Category Archives: Economic data
Could we see some more GBP strength? Where next for Sterling rates? (Alistair Ryan)
Sterling has made a fair bit of ground against most major currencies over the past couple of days. This seems to have come off the back of governor of The Bank of England Mervyn Kings Inflation Report yesterday. This was his last inflation report before he hands over the reigns to Mark Carney in July and he announced an improved growth forecast on the state of the UK economy. Since the start of the financial crisis this is the first time data has been revised in a positive manner. This is a very positive boost for the pound and although a lot of people expected it and it could have been marginally priced in to the markets we have still seen Sterling gain against the majority of currencies.
Jobs data out for the UK yesterday was a bit of a mixed bag. It was announced that although the number of unemployed people had risen, the overall percentage of people out of work fell. It is usually the way in the UK that as soon as some positive data comes out there is another data release out to counteract it. Although this may not be an extremely bad stat for the UK it does highlight that there is still a lot of work to do but we are going in the right direction.
I generally feel that we will see more Sterling strength in the near future as it seems that we are seeing a lot more positive data coming out of the UK at present. We have recently seen better than expected figures for Manufacturing, Construction and Services and I believe that unless something drastic happens in any of the main sectors the pound will gain some more ground.
If you have an upcoming currency requirement we have a number of different contract options that can help safeguard your funds against market movements. If you would like to speak with one of our specialist, friendly currency brokers then please contact me direct at atr@currencies.co.uk
Pound strength following King Speech (Steve Eakins)
Today, which is probably the busiest day this week has already provided a few surprises. It was this morning confirmed that France has re-entered a recession creating euro weakness, UK Unemployment is improving and then currently the current Governor of the Bank of England, Mervyn King, in his last speech seems to be talking the value of the Pound up. In summary GBPEUR rates have now risen from the 2 week low at the beginning of the day towards a near 4 month high we last visited 4 weeks ago.
So what next for GBPEUR exchange rates?
Near future – EURO buyers may want to hold off till tomorrow when we have the last big data release for GBPEUR this week when the Eurozone confirms their Consumer Confidence figures for April. The expectation is for this data to show a contraction so rates may climb further for GBPEUR following this news which is released at 10 am BST. Euro sellers may want to move before hand as a result.
Medium term – Next week we have UK Production Price Index, UK Retail figures, Bank of England minutes, UK GDP figures and UK Mortgage approvals. Expectations for these releases will be more concrete on Monday so keep reading here for the latest forecasts and updates on these releases. This should help highlight potential buy and sell opportunities when it may be the best time to trade through next week.
Longer term – A lot hinders on the new Bank of England Governor Mark Carney that starts his post at the end of June. He may want to come in with an instant impact changing interest rates or the current asset buying program. It may the beginning of July when we see this and is already expected to be an interesting event that may give direction to exchange rates for the following few months.
If you are in the currency market and are interested in a more personal view on how the above events could affect you, feel free to contact us on the normal number (01494 787 478) or myself personally, Steve Eakins via email at hse@currencies.co.uk
Many Market Movers in May! Can sterling go higher?
As we approach the halfway point of the month we see the pound holding some of the gains we have witnessed in April but still very much under pressure! Unfortunately there is very little on the horizon to indicate significant further gains this month. If you are selling pounds to buy another currency holding out for further gains could be very risky, current levels should not be easily dismissed. Here are some of the key thing to note if you are buying or selling which may affect your rate.
If you would like more information on a particular subject or on events surrounding your particular transfer please speak with me directly on jmw@currencies.co.uk
Will the UK leave the EU? Expect pressure on sterling due to political uncertainty. Markets and investors want certainty in their investments. Fears of the damage a split Tory government, the rise of UKIP and a broken coalition would do to UK business weighed on sterling yesterday. Can Cameron tackle the ghost of conservative past and deal with the question of Europe? It is doubtful I have to say and this will weigh down the pound.
UK Growth Last months data was impressive and welcome but 0.3% is not anything to get too excited about. True the latest data sets have all been positive but the marginal improvements on what were dire figures still have a long way to go. Ultimately the UK’s stagnant housing market (particularly outside London) needs invigorating – Construction is the main drag in recent years. The second revision of growth figures at the end of the month could easily be a market mover.
Depending on which currency pair you are trading there will of course be many other things to move the market. Looking in my crystal ball (which has been pretty clear lately) I cannot see significant gains for GBP against the majors. Maybe a cent or two? Once again I see more danger of things dropping as the confidence of the last few weeks wears off.
If you have a transaction to consider I would be interested to speak to you explain the market and offer our services with a view to getting you the best deal. For more information please email on jmw@currencies.co.uk
I look forward to hearing from you!
Bank of England Quarterly Inflation report, EU GDP figures and the Australian Budget. Busy week on the currency markets! (Mike Vaughan)
Sterling started the week poorly against a number of currencies falling against the Euro and US dollar but continuing its recent resurgence against the Australian dollar. This week there is plenty of data to keep anyone with a keen eye on the money markets with some of the notable data sets as follow:
- Today 09:30 BST - Australia will release its yearly budget. This will be keenly viewed as the Australian government faces questions about its handling of the economy ahead of elections later this year. With the economy having been affected by weaker global forecasts and in particular from China, for which the Australian economy is heaviliy reliant, the outcome of the budget could be very interesting. Some analysts say that while the mining sector has been the driving force behind Australia’s steady economic expansion, other parts of the economy have stagnated or grown much less quickly. A key reason has been the strength of the AUD and the RBA (Reserve Bank of Australia) have been open in highlighting their concerns and may act to devalue the dollar, potentially good news for those buying dollars.
- Wednesday 10:00 BST- anyone with an interest in the Euro should watch out for EU GDP figures. Figures are expected to stay at -0.9% but any deviation from the expected figure and watch out for volatility on Euro exchange rates.
- Wednesday 09:30 BST – UK unemployment figures expected to stay at 7.9%
- Wednesday 10:30 BST – Bank of England Quarterly Inflation report and Mervyn King press conference. The BofE publishes a report of the detailed economic analysis and inflation projections on which the Bank’s Monetary Policy Committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the following two years. Watch out for any clues with regards to QE, I personally believe the Bank will stay firm on its current p[olicies until the new governor Mark Carney takes over from Mervyn King in July.
- Friday 00:45 BST – Japan GDP release, expected to show an increase from a flat 0% to 0.7%.
- Friday 13:30 BST - to finish off the week on Friday we have inflation figures and unemployment data from the US at 13:30 BST.
As you can see we have plenty of data released for the rest of the week. To be kept up to date with the impact these data sets may have for your individual requirement then please contact me and I will happily run though my forecasts and run through the various contracts we can offer to help maximise your currency exchange. I am very confident I can help achieve a better rate than your current provider. Please call the office on +44 (0)1494 787478 or email me (Mike) with a brief overview of your requirement and I will gladly contact you to help with your money exchange. I can be reached at mgv@currencies.co.uk
GBP/EUR, GBP/USD, GBP/AUD exchange rate forecasts. Get help to maximise your currency exchange (Michael Vaughan)
As expected the Bank of England (BofE) decided to keep interest rates at a record low of 0.5% and decided against extending its Quantitative Easing (QE) programme.
This outcome was very much forecast and the market did very little as a result as many analysts expect little to come from the BofE until new governor Mark Carney takes over from Mervyn King in July. Following the release the National Institute for Economic and Social Research (NIESR) released its forecast for GDP for the last three months to include April, the figures showed a stronger than expected level of 0.8% continuing the recent positive tones coming from the UK, something that could lead to sterling strength against a number of major currencies.
GBP/EUR
Sterling exchange rates have shown a marked improvement against the single currency since the year low of 1.1370 in March. Since this time the market has peaked at 1.19 (a shift of 4.5%) but has now remained range bound between 1.1750-1.1850 since the start of May. But what now for GBP/EUR?
For me I believe the pound will begin to find further support and may break through the 1.20 barrier heading into June, however I believe when Mr Carney takes over his reign as the head of the Central Bank then I believe he will look to impose himself immediately and look to extend QE to help boost the UK economy further. Should we see this then I would expect Sterling exchange rates to fall back towards the 1.18 territory as a result. For this reason anyone looking to buy Euros I feel you may get better value in the weeks to come but those selling may wish to consider their options.
GBP/USD Exchange Rates
As against the Euro, sterling has seen a mini-recovery against the greenback rallying from the year low of 1.489 in March to 1.559 earlier this week. This again represents a 4.5% shift in less than two months and to me represents a strong buy opportunity.
For me I feel GBP/USD is reaching a peak and would expect levels to fall back towards the 1.52/53 level as again the pound is likely to come under threat from future expectations regarding QE. I also feel it is a matter of time before problems in Europe re-surface and the major benefactor is likely to be the USD.
For those looking at GBP/USD in the coming days watch out for a speech from Federal Reserve (FED) Chairman Ben Bernanke this afternoon at 13:30 – positive tones from Bernanke are likely to lend support to the US dollar this afternoon.
Has the Aussie bubble burst?
In the last month the pound has rallied close to 9 cents against the AUD following weaker sentiment from China, and the Reserve Bank of Australia cutting interest rates earlier this week. This is creating some great opportunities for AUD buyers a trend that may continue.
For anyone selling AUD I would still urge you to take advantage of rates that are historically still very favourable. The average trade price for GBP/AUD for the last year sits around 1.54, so with levels currently at 1.52 you are still ahead of the game. For me the current trend and sentiment from Australia is a concern and I would expect rates to move towards 1.55 as I feel the central bank is still concerned about the strength of the Aussie and the impact this is having on the value of Australian exports. I would not be surprised to see another interest rate cut within the next 3 months, something that could devalue the AUD further.
Should you have an upcoming money exchange to arrange and you would like more information on the currency service we provide please contact the office on 01494 787478 or email me (Mike) at mgv@currencies.co.uk
Where Next for the Pound? (Matthew Vassallo)
Good news for the UK economy has been sparse of late and despite the UK avoiding a further recession, it should be noted that our economy did only grow by a mere 0.3%. This is hardly an inspiring figure and not one that is going to breed investor confidence in the long-term. Many believe that this is merely papering over increasingly large cracks in the UK economy and the only reason we have seen GBP spike, is the on-going economic uncertainty that has engulfed the entire Eurozone region and sucked investor out of the single currency.
Personally I always felt that we would avoid recession by the skin of our teeth and whilst this has proved to be the case, predicting how GBP/EUR rates will fare over the coming months is becoming an increasingly difficult task. The recent volatility we have seen on GBP/EUR looks set to continue, as investors will be pulled between Sterling and the EUR depending on the latest set of economic figures, or the next doom and gloom speech by key political figures.
Despite the on-going negativity we should see the recent spike against the EUR and the USD as a major positive for all those looking to purchase those currencies. We have seen GBP/EUR rates spike over 2 cents in the past couple of weeks and we have seen GBP/USD move all the way through 1.55, when only a couple of months ago we were trading in the low 1.50′s. When you have an economy as weak and fragile as our own any positive movement should be valued and if I were buying either of those two currencies, I would be looking closely at my options based on the current market levels.
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Pound Sterling exchange rates – Once again Thursday is the day that may be key (Daniel Wright)
Sterling exchange rates have been reasonably static lately against the major currencies however tomorrow has the potential to be quite a market mover.
We have Australian unemployment figures out overnight tonight followed by Industrial and manufacturing production figures for the U.K tomorrow at 09:30am. The unemployment figures have the potential to shift rates against the Australian Dollar and the production figures may affect the Pound against all majors.
Most importantly we have the Bank of England interest rate decision and any further news on more Quantitative Easing will be extremely key. For those of you that have follwed the market over the past few years it seems that every time Sterling is performing well and heading into the right direction the Government or the Bank of England step in and do something to knock it back down again so you must be aware this is the perfect time for them to do so.
Should tomorrow pass without any surprises I think the Pound may be set for another positive month now that the potential recession is out of the way and focus has turned to other troubled economies hopefully Sterling will become a currency of choice once again.
If you have an upcoming currency transfer involving buying or selling the Pound then feel free to contact me directly as I can assist you with not only getting the very best exchange rate but also a full round service of making the transaction as smooth as possible. If this sounds of interest then please email me directly djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you.
What will happen next week on sterling exchange rates?
An excellent run of form for sterling has seen us hit a 15 week high against the euro and 11 week highs against the US dollar, Australian dollar and Canadian dollar. Is this going to get much better or has this rally run out of steam?
I think that this rally has run out of steam but that does not mean rates are going to just crash back down. Sterling has been given a boost by the improved GDP stats (0.3% growth for Q1) which removes some of the more immediate concerns regarding sterling. In order for the pound to press on we need to see more positive data and next Thursday could be a trigger with Industrial and Manufacturing data plus the NIESR (National Institute of Economic & Social Research) estimate of GDP for April.
If you are considering moving sterling in the next few weeks next week could be fairly pivotal in shaping the future direction for sterling. It is important not just for sterling but due to the releases affecting other currencies. Here is a quick run through of a couple of things to beware of on rates next week.
EURO – Mario Draghi and the ECB (European Central Bank) are giving a couple of speeches next week including the ECB Monthly Report. There was a story today that the ECB were playing down speculation yesterday rates may be cut further. If any such bold statements are made I expect the Euro to strengthen, but not by much.. The Euro is in the firing line right now. If you are considering any GBPEUR or EURGBP transfers in the future please feel free to contact me for a forecast specific to your requirements. jmw@currencies.co.uk
USD – An improved employment outlook for the US today helped the USD to strengthen against sterling but unless the pound comes under pressure I expect GBPUSD to push higher. A speech next Friday by Chairman of the Federal Reserve Bank in the US, Ben Bernanke could be crucial.
AUSTRALIAN – The Reserve Bank of Australia meet for their monthly meeting next Monday evening where they decide on economic policy. The statement after their meeting may be more indicative of policy as no change is expected. Next week we also have Australian employment data which could move rates. On the whole I expect rates to remain good for buyers, sellers of AUD to buy GBP may wish to move sooner if they don’t see improvements.
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