Category Archives: Sterling strength

BOE Interest Rate Decision and QE could Weaken the Pound (Daniel Charles Johnson)

Sterling Overview

With the appointment of Theresa May as new Prime Minister and a firm cabinet now in place. I would expect a gradual rally for Sterling against most major currencies. There is however the Bank of England (BOE) interest rate decision on 4th August. There is a high chance of a rate cut from the already record low of 0.5% to 0.25%. This is common knowledge so I would not expect a massive drop in the Pound’s value as it may well be factored into the market. What could damage Sterling is if Mark Carney the governor of the BOE decides to implement Quantitative Easing (QE). QE is essentially pumping money into an economy in order to stimulate growth. He has £150bn at his disposal so if there is an announcement expect the Pound to fall in value. If you have to move short to medium time it may be wise to move before this date.

GBP/AUD

If you are an Aussie Dollar seller it is difficult to justify hanging on until 4th August. There is a rate decision due down under on the 2nd August and there is the chance of a cut which will weaken the Aussie. With current levels the best since September 2014 I would be looking to take advantage of current levels. To procrastinate could prove costly.

If you are an Aussie buyer potentially you could wait for the decision on 2nd August to see if there is a cut and GBP/AUD moves in your favour and then trade after the announcement on 2nd or 3rd avoiding a potential fall on 4th August.

GBP/EUR

Mario Draghi, the Head of the European Central Bank today announced the possibility of a QE increase later in the year. This has seen GBP/EUR to move above 1.20. If you are a Euro buyer I would be looking to move before the 4th August, the highest we have been since the EU referendum is 1.21 so 1.20 doesn’t look like a bad time to bite the bullet.

Euro Sellers wait until after the interest rate decision and then get your trade done. Following Draghi’s comments the Euro is in a precarious position, especially when you throw the Greece and Italy situation into the mix.

GBP/USD

USD buyers, trade before the 4th August. Sellers wait until the decision on the 4th then trade. You are currently selling at the best levels since 1985.  It is a no brainer.

If you have a currency requirement it is crucial to be in touch with an experienced broker. The timing of your trade is key during such a volatile  times, If you have a veteran broker on board he can keep you up to date with what is happening in the market to help you make an informed decision. If you would like me to help with your trade I will be happy to help. Let me know the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the UK and as such I am in a position to beat nearly every competitors rate of exchange. You would be looking at around a 4% saving in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog and I look forward to hearing from you.

 

Will the pound keep rising? GBPEUR and GBPUSD Forecast

The answer to this question is probably not. That is because whilst we have just lately had some good news to help sterling find a boost, there are still a number of challenges ahead which sterling will need to overcome in order to remain at this better rates. some of you might laugh at me calling any sterling exchange rate as better but we are much better on most currency pairs than the lows seen only a couple of weeks ago. GBPEUR is now back over 1.20 and GBPUSD has recently hit 1.34. The recent sterling strength is down to two key factors, the appointment of Theresa May and also the lack of any interest rate cut by the Bank of England last week. Theresa May has made clear any Brexit negotiations or invoking of Article 50 are long term so therefore despite the recent bounce for the pound I think economic rather political factors will now play a much greater role on sterling exchange rates. The prospect of an interest rate cut and any QE from the Bank of England (which are predicted for as early as August 4th) could be the big drag between now and Christmas. To learn more on the implication of this on your currency exchange please email me Jonathan on jmw@currencies.co.uk

GBPEUR 

If this happens then the pound could easily retest the lows of 1.15 seen at the beginning of July, I would suggest a new bottom could easily be reached in the lower teens or perhaps 1.11-1.12 but for this to happen there would need to be some very bad economic data and recession for the UK. This lower view was the consensus only last week but financial markets and sterling have benefitted from a relief rally as we avoid the ‘worst case’ scenarios and against their own indications the Bank adopts a more cautious tone.

If the Bank of England surprises markets and fails to adopt any stimulus measures in August and September we could easily see sterling rise higher over 1.20 settling in the lower 1.20’s. There are other factors keeping the Euro weaker including the Italian banking issue plus uncertainty over Greek debt repayments. The Euro is still not performing too well struggling against most currencies except of course the pound. 1.25 seems very distant but couldn’t be ruled out should investor concerns over the Euro flare up again and the pound finds further favour.

GBPUSD

As with GBPUSD any QE or interest rate cut by the Bank of England is the more immediate focus and this would send sterling down to retest the 1.27 level seen two weeks ago. Depending on the amount of QE, extent of interest rate cuts or any worse economic news I wouldn’t be wholly surprised to rule out 1.24-1.25. Some forecasters have GBPUSD at 1.20 by the year end but I don’t think that is likely. Rates of 1.25 ish were on most forecasters predictions but the change of tone from Theresa May’s appointment and the lack of cuts so far has helped the pound.

GBPUSD could easily rise to 1.35 territory if the Bank of England fail to act once again and with the US Election in November investors will soon start to begin pricing in the prospect of a Donald Trump Presidency. Such uncertainty combined with a stable pound could possibly see 1.40 again but as with GBPEUR hitting 1.25, it seems very distant.

If you have a currency exchange buying the pound, Euros or dollars then it makes sense to explore all of your options. Every situation is unique and we offer a free information service to help you plan and manage your exposure to the currency markets. I Jonathan Watson work as Associate Director and Chief Analyst for one of the UK’s top currency brokerages and would be very interested to hear from you and offer some assistance with any bank to bank transfers in and out of the UK for business or personal clients from £10,000 to the multi millions.

For more information please email me Jonathan Watson on jmw@currencies.co.uk, I am very confident I can give some useful insight and if you need it a very sharp exchange rate that will save you money over the banks and typical currency broker exchange rates. Any information is completely free, please email me and I will get back in touch immediateley.

 

Will Sterling’s Recovery Continue? (Matthew Vassallo)

Sterling has gained value against all the major currencies during Wednesday’s trading, following this morning’s official UK Unemployment rate. The figure of 4.9% came out better than expectation and this helped to boost Sterling’s value against the EUR & USD.

GBP/EUR rates spiked back towards 1.20, hitting 1.1990 at today’s high, whilst GBP/USD rates reached 1.3197 before slipping slightly by close of European trading. Whilst the recent improvement for the Pound has been welcomed by many, I’m still not convinced that we will see a sustainable recovery under current market conditions.

The catalyst for Sterling gains was brought about following last week’s decision by the Bank of England (BoE) to keep UK interest rates on hold at 0.5%. This, alongside the political stability bough about by Theresa May’s appointment as Prime Minister, has helped boost Sterling’s value and the key question now is will we see this recent improvement continue and if so will it be sustainable?

Personally I feel the Pound is likely to find life tough going for the most part, at least until we are given a clearer picture of how and when we are going to facilitate our ‘Brexit’ from the EU. This does not mean that the currency will move in a straight line and there will be opportunities for both buyers and sellers but my overriding feeling is that we are unlikely to see an aggressive spike, so therefore it may be wise to protect any short to medium-term Sterling positons and not risk a further downturn, in what has become an increasingly fragile and uncertain market.

If you have an upcoming GBP 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 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Inflation and unemployment figures key for where the pound heads next (Daniel Wright)

We have seen a  fairly quiet day on the trading floor today with little in terms of economic data for the markets to feel off of, however the next two days there are a few big releases for the markets to get their teeth into.

The Pound has been sat just above and just below what I see as a pivotal point against the Euro of 1.20. I feel that if we see Sterling break above this level then the Pound may push up by a couple of cents.

Tomorrow morning we have inflation data out at 09:30am and with inflation being one of the key factors involved in interest rate changes, investors and speculators alike will be watching  to see the results.

Following on from this we have the unemployment rate on Wednesday morning, also due to be released at 09:30am. Expectations are for unemployment to remain steady at 5% so any deviation from this level will no doubt lead to the Pound being particularly volatile.

I personally still feel that the weakness for Sterling will not last, of course there are banana skins ahead that could lead to the odd drop off, but in my opinion Sterling has slightly overshot the runway and should be a little stronger than it is at present.

We do not only offer out up to date and insightful market information but if you have a currency exchange to carry out involving any of the major currencies and you would like to speak with me personally then feel free to email me (Daniel Wright) on djw@currencies.co.uk – I deal with clients buying and selling properties overseas, business transactions, high-net-worth individuals and premier league footballers on a daily basis so would be happy to assist you too in the strictest of confidence.

It only takes two minutes to email me on djw@currencies.co.uk to get a comparison and those few moments spent may save you a great deal of money as it is very rare that I cannot better someones rate of exchange and in this current market it is even more important to make the most of your money.

Buying Euro and Dollar rates finish the week under pressure (Joshua Privett)

After a day of relative stability for buying Euro and Dollar rates before the close of play on Friday, they were sudden falls on the final part of the afternoon which created a concerning picture for some.

The devestating and tragic attacks in Nice understandably hit buying Euro rates the heaviest, with a full Cent drop in the value of the Euro early Friday morning until it was confirmed that the threat had been contained and the terrorist killed.

In total the Pound has had a net gain of around 3% for buying Euro and Dollar rates since the beginning of last week. The stability came from the sudden announcement of a new Prime Minister and Government to deal with the Brexit and the current shocks from the referendum reverberating through the economy.

Yet, with no new news, the Pound still struggled late Friday afternoon. This is down to speculative trading more than anything else.

On Friday afternoons you tend to see the phenomenon of profit-taking on currency markets. Speculators at high street institutions who move hundreds of millions each day are the true market movers, and many wish to consolidate their profits to end the week.

Whilst the Pound has recovered somewhat, it is only a week since the heavy slides of last week were last recorded. The Dollar seems to still be the currency of choice which is why we saw its value saw as the week ended, with serious capital flowing into the USD.

Yet this is not necessarily the end to the Pound’s strengthening trend. Junior Ministers were appointed in the UK over the weekend. The likes of Australia have called immediately for trade deals with the UK, the positive news to counteract the recent negative tirade hasn’t ended.

USD and Euro sellers are still seeing some fantastic opportunities, and may be wise to move sooner rather than later to secure those gains.

I can provide a live, competive quote for your exchange, and can describe the process of bringing funds back to the UK at more competitive rates than those offered by the high street banking world.

Simply email me on jjp@currencies.co.uk, and I can also assist Euro and Dollar buyers to create a strategy for your transfer to maximise your currency return.

Sterling Euro rates and when will the Bank of England change monetary policy? (Tom Holian)

The Pound saw its biggest daily gains in the months during Thursday’s trading session when the Bank of England confirmed that they were keeping interest rates on hold. Out of the 9 members of the Monetary Policy Committee 8 voted to keep rates on hold.

Personally this did not come as a surprise as I think owing to the recent change in leadership with Theresa May becoming Prime Minister this week any change in policy could have caused further unnecessary volatility for the Pound which had just started to recover agains both the US Dollar and the Euro.

Next month however could be more likely that some form of monetary easing could take place. Bank of England governor Mark Carney has already been quoted saying ‘some monetary policy easing will likely be required over the summer.’

Indeed, the minutes of the meeting stated that ‘most members of the Committee expected monetary policy to be loosened in August.’

I fully expect the Bank of England to introduce further Quantitative Easing next month but the question will be how much?

The central bank has already pumped in a total of £375bn into the markets and whenever they have brought it in it has weakened the Pound.

With the political landscape a little bit more certain in the UK this could help the Pound recover from its recent lows vs the Euro.

Next week the focus turns well and truly back to economic data when the UK announces the latest Consumer Price Index which is a measure of UK inflation levels. The expectation is for 0.4% year on year so anything less could reinforce the need to either cut interest rates or add further QE at next month’s meeting due to take place on 4th August.

If you’re worried about what may happen to exchange rates over the next few weeks and you need to either buy or sell Euros it may be worth considering buying a forward contract which allows you to secure an exchange rate for the future.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

 

 

Pound rallies as the Bank of England leave rates on hold – Boost for Sterling exchange rates (Daniel Wright)

Today we have seen the Pound gain value against every major currency following the Bank of England members voting 8-1 to keep interest rates on hold.

An interest rate cut had been expected by the financial markets and somewhat priced in so the fact that this did not happen led to the Pound gaining back some of the value it had lost.

For anyone looking to buy foreign currency this is a welcome result as your up and coming currency purchase has just become a little cheaper! One word of warning is that Mark Carney did state that easing would more than likely have to happen next month so don’t feel like we are not going to see an interest rate change or other easing bought in, it has just been merely delayed for the time being.

I would imagine the recent change in the political position has had an impact in this decision and that the Bank of England now wish to hold fire on making any sweeping moves to see how the land lies once the dust has settled.

We deal a lot with clients looking to buy or sell overseas property and I had a good long chat with the managing Director of Girasol Homes, a property finder for clients looking to buy property in Portugal and Spain (they do also cater for those looking to sell). We discussed the current market conditions and everything really is a lot more positive than many people have been led to believe out there in the overseas property market.

Those looking to sell have seen a welcome boost in the value of their Euros should they need to bring money back into GBP and those looking to buy  are only a few cents from the rolling ten year average for GBP/EUR so the market really isn’t in that bad a place. Those buyers that do have concerns about market conditions could also approach the possibility of hedging their position a little with a mortgage, this appears to be an inceasingly popular approach.

Should you be looking to buy or sell in Spain or Portugal and you would like to speak with Nigel about the market or how he will be able to help then feel free to visit www.girasolhomes.co.uk or email him at nigel@girasolhomes.co.uk quoting Pound Sterling Forecast so he knows where you found him.

Back on the currency front we have a fairly quiet day for most currencies now but overnight we have Chinese growth figures which should impact the Australian Dollar, and European inflation/trade balance figures at 10:00am tomorrow.

Mark Carney, Governor of the Bank of England is speaking tomorrow at 1pm so for anyone with an interest in buying or selling Sterling it would be well worth you getting in touch with us directly so that we can keep you in touch with the action.

Not only do we ensure clients get up to the minute market news but we all work for a brokerage turning over roughly a billion pounds worth of currency a year, meaning we could probably get you a better rate of exchange than your current provider or bank due to our buying power.

If you would like to get a quote or to find out more information about our award winning rates and customer service then feel free to email me (Daniel Wright) directly on djw@currencies.co.uk and I will be happy to get in touch personally.

When is the best time to exchange my pounds?

Today is a very important day for the pound with the Bank of England meeting to discuss their latest policy decisions. The pound is very likely to slip lower if the Bank of England announce an interest rate cut. If you are buying or selling the pound there are various outcomes to consider, most of which look to be sterling negative.

We could be looking at an Interest rate cut of 0.25%, an interest rate cut of 0.5% and some Quantitative Easing. If you are expecting the pound to rise you need the Bank to refrain from any of the above, this would see the pound sharply rise in value. This is unlikely since Mark Carney has already hinted at cutting and to not do so with damage his credibility. If you have a transfer to consider and require some assistance with the timing and planning of any pound sterling currency exchanges please feel free to contact me Jonathan on jmw@currencies.co.uk for further information.

Whatever happens the events of today and any commentary will help shape the pound for the next few weeks as there is looming uncertainty at present over just where the Bank of England Sterling stand on the economy and how they view recent events. Exchange rate continue to swing wildly with no real direction being established, just as one trend is emerging something happens to alter the forecast and the rates change again. Just this morning GBPEUR was at 1.2045 but now it is at 1.1860, this big shift lower is I believe in anticipation of what the Bank of England will announce tomorrow. GBPEUR could trade between 1.14 and 1.20 depending on what the Bank announce. GBPUSD has hit 1.33 but could easily roll back down to 1.25, my top end on GBPUSD would be 1.35.

There are so many different possibilities from what lies ahead for the pound it is impossible to cover them in one post. All I would say is that if you have a transfer to consider making some plans is vital, we are here to help with the planning and the execution of any deals. I am very confident I can undercut any rates you are receiving elsewhere, please email me on jmw@currencies.co.uk and let me know what you are looking to. Please note we specialise in bank to bank currency exchanges over £10,000 for overseas property deals and business transfers.

Jonathan Watson

Sterling Tumbles Ahead of BoE Interest Rate Decision (Matthew Vassallo)

GBP had spiked this week, providing those clients holding the Pound with some much needed respite. Sterling had made gains across the board, benefiting from some political stability, with Theresa May today being confirmed as the UK’s new Prime Minister. This has helped to alleviate some of the pressure which had been building since the Breixt result and David Cameron subsequently resigning his post as PM.

This market uncertainty has sapped investor confidence in the UK economy and a result the Pound lost a significant amount of value in a very short space of time. Now that facet has been removed it was no real surprise to see the Pound gain some traction but I am still wary of a sustainable recovery under current market conditions. This feeling was underlined by this afternoon’s market developments, with Sterling taking a hit across the board. Whilst the gains from earlier this week are still providing EUR & USD buyers with better levels than they may have expected, it seems as though investors have started to factor in a prospective interest rate cut tomorrow.

BoE governor Mark Carney has been quick to highlight the pitfalls facing the UK economy following the EU referendum decision and has alluded to the fact that we will need some sort of stimulus to navigate the uncertain times ahead. With a rate cut to 0.25% likely either tomorrow or next month and the chance of further Quantitative Easing (QE) being introduced, I expect the recent Sterling recovery to come under further pressure should the scenario unfold as I expect.

If you have an upcoming GBP currency requirement, why not contact us directly. If would like to discuss the current market conditions and forecasts with a currency expert, or simply wish to compare our award winning exchange rates with your current provider, then I can be reached on 0044 1494 787 478 and just ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currnecies.co.uk

Sterling Euro rates break past 1.20 owing to leadership change (Tom Holian)

Sterling exchange rates have risen dramatically during this week’s trading vs the Euro with the news that Theresa May will be taking over as Prime Minister as of later today.

The leadership race was previously set to take 9 weeks with May going up against Leadsom. However, Leadsom withdrew earlier this week and this meant May would take over.

The political stability has helped to strengthen the Pound vs the Euro and the US Dollar as it means that confidence has returned to the British economy and therefore Sterling exchange rates.

There is potential for further volatility tomorrow with the UK’s next interest rate decision.

Bank of England governor Mark Carney was very pro-remain and has warned that a vote to leave the European Union could be damaging for the UK.

He has also hinted that the UK could cut interest rates in the near future so any change tomorrow could see Sterling’s gains against the Euro quickly eroded.

However, I think it would be a bit too early to interfere with monetary policy just yet as with the political landscape a bit more certain I think any policy change is unnecessary.

Turning the focus to the Eurozone the Italian banks are struggling at the moment and the ECB will likely have to do something and this could cause the Euro to weaken if the problem is not dealt with swiftly.

Indeed, the total amount that international banks have lent to Italy is as much as €550bn.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

I look forward to hearing from you.

Alternatively call me directly and ask for Tom Holian 0044-1494-787-478.

 

 

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