Pound Sterling Forecast

Pound Sterling Forecast - Expert opinions on foreign exchange

Has sterling now bottomed out?

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Okay so such an analysis seems slightly against the grain considering the headlines and news all pointing towards the tough negotiations for the UK in the Brexit talks. A much lower chance of an interest rate hike is not helping matters and the worsening economic outlook for the UK is yet another worry on the back of the pound. Sterling weakness has been very apparent against most currencies, particularly against the Euro which has seen almost 3 cents movement downward this week. The US dollar is a little softer as Trump continues to struggle to meet expectations, the Australian dollar is much stronger against sterling as they look to possibly raise interest rates sooner.

What will drive sterling higher possibly is the outcome from the Brexit talks. In a week where sterling has been fairly immune to the political developments I would expect some bigger movements in the future. It is becoming more and more apparent that a hard Brexit is now off the table and in the future it is much more likely we will see a softer Brexit. This should see the pound rise in the future as it becomes more and more likely some kind of deal will be done.

As the worst fears subside hopefully the pound will find strength but unfortunately for clients waiting for this to happen, it could prove an expensive gamble! If you have a transfer to make buying or selling the pound next week’s GDP (Gross Domestic Product) data could well move the market. For an up to date overview of your position and the latest news and information on the rates please speak to me Jonathan Watson by emailing jmw@currencies.co.uk

Inflation cause a fall in Sterling value (Daniel Johnson)

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Inflation Drops to 2.6%

The rapid rise in inflation is causing worry among traders The rise in inflation is a direct impact of the the vote to leave the EU.

The uncertainty surrounding Brexit talks has caused the pound to drop to a low of 1.1170 on GBP/EUR of late. The low value of the pound has caused imports to become substantially more expensive. Importers are then forced to put the value of their goods up and these price increases hit the consumer. This is all very well provided consumers are prepared to pay higher prices. If they are not , this is when the economy could suffer and there is the potential for a recession. There is a direct link between inflation and wage growth. If average wage growth is not keeping up with inflation, alarm bells will ring. Average wage growth currently sits at 1.8%.

Consumer Price Index (CPI) data was released yesterday. CPI is a key barometer for inflation. Inflation dropped from 2.9% to 2.6% and Sterling fell against the majority of major currencies. Despite the fall in Sterling, I am of the opinion a drop in inflation is a good news, the closer to average wage growth inflation getsthe better for the economy long term. The reason for the drop in the pound’s value can be attributed to the decreased  likelihood of an interest rate hike by the Bank of England (BOE). Further increases in inflation would have meant a rate  hike would be more probable. I believe  a raise in rates is a solution to the inflation problem.

If Sterling is to strengthen significantly the stance on Brexit negotiations needs to be made clear. We also need a firm government in place without constant threats to the prime minister’s position. I think we are moving closer to a soft Brexit with the freedom of movement of people required in order to have free trade. There will need to be compromise rather than the previous “have your cake and eat it strategy”. Unfortunately if we are moving toward a soft Brexit I think it will not be quick for fear of public uproar following the vote to leave.

If you have a  currency transfer to perform in the coming days, weeks or months then I will be happy to speak to you directly as I will be willing to help you both with trying to time a transaction and getting you the best possible rate when you do come to trade. A small improvement in a rate of exchange can make a significant difference so for the sake of taking a few minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on dcj@currencies.co.uk and I will endeavor to get back to you as quickly as possible. Thank you for reading.

Buying Euro and Dollar rates backtrack after strong Friday showing (Joshua Privett)

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We have begun the week with a slight return following the significant gains for buying Euro and Australian Dollar rates on Friday, it is only buying US Dollar rates which continue to improve.

Buying US Dollar exchange rates are up largely due to political concerns in the wake of the ongoing email scandal with Trump’s campaign team. Whilst this is not a suggestion that markets are expecting impeachment – we have already seen delays in Congress to pass key legislation – and without the hefty corporate tax cuts hitting the agenda as promised, the euphoria surrounding the Dollar is beginning to evaporate.

Today however, GBP/EUR, GBP/AUD, and GBP/USD will all be governed by inflation data set to hit the wire at 9:30am.

Inflation has been a governing factor in the recent resurgence of the interest rate debate in the UK economy, after it was shelved in the wake of the post-Referendum cut to 0.25%.

Prices are now rising way above the 2% target, actually getting close to 3%, but it was still not enough for a universal call to raise interest rates in the UK economy to try and encourage saving and keep prices under control.

Should the data today reflect a move above 3%, the calls may get louder, and rates will likely react accordingly – with a strong showing for Sterling against its major currency pairings.  Otherwise, you can expect a fairly stable day on the currency markets once more.

I strongly recommend that anyone with a Sterling based currency requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

You can contact me directly by calling 01494 787 478 and asking the reception team to speak to Joshua.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant sums of money on a prospective transfer.

 

Are you getting the best deal that you can on your currency exchange? (Daniel Wright)

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Over the past 8 years of writing on this site we have had thousands and thousands of people getting in contact with us asking both if we can help them with the timing of an upcoming currency exchange and on top of this can we get them a better rate than they are currently being offered.

The answer to both of these questions is generally yes. All of the writers on this site work for a foreign exchange brokerage that has now been in operation for coming up to 18 years and has a turnover of over half a billion Pounds per year, assisting clients moving money around the world for business requirements, property purchases/sales, emigration and many other reasons.

What most people do not realise is that there are a number of mistakes that clients make when choosing how to buy their foreign currency which actually ends up costing them a lot more than they need to pay. here are just a handful of them:

I have used this company for years. Just because you have used a brokerage or been with your bank for a long time this does not mean you are going to get a fantastic rate of exchange. There are companies out there that will take advantage of the fact that you have the relationship with them and take a larger margin the longer you deal with them. Because of this it is always sensible to check your price every so often. If you would like a quick email comparison to what you are being offered today then contact me on djw@currencies.co.uk and i will be happy to provide one.

My estate agent recommended I use their broker. This is a major error a lot of people make when buying or selling an overseas property. They feel like they would prefer to have everything under one roof or buy into everything their agent tells them. This actually can be really costly as the agent will be getting paid a commission by the broker so that broker then will have to take a wider margin in order to cover paying the agent extra. You are more often than not better off finding your own broker for the currency transaction, this will not cause any issues with the property purchase/sale going through as long as you find a good and efficient one and it may make the difference of thousands of pounds. djw@currencies.co.uk if you would like to discuss how I can help you.

They have an online platform and it is easy. Ease of use doesn’t always mean that you are getting the most for your money. These online platforms work on set margins where as if you actually speak with a broker on the phone they can negotiate the rate for you and squeeze a little more out of the market for you. Do not fall into the trap of being lazy as you will be throwing money away. djw@currencies.co.uk to speak with a real person that can save you money.

These are only a few things to avoid but there are plenty more of pitfalls out there that can make a big difference on larger transactions or over the course of a year.

If you have even the slightest suspicion you are not getting the best rate of exchange then feel free to contact me for a free, no obligation chat and I can let you know what our prices are and whether or not it may be worth you reconsidering who you are going to use for your pending transaction. You can email me on djw@currencies.co.uk or fill in the enquiry form on the right hand side of this page.

 

Sterling’s woes continue (Daniel Johnson)

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What Factors  are effecting the Pound and what has the potential to cause Sterling strength?

The pound is finding it difficult to rally against the majority of major currencies. If we look at GBP/EUR it has remained between 1.1217-1.1457 for the last 30 days. UK data releases have been poor of late across the board. Stifling any potential rally. You can blame politicians with their own political agenda for current pound weakness. Inflation is of particular concern, currently sitting at 2.9%. This is a direct result of the vote to leave the EU, the pound has weakened considerably which has caused imports to become more expensive. Businesses purchasing these imports are then passing these price increases on to the consumer. This is fine provided consumers continue to spend, if they don’t this is when the economy could be in real trouble.

Consumer confidence is linked to wage growth. If inflation is at much higher level than average wage growth this is when it is expected that consumers will tighten their belts. Average wage growth is due to out tomorrow, it currently sits at 1.7% and expectations are that it will rise to 1.9%. If data fails to reach 1.9% expect further Sterling weakness.

In order for the pound to make significant gains we need a stable government in place, not one constantly threatening the PM’s position. Political uncertainty historically weakens the currency in question and that is what we are witnessing at present. A stable government is also needed in order to conduct Brexit negotiations effectively, these will be some of the most important talks for the UK in the last 50 years it is vital they are conducted without internal bickering.

If you have a pending currency trade, you need to be in touch with an experienced broker in order to maximise your return. If you let me know the details of your trade I will endeavor to produce a free trading strategy to suit your, individual needs. If you have a currency provider already in place I would suggest getting in touch to perform a comparison I am confident I can demonstrate you a considerable saving. I can be contacted at dcj@currencies.co.uk. 

 

 

 

 

 

Politics and Brexit holding back the Pound (Daniel Johnson)

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What has to occur in order for the pound to rally?

Sterling has had a woeful time of late and unfortunately I think that politicians are to blame. First by Cameron using a referendum as a bartering chip with Brussels, thinking we would definitely remain in the EU. Then by Boris and Farage, backing leaving the EU for there own political gains. And now by May calling a snap election, failing to gain a majority victory and  having to form a coalition. Political and economic uncertainty historically weaken the currency in question and that is currently what we are witnessing.

The uncertainty surrounding Brexit trade negotiations  is the main catalyst behind Sterling weakness. It will influence pound value for the foreseeable future. In order for the pound to make a significant rally again other major currencies the UK stance on Brexit needs to be made clear. At present it looks as though the “have your cake and eat it” strategy is no longer feasible as Brussels attempt to play hard ball.

There are two probable strategies to consider. A high access, low control deal similar to the European Economic Areas (EEA). This would be the most positive strategy for the pound, although it would not be welcomed by leave voters and could cause public outrage. It would mean going through all this economic turmoil for little change to the UK’s original position before the vote to leave. The other viable strategy would be to have a low access high control situation similar to the CETA arrangement between the EU and Canada. This would be more bespoke but more difficult and time consuming to negotiate. The CETA deal made it easier to export services and goods, which benefited both business and people.

I am of the opinion the pound is currently chronically undervalued, but will remain remain bound short term. Once we have a stable government in place and a firm stance on Brexit negotiations Sterling will have the opportunity to rally. This will also stave off the rapid inflation we are witnessing and stop the Bank of England’s posturing on hiking rates.

If you have a currency requirement I would be happy to assist. If you let me know the details of your requirement I will endeavor to produce a free trading strategy to suit your individual needs. If you already have a currency provide I will be prepared to perform a comparison and I am very confident I can demonstrate a significant saving. I work for Foreign Currency Direct PLC, we have been trading for over 16yrs and are registered with the FCA. Please do get in touch if you would like my assistance. I can be contacted at dcj@currencies.co.uk .

 

 

Sterling Exchange Rates Fly after Mark Carney Speech (James Lovick)

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The pound has seen an excellent day across the board creating lots of opportunities for those clients looking to buy other currencies. Bank of England Governor Mark Carney surprised the markets this afternoon when he stated that there may need to be some removal of monetary policy. Rates for GBP USD saw an excellent spike in excess of 1% and taking levels back over 1.29 for this pair. GBP EUR has been more muted although ECB President Mario Draghi’s comments have created some uncertainty for Euro exchange rates after some backtracking on comments earlier in the week.

Thursday however sees the vote on the Queens speech which should see additional volatility for the pound. This speech should conclude the general election flop almost three weeks ago and the pound could fine some renewed support on the back of it, assuming it all goes through. There could be political fireworks though considering Labour leader Jeremy Corbyn is looking to make an amendment to the Queens speech and will try and vote it down.

Realistically though the UK Prime Minister Theresa May should find the support she needs with the backing of the Democratic Unionist Party (DUP). In this outcome the pound in my view should see a rally as a degree of confidence is restored after the hung parliament. Those clients looking to move out of sterling could see some excellent buy opportunities. Please get in touch and we can try to help time any future currency exchanges. Developments from Westminster should see a material gain for the pound and considering GBP AUD has broken 1.70 once again there may be more room in this rally.

Those clients selling Euros or Australian dollars in particular may wish to consider taking the risk out of the volatile currency markets.

If you would like further information on sterling exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

DUP deal finally realised, buying Euro and Dollar rates showing positive signs (Joshua Privett)

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We’ve known the deal has been coming for a while, which may explain why buying Euro and Dollar rates only flirted upwards by half a cent of so yesterday with the confirmation of the agreement between the DUP and the Conservatives.

Call the £1bn investment in Northern Ireland what you will, but currency markets themselves will be much more focused on developments later this week, and how the Government’s policies will be impacting the Brexit agenda.

Whilst headlines will certainly grab the £1bn fact from the DUP arrangement, we have heard little so-far as to how the special situation of Northern Ireland, sharing a land border with the Eurozone like Gibraltar, will affect the Government’s hard brexit aims.

The ability for free travel, Custom’s Union, and economic access are all on the table, and Theresa May will be forced to clarify this at least to some extent during Parliamentary debates this week, and for Thursday’s vote on the Government’s agenda.

Any hints of concessions will very likely see a heavy spike in the Pound. Personal political views aside currency markets are one which have traditionally hoped for stability and certainty. A softer break from the EU comes under this umbrella, and repeatedly since the Referendum, suggestions to this effect have played well with Sterling’s value.

So at this point the Pound is expected to improve at the end of this week with some stability re-established to the UK political arena. The real question is whether Sterling can make significant gains on buying Euro, US Dollar and Australian Dollar rates of exchange back above the respective 1.18, 1.30 and 1.75 levels which were available only last month.

As my article at the weekend suggested the urgency is still very much in the realm of Sterling buyers in my opinion, with the pressure keeping the Pound cheap from a calamity of election about to be relieved. If you are selling Euros, US Dollars or Australian Dollars for Sterling and wish to discuss your options, you can contact me immediately by calling 01494 787 478 and asking the reception team to be put through to Joshua.

Conversely, Euro, US Dollar, and Australian Dollar buyers do not face the same level of urgency and, as such, can also call or email me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

I have never had an issue bettering the rates of exchange offered from high street banks or alternative currency brokers, so a brief conversation could save you thousands on a prospective transfer.

Conservative/DUP Coalition Could be in Place Today – Will This Boost Sterling’s Value? (Matthew Vassallo)

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News filtering through this morning, has indicated that a deal between the Conservatives the controversial DUP party could be in place by lunchtime today.

If confirmed we could see Sterling stabilise following a tough run, which has seen heavy losses against most of the major currencies.

GBP/EUR rates have dropped below 1.14, whilst GBP/USD are once again trading down near 1.27. With even greater losses against the commodity based currencies such as the AUD & NZD, those clients holding the Pound have been waiting for a shift in market sentiment, to help alleviate some pressure and halt any further aggressive downturns.

Whilst today’s deal has likely been factored into Sterling’s current value to some extent, it is unlikely to do it further harm as and when it is officially confirmed.

The market uncertainty created by the current political vacuum has not benefited the Pound, with investors wary about a weak hand in Brexit negotiations.

UK Brexit negotiator David Davis was unsurprisingly bullish in an interview on the Andrew Marr show this weekend but confirmed that a strong majority would have given him a better starting, as to which to enter into negotiations with the EU.

Whilst so much instability remains, those clients holding the Pound need to ask themselves whether they are prepared to risk further losses, in order to make any gains.

Personally, I feel that the pound will be restricted in terms of how far it can go and in my opinion, based on the current market uncertainty, the downside risks currently outweigh the upside gains.

For this reason, I would be looking to protect the current levels, rather than a gamble on any substantial up gains, with 1.15 on GBP/EUR and 1.30 on GBP/USD likely to offer a lot of resistance should Sterling start to gain any sort of traction.

Now is the time to contact a personal currency broker and here I can help guide you through this turbulent market. I assist my clients with the timing of their currency transfers, to ensure that any market value is maximised.

We can offer award winning exchange rates & service, which surpass any of our competitors.

Please feel free to contact me if you would like to be kept up to date with all the latest market movements, or simply wish to compare our rates to those of your current provider.

I am available on 0044 1494 725 353 between 08.30-18.00 and just ask one for the team for Matthew. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Buying Euro and Dollar rates in limbo as we still await election completion (Joshua Privett)

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Buying Euro and Dollar rate have been visibly choppy but haven’t gone anywhere over the past week and a half, with currency markets as frustrated as many in the UK electorate that no clear post-election direction has been laid out.

The Queen’s speech, the outlining of the new Government’s plans and priorities, and likely some snippets of how Brexit policy is going to be effected in the wake of the election result, will commence tomorrow.

However, we have yet to see a formal confirmation of any ‘deal’ reached between the Conservatives and the DUP, and last week the DUP’s Deputy Leader stated that there was ‘no deadline’ for such a deal.

What can we expect for Sterling moving forward?

It’s messy certainly, but whilst not a perfectly clear emergence from the election, we are seeing some clarity on the horizon. With Brexit talks having begun yesterday, the content of the Queen’s speech will be absolutely key in deciding what will happen to buying Euro and Dollar rates.

At the moment there is still an expectation of a positive improvement for Sterling. Whenever it was close to an expected announcement of co-operation with the DUP, GBP/EUR, GBP/USD and GBP/AUD rates were seeing marginal improvements. These were the dashed by delays from unexpected events that took the Governments attention, such as the Grenfell Tower fire and the terror attack at Finsbury Park.

However, surprises can come. Anyone with a Euro, US Dollar or Australian Dollar buying requirement wishing to take advantage of any boosts which occur on Wednesday may be wise to remember this. Whilst waiting to capture an opportunity you can also protect your downside by placing a ‘Stop Loss’ order. This will mean your currency is automatically bought at a rate you are comfortable with, should the market suddenly lurch against you.

All forecasts for Sterling exchange rates are largely dependant on the content of the Speech and how the Government addresses this during Prime Minister’s questions.

Anyone looking to buy Sterling using Euros, US Dollars or Australian Dollars now seem to be on a tighter time frame. The likelihood tomorrow is for Sterling strength so it may be worth securing an exchange rate before the close of play today. Even if you have a requirement later in the year, if you wish to take advantage of these highs to buy Sterling, you can pre-book your currency for a future transfer using today’s rates.

I strongly recommend that anyone with a Sterling based currency requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer aimed at maximising your currency return.

You can also call me directly before tomorrow’s events on 01494 787 478 and simply ask the reception team to be put through to Joshua.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant sums of money on a prospective transfer.