Andrew Bromley

What an incredible night for exchange rates!

From the moment the exit polls were released showing a strong predicted outcome for Conservatives, the Pound has prospered. We’ve seen highs over the 1.38 level which is a far cry from the 1.33s seen yesterday!

I personally feel that a Conservative majority is the most realistic outcome, as at time of print there are 14 constituencies left to count with only 5 seats needed! If we see this outcome then there’s a good chance of a further Sterling spike.

The Pound is an incredibly volatile currency this morning – Ensure that it works in your favour!

BREAKING NEWS – Nigel Farange has missed out to Conservatives in the Thanet South seat. Will he now step down??

All is not quiet today on USD exchange rates, as Nonfarm Payroll and unemployment figures are due out at 13:30. An improvement in the unemployment figure is expected, so a gain for the Dollar is potentially on the cards. I’d be inclined to get Dollars bought prior to the release, as we may close the day out a lot closer to 1.50…

Finally the Australian Dollar is back in focus for AUD Buyers. 1.95 and above have been see which given no substantial AUD weakness is expected – I’d be inclined to take advantage, should the requirement be short term.

Feel free to get in contact today – its an incredibly volatile day and timing your exchange correctly could avoid you losing thousands on the exchange. The direct line to the trading floor is 01494 787 478 or drop me an email AJB@currencies.co.uk

 

The election and how it may impact on the Pound – Pound Sterling Forecast election special

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.

Hung Parliament

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 djw@currencies.co.uk 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 djw@currencies.co.uk   or call us directly on 01494 787 478.

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