Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

When shall I move? (Daniel Johnson)

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Sterling Seller Strategy – GBP/EUR,GBP/USD and GBP/AUD

GBP/EUR – Sterling is suffering due to the uncertainty surrounding Brexit. One of the key points of negotiation is whether or not the UK financial sector will have access to the single market following Brexit. This is proving to be particularly difficult. Theresa May’s proposal was for the UK to continue to have access to the single market and to abide by the highest standards of international laws. This was declined by Brussels.

The French wish to attract UK financial services to Paris in order to benefit from tax revenue. Financial services is the biggest form of tax revenue in the UK. French politician, Bruno Le Maire has stated the UK will have to utilise a legal mechanism know as equivalence. Equivalence allows countries outside the EU to have limited access to the single market, this is dictated by Brussels and can be revoked at any time. Hardly a stable situation for UK based financial services.

Until there is more clarity on this situation I feel GBP/EUR will stay below the 1.15 resistance point. 1.15 has only been available for very small windows of opportunity if you are a Sterling seller. If you have to move short to medium term I would suggest performing your trade should interbank hit 1.14 .

GBP/USD – The Federal Reserve interest rate forecast is crucial to the value of the Dollar. Federal Reserve representatives have indicated there could be as many as three rate hikes this year, which bodes well for the green back. Personally, I would be surprised to see as many as two rate hikes from the FED if you consider recent history despite the recent change in Fed chair from Janet Yellen to Jerome Powell. It is being swept under the carpet that a rapid rise in interest rates has the potential to cause serious problems in the US economy.

The most drastic effect of a steep rise in rates would be the increase in pressure on US tax payers to repay current debt. Keep a close eye on this situation if you have a trade involving USD.

If you are selling Sterling short to medium term I would consider anything above 1.40 to be a decent trading level.

GBP/AUD – The Interest rate outlook from the Reserve Bank of Australia (RBA) is quite a negative one and it looks as though there is unlikely to be any change in interest rates this year. Despite that there is still resistance on GBP/AUD at 1.80 and considering the uncertainty surrounding the Brexit situation if you are buying the Aussie with Sterling set your target rate as 1.78-1.79 to move.

This blog is geared toward Sterling sellers, Sterling buyers feel free to drop me an email and I will provide a trading strategy.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to help. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximize your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered

If you would like my help feel free to email me at dcj@currencies.co.uk. Thank you for reading

Sterling Exchange Rates Rally Close to 1.13 for GBP EUR (James Lovick)

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The pound continues to trade within a tight range as the markets still await new developments in the Brexit negotiations. The pound is currently trading at 1.1270 against the Euro and 1.39 against the US dollar having seen reasonable gains across the board today. Those clients looking to sell Euros for pounds have been presented with another good opportunity to convert. The focus is now largely on Brexit with the terms of the transitional arrangement expected to go through in the next couple of weeks.

The next round of negotiations which will cover the thorny issue of the future trading terms and are expected to commence towards the end of March when the pound could see considerable volatility at this time. In my view both sides are likely to start at the furthest sides of the negotiating table with clear red lines which could make a deal seem almost impossible at first. As talks progress then the pound could start to rally if it looks like there is a deal to be had. This is something to be aware of for the medium term and any positive comments could help the pound rally especially when it comes to financial services. The outlook for the short term however does not look so bright with no real certainty being offered at this time. Certainly from a selling perspective there are some excellent prices available at present for buying pounds.

Australian Dollars

The Australian dollar is another currency with a less clear future and is seeing a lot of volatility at present on the back of developments in Australia and overseas. The policies being adopted by US President Donald Trump are of concern for Australia as recent changes that he has made to include the imposition of tariffs on steel and aluminium can have a negative impact on the Aussie. The prospect of a trade war could weigh heavy on the commodity currency and the Aussie could weaken further. Similarly a sequence of interest rate hikes are expected from the US Federal Reserve throughout 2018 and this could see the Australian dollar also weaken as funds move away from Australian and back to the higher yielding US dollar.

The other big driver for GBP AUD is what is happening with Brexit and in the short term I see the pound falling lower. Clients looking to sell Australian dollars may see a window of opportunity to convert although beyond that if the mood on Brexit looks better than the pound could see considerable gains against the Aussie.

For information on sterling exchange rates or any other major currency then please get in touch and I will be happy to assist. You can email me at jll@currencies.co.uk

Interesting start to the week for Sterling exchange rates – Pound gains against some majors

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Sterling has had a reasonably volatile day considering that we have had very little in terms of economic data out, with political issues appearing to be the main driver of the market.

We have had news from Germany that Angela Merkel is due to lead her fourth Government due to a coalition being formed, which is good news for the Euro. On the flip side, we have had the result from the Italian election too which may lead to a period of uncertainty for Italian Politics as the result has ended in a hung parliament and it does seem that all parties that could, are a long way away from forming a coalition.

Euro exchange rates have only weakened slightly off the back of this news, but I would expect to see this matter continue to be in the headlines and to impact the Euro the longer it goes on.

Further afield, Donald Trump’s recent comments and suggestions that he may look to impose tariffs on steal, aluminium and motor vehicles has really hit global markets quite hard, the biggest loser from all of this so far has been the Canadian Dollar, as it hikes concerns for the Canadian economy and the NAFTA agreement.

At the time of writing this post we have seen GBP/CAD touch 1.80 for the first time in a while. If you have a Canadian Dollar exchange to carry out either now or in the future then it is well worth getting in touch with me, Daniel Wright for a quick chat regarding the options available to you and for a free quote so that you can find out just how good the exchange rates we offer are. You can email me on djw@currencies.co.uk.

Data this week

There is little in terms of big economic data releases from the U.K this week but there are a few releases around the globe I would keep an eye on.

Tonight we have the RBA interest rate decision and monetary policy statement over in Australia, this may impact where GBP/AUD exchange rates head overnight and for the rest of the week.

Wednesday we have European growth figures and later in the day the Canadian interest rate decision and Bank of Canada rate statement.

Thursday sees the release of the European Central Bank interest rate decision and press conference. No changes to interest rates are expected but comments in the press conference at 13:30pm can tend to movement markets substantially, as investors and speculators will hang off of Mario Draghi (head of the European Central Bank) and his every word.

Friday brings an important one from the States which can impact all major currencies, we have non-farm payroll data which is a measure of the number of people in non-agricultural employment in the U.S. The reason this can impact all major currencies, not just the Dollar is that is can impact global attitude to risk.

If you have Sterling to exchange into a foreign currency or foreign currency to bring back into Sterling for a property purchase/sale, for your business or for any other reason then feel free to get in touch with me directly. I can help you both in terms of achieving the very best rate of exchange and with the timing of your trade too. You can email me (Daniel Wright) on djw@currencies.co.uk and I will be more than happy to get in touch with you to let you know the various options available to you.

 

A new month tomorrow brings a host of economic data to round off the week

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Following a reasonably flat February we enter a new month tomorrow and with that we will have a flurry of economic data along with a speech by Theresa May which will round off the week.

Today those looking to buy foreign currency with Sterling or to bring foreign currency back into the Pound may wish to be wary of month end flows today, the final trading day of the month can lead to fairly large movements as traders, funds and financial institutions look to balance their portfolios as the month enters a close.

Tomorrow we see the start of economic data to show how the U.K performed throughout February as we have the release of Manufacturing data at 09:30am along with mortgage approvals figures at the same time. Analysts are expecting a slight drop off in manufacturing and a slight rise in mortgage approvals, so as long as these expectations are correct the two may cancel each other out.

Friday has the possibility of being a really volatile day, with U.K Construction figures starting the ball rolling at 09:30am, followed by 10:00am by a speech by the Governor of the Bank of England Mark Carney. Carney’s current stance still appears to be heading towards another interest rate hike for the U.K, possibly in May so should he hint at any change to this stance then Sterling may move quite rapidly off the back of this, I would expect investors and speculators to be hanging off of his every word.

Finally, to round off the week we have Prime Minister Theresa May due to deliver a speech to the U.K regarding Brexit. Markets will once again be looking for hints on any progress and the delivery of the speech will be key for Sterling’s performance as the week nears an end.

We have seen a minor lift recently for the Pound due to a heightened chance of a rate hike and the fact that Brexit talks both here and with the EU are seeming to go well, any confirmation of this by May would more than likely give the Pound a boost but any hint of negativity could lead to the Pound dropping off as the week nears a close.

If you are in the position that you need to exchange Sterling in the coming days or weeks then it is imperative that you make us aware of it, so that we can make you aware of any buying or selling opportunities that arise.

You can contact me (Daniel Wright) the creator of this site almost ten years ago by emailing me on djw@currencies.co.uk and I will be more than happy to speak with you personally to explain how I can help you achieve the best rates of exchange which could potentially save you thousands of pounds.

 

Key Resistance Points for Sterling (Daniel Johnson)

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Trade before key Resistance points to take advantage of favorable levels

The Pound has struggled against the majority of major currencies for some time. This is due to the uncertainty surrounding Brexit. The progression in Brexit negotiations will be key to the value of the Pound for the foreseeable future. There has been rumours of late that we could be heading for a softer Brexit, the market moves on rumour as well as fact which is why we have seen small spikes for Sterling.

There seems to be resistance points on GBP/EUR and GBP/AUD with the market retracting every time these levels are reached. On GBP/EUR the resistance point is 1.15, GBP/EUR has only hit this level on a few occasions in the last nine months and without having contracts in place it will be very difficult to take advantage of the peak levels. It is important to have an experienced broker in place to make sure you are aware of these situations when they occur. Of course, I do not have a crystal ball but I would be surprised to see GBP/EUR drop below 1.12 short term. I think there would have to be a break down in Brexit talks to see GBP/EUR fall as low as 1.11. On the flip side we would have to have firm news on trade talks for GBP/EUR to break 1.15.

On GBP/AUD the resistance point is 1.80. I am of the opinion this has the higher likelihood to be breached than 1.15 on GBP/EUR. Despite Brexit concerns the Reserve Bank of Australia (RBA) have stated that there will be no rate hike until there is a considerable rise in inflation which is currently struggling. This would put a rate hike off the cards I would think until the earliest 2019.

The problem caused by this is that AUD is often picked by investors due to it’s high returns and the USD is currently offering the same returns with less risk. There is also expected to be as many as three further rate hikes by the Federal Reserve this year and with the RBA stalling this could mean trouble for the Aussie.

If you have a currency requirement I would be happy to assist. If you wish to maximise your return it is important to be in touch with an experienced broker. If you let me know the details of your trade I will endeavour to produce a trading strategy to suit your needs. If you have a currency provider in place I am willing to perform a live comparison and I am confident I will be able to demonstrate a considerable saving. It will only take a couple of minutes and could be well worth your while.
You can trade in safety knowing your trading with Foreign Currency Direct PLC, a company trading for over 16 years. Our accounts are published online at companies house and we are FCA registered.

If you would like my help I can be contacted at dcj@currencies.co.uk. I look forward to hearing from you.

 

Important day for Sterling exchange rates – Unemployment, wage growth and comments from the BOE

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Today we have a fairly important day for Sterling exchange rates.

Today’s unemployment and average earnings figures will be key for Sterling’s performance for the rest of the week, not only is it a key economic data release for the U.K but it will also be closely watched by the Bank of England too, as this data will have an impact on their next move on interest rates.

Average earnings figures will be the key figure they will be looking for improvement on, one of the key sticking points for the BOE is the fact that average earnings (the increase in peoples  earnings) is still a way behind the pace of inflation (the rise in the cost of goods and services) which could cause trouble for the economy going forward, especially should the BOE make any changes to interest rates.

Essentially, an increase in average earnings may lead to the Pound having a nice boost tomorrow morning as it may increase the chance of an interest rate hike coming for the U.K, should average earnings remain the same or drop off then the Pounds may weaken, as it may kick the chances of a rate hike further down the road.

Later in the day we have several members of the Bank of England speaking too, and should they continue their hawkish (or positive) stance on interest rates then the Pound may have a good solid day ahead, equally should they dampen expectations then we may see a drop off and lose the gains that were made yesterday.

We did see positive gains yesterday following news that the EU Parliament may be considering giving Britain privileged access to the single market, this was seen as positive Brexit news and even the slightest hint of positive news regarding Brexit can give Sterling a boost.

If you are looking to buy any foreign currency with Sterling or should you need to bring a large sum of foreign currency back into Sterling then it is well worth getting in touch with me directly.

I can help you both in terms of timing your transfer, keeping you up to date with any spikes in the market and of course getting you the best rate when you come to book the deal out.

For a free, no obligation discussion on how I can help you with this important decision please feel free to email me (Daniel Wright) on djw@currencies.co.uk and I will be happy to get in touch with you personally to see how I can help.

UPDATE 

U.K unemployment has risen from 4.3% to 4.4% and wage growth has remained at 2.5%. This has led to a small drop int eh value of Sterling but nothing too major. Contact me today for further thoughts!

Will Sterling exchange rates rise higher? Sterling spike on possibility of single Market access…

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The pound received a boost today as it became apparent the European Parliament is debating a special arrangement for the UK to gain access to the Single Market. The UK would benefit hugely from remaining in the Single Market, this is the free trade and harmonised area of regulation within which EU members can trade.

The reaction by the market to this news just highlights the sensitivity of the pound to Brexit news, it is also highlights the lack of real concrete news in that the market would react and seize on such news with the reaction it did. Sterling has risen around 0.7% against both the Euro and US dollar presenting fresh opportunities on both currency pairings.

The outlook for the next few days could see the pound rise even further with the latest Unemployment data released tomorrow at  09.30 am and then on Thursday the latest GDP (Gross Domestic Product) data. The focus will be on wage growth for the UK, tracking any increases in UK wages versus the rises we have had in Inflation. A key concern for consumers and the Bank of England is whether or not the UK consumer’s spending power and living standards are being eroded too much by the higher Inflation the weaker pound has brought us.

Sterling seems to be enjoying some buoyancy for now although there are still many unanswered questions over the Brexit to settle, overall impressions on the rates are that sterling will come under pressure again once the talks begin and negative headlines surface over any progress.

With plenty left to understand from Brexit, the pound will clearly not just keep rising from here although the next 48 hours could offer some interesting opportunities. If you have a transfer to make buying or selling the pound then why not get in touch with us to see if we can offer any practical assistance with the timing and a better exchange rate?

Thank you for reading and for more information at no cost or obligation please speak to me Jonathan Watson y emailing jmw@currencies.co.uk.

Brexit Talks and Average Wage Growth set to cause volatility for Sterling (Daniel Johnson)

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Brexit Negotiations continue to dictate the Pound’s value

Theresa May will be in with her cabinet minsters this week at Chequers until they have set out the frame work for a Brexit plan that includes a high level alignment between UK and EU laws.

May hopes to unite leavers and remainers from her cabinet in order to push forward Brexit negotiations. She will attempt to reassure Eurosceptic ministers that Britain will be able to move away from EU rules over time under “managed divergence”.

They are expected to have the outline for the Brexit plan by the end of play Thursday. May is due to make a speech next week detailing her latest proposals for the future relationship with the EU. This will no doubt cause volatility on the markets.

Phase Two of talks currently look like they are going to be problematic. The EU has warned the UK that Britain cannot expect full single market access after exit. Brussels has stated it will oppose any deal that allows the UK to undermine the level playing field by cutting regulations.

May has threatened to cut regulations and taxes should they fail to come to a trade agreement. She stated that if the deal offered by Brussels is not in the UK’s interests she will scrap the current European economic model and put in place “competitive tax rates and policies that would attract the world’s best companies and biggest investors”.

It looks as though we could see Sterling weakness when talks continue based on the uncertainty on how they will proceed.

Tomorrow’s Unemployment and Average Wage Growth data could create an opportunity for Sterling sellers

Unemployment data has been impressive of late close to it’s lowest levels since records began more than forty years ago. Average Wage Growth will be the key data release as in order to have a healthy economy inflation and wage growth should be close to parity, they currently aren’t. Inflation has risen rapidly since the vote to leave the EU due to the weak value of the pound. Expectations are for year on year wage growth figures to come in at 1.5%, if figures land away for m expectations we could see swings in Sterling value.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

Pound Sterling Forecast – The week ahead

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Last week saw the Pound’s losses continue, despite the speech on Wednesday from Boris Johnson during which he attempted to galvanise the British public into banding together and tackling Brexit with positivity. Without any further clarification on the UK’s post Brexit position this seemingly did little to change market perception.

Early next week, on Tuesday, the RBA will release their previous meeting minutes. This is followed on Wednesday by UK inflation report hearings; inflation will be closed watched by the BoE when deciding on a possible interest rate rise in the future. Wednesday also offers us FOMC minutes from the US. Thursday sees the EU monetary policy meeting accounts, followed by Canadian Retail Sales, and on Friday we have Eurozone Consumer Price Index data to end the week.

As all readers are more than likely aware, this market is a strange one and still extremely politically driven, so do be wary of any movements regarding Brexit talks that may also impact the Pound at any time.

Below we have detailed some of the key data releases and events so you can keep an eye out for them.

Monday (today)

  • 24h – EU | Eurogroup meeting (EUR)
  • 22:15 – Australia | RBA Assistant Governor Bullock Speech (AUD)

Tuesday

  • 24h – EU | EcoFin Meeting
  • 00:30 – Australia | RBA Meeting’s Minutes (AUD)
  • 07:00 – Germany | Producer Price Index (Jan) (EUR)
  • 07:15 – Switzerland | Industrial Production (Q4) (CHF)
  • 09:30 – UK | Retail Sales (Jan) (GBP)
  • 10:00 – EU | Consumer Confidence (Feb) (EUR)
  • 10:00 – EU | ZEW Survey – Economic Sentiment (Feb) (EUR)
  • 10:00 – Germany | ZEW Survey – Economic Sentiment (Feb) (EUR)

Wednesday

  • 08:30 – Germany | Markit Manufacturing PMI (Feb) (EUR)
  • 08:30 – Germany | Markit Services PMI (Feb) (EUR)
  • 09:30 – UK | Average Earnings including Bonus (Dec) (GBP)
  • 09:30 – UK | ILO Unemployment Rate (3M) (Dec) (GBP)
  • 09:30 – UK | Claimant Count Rate (Jan) (GBP)
  • 09:30 – UK | Public Sector Net Borrowing (Jan) (GBP)
  • n/a – UK | Inflation Report Hearings (GBP)
  • 14:45 – US | Markit Manufacturing PMI (Feb) (USD)
  • 14:45 – US | Markit Services PMI (Feb) (USD)
  • 19:00 – US | FOMC Minutes (USD)

Thursday

  • 01:15 – USD | FOMC Member Kashkari Speech (USD)
  • 05:15 – USD | Fed’s Quarles speech (USD)
  • 09:00 – Germany | IFO – Current Assessment (Feb) (EUR)
  • 09:30 – UK | Gross Domestic Product (Q4) (GBP)
  • 12:30 – EU | ECB Monetary Policy Meeting Accounts (EUR)
  • 13:30 – US | Continuing Jobless Claims (Feb 9) (USD)
  • 13:30 – US | Initial Jobless Claims (Feb 16) (USD)
  • 13:30 – Canada | Retail Sales (MoM) (Dec) (CAD)
  • 15:00 – US | Fed’s William Dudley speech (USD)
  • 17:10 – US | FOMC Member Bostic speech (USD)

Friday

  • 24h – EU | European Council meeting (EUR)
  • 07:00 – Germany | Gross Domestic Product (Q4) (EUR)
  • 10:00 – Germany | Consumer Price Index – Core (Jan) (EUR)
  • 10:00 – EU | Consumer Price Index – Core (Jan) (EUR)
  • 13:30 – Canada | Bank of Canada Consumer Price Index Core (Jan) (CAD)
  • 13:30 – Canada | Consumer Price Index (Jan) (CAD)
  • 15:15 – US | Fed’s William Dudley speech (USD)
  • 18:00 – US | Baker Hughes US Oil Rig Count (USD)
  • 18:30 – US | FOMC Member Mester speech (USD)

 

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Pound Sterling has a volatile week of trading against all majors

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This has been an extremely interesting week for those following Sterling exchange rates, especially during the final few trading days.

With global stock markets all over the place, the bank of England hinting at a potential interest rate rise and Brexit comments all having an impact, let alone economic data this really is a hard market to call at present.

Sterling started the week off on a low due to the worst PMI (Purchasing Managers Index) we have seen in the past 16 months and then failed to really recover too much in the days following that.

Yesterday however the tables turned and the Bank of England released their latest interest rate decision, monetary policy statement, meeting minutes and inflation report. One of the key things to be taken away from the releases was the hint towards another interest rate hike this year for the U.K. The markets began to price in a hike for the U.K and we saw a 75% chance of a hike in May from the Bank of England, with the mere speculation of a rate hike generally leading to strength for a currency the Pound instantly gained value against all major currencies.

As the afternoon progressed however, a bout of profit taking and concerns that Brexit woes may hold the BOE back from acting too soon the Pound lost ground fairly quickly. This once again shows how important it is to have your eye on the ball, or to use a proactive and helpful currency broker should you be due to carry out any large money exchanges.

Today has been similar to the performance late yesterday afternoon, further Sterling losses. Concerns over the Brexit transition period and further political uncertainty in the U.K, along with further volatility with global stocks have led to Sterling finishing the week off poorly.

The next key piece of economic data for the U.K will be inflation figures due out on Tuesday morning at 09:30am. Expectations are for inflation to have risen from 2.5% to 2.6% and should this happen then it will once again heighten the chance of an interest rate hike in the U.K and may give Sterling a slight lift once again.

Either way this is not a market to gamble on. If you have a currency exchange to carry out then make sure you are dealing with a proactive broker who will contact you should a good opportunity arise. If you would like me to help you personally with any pending exchange, for example a property purchase overseas then feel free to get in contact with me on djw@currencies.co.uk and I will be more than happy to get in touch to discuss the various options you have available to you.

Over 5000 people have been in touch since I started this site 7 years ago and I welcome anyone else that would appreciate my assistance both in terms of maximising your exchange rate and helping make a complicated situation a lot easier to address.