Category Archives: Sterling strength
Sterling reached its highest level against the single currency since August 2012 reaching a peak of 1.273 this afternoon – is this the calm before the storm? With the Scottish independence vote well under-way the market is eagerly awaiting the result of the vote expected for release early Friday morning (expected around 07:00). A yes vote is likely to be catastrophic for the pound with some analysts suggesting as much as a 10% drop in value for sterling, in contrast a no vote will bring a sigh of relief to many and I would look for the pound to fund support in excess of 1% across the major currencies.
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As against the Euro, sterling has continued its strong rally against the Australian dollar having shifted 10 cents in last 10 days (5.8%). This makes a difference of AUD 20,000 on a £200k transfer.
Data from Australia has been relatively light this week highlighting how dominant sterling has been and just how the Scottish independence vote is influencing the value of the pound. With voting having started this morning and the results scheduled for 07:30 tomorrow morning, the next 24 hours are likely to be extremely volatile. I for one believe the ‘no’ camp will prevail and this is bound to lend further support to sterling and I would look for a shift towards 1.85.
Overnight the RBA bulletin gave little insight as to future monetary policy but I still believe the RBA will be uncomfortable with the value of the dollar and this 10 cent shift will have been a welcome move
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The day is finally here for the eagerly anticipated Scottish referendum and with recent opinion polls showing the votes still very close it will provide the currency markets with potentially large swings in either direction for Sterling Euro exchange rates. Indeed, less than 2 weeks ago following a poll released over the weekend we began the trading session with Sterling having fallen by 1% against both the Euro and the US Dollar.
It appears at the moment as though the No vote will succeed which is good news for the United Kingdom but the uncertainty that is still around will likely discourage investors from holding the Pound during today’s session so we could see big currency movements both today and tomorrow.
Even if the No vote does win it is likely that a significant amount of Scottish people will be disillusioned with the process which is likely to increase political uncertainty. Indeed, if Cameron’s recent pledge to allow Scotland more power in Westminster where then will Wales and Northern Ireland stand?
Currency does not like uncertainty and with the votes being counted over the next few hours today is likely to be very volatile for anyone with a Sterling requirement. Therefore, even if a No vote does go through don’t expect Sterling to rally significantly.
If you have a currency transfer to make and are worried about today’s referendum and the impact it may have on your exchange rate then contact me directly for a free quote Tom Holian firstname.lastname@example.org
The pound looks likely to continue to rise as the outcome of the referendum is priced in more heavily to be a No vote. Investors are betting that it will indeed be a No vote and this should cause GBP strength. I personally feel a Yes vote is being discounted far too easily…
I think we are looking at greater chance of a Yes vote for the following reasons
- Demographics of the people being polled. I think naturally the more affluent Scots will be the ones most likely to respond to the polls. The Yes voters are less likely to care about the economic arguments and favour the Yes vote for Nationalistic and emotive reasons. I
- The ‘Braveheart’ factor. Once put in the booth and owing to the way the question is framed will many a Scot feel inclined to support their Scottish heritage or the less understood British roots?
Some reports have factored the losses for sterling at 10% if it is a Yes vote. I personally would expect around 5% losses if we see the Yes vote but with a further decline longer term once the vote has been digested. Sterling is favoured because they expect the UK to raise rates next year, losing Scotland may lead to more QE and we could be at 1.15 on GBPEUR by Christmas, 1.50 on GBPUSD.
I think the Yes vote is being too heavily discounted and suggest anyone considering making a currency exchange in the coming weeks and months utilise a Stop / Loss and Limit order. Simply put this guarantees you wont lose more than you need and if it spikes higher you get the better rates.
To discuss strategies to maximise your exchange rate please contact me Jonathan on email@example.com. I work as a specialist foreign exchange broker in the UK assisting clients all over the world manage their FX strategy.
We have seen Sterling exchange rates move by as much a 2% during the course of last week’s trading against the Euro as the news about the Scottish referendum dominates the headlines. As we started last week we saw a fall of 1 cent against the single currency following the release of a poll suggesting that the Yes vote was ahead.
However, with the three leading political leaders actively canvassing for more votes north of the border and many large businesses now moving towards the ‘No’ vote I think we could see a vote on Thursday to keep the United Kingdom together.
Already, John Lewis, Asda & Marks and Spencer have suggested that business costs will rise if Scotland gains independence and with such uncertainty surrounding the whole issue I think we’ll see Sterling strengthen during this week.
However, the one thing that currency dislikes is uncertainty and with just a few days to go before the referendum I think we could still see a few large swings on Sterling exchange rates which highlights the need to use a currency broker who can keep you up to date with exchange rate movements but also explain how Limit Orders can work to your advantage.
If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly for a free quote Tom Holian firstname.lastname@example.org
It’s been a volatile week for GBP, with uncertainty surrounding the Scottish referendum having a negative impact on the Pound. We started the week with news of a poll that had the vote at 51% in favour of Scottish independence and this sent the markets into panic mode, with GBP/EUR rates dropping by over a cent. Since then we have heard mixed opinions from various figureheads but it does seem as if the initial poll was distorted and in fact the No vote was still the preference of the majority.
GBP/EUR rates are now reflecting this opinion, with a move back towards 1.26 during yesterday’s trading. We’ve also heard from Bank of England (BoE) governor Mark carney this week, who indicated we may see an interest rate hike in the UK by Spring 2015. This is the first time he has given a specific timeframe and this news also helped to support Sterling recovery, from the early week losses against both the EUR & USD.
GBP/USD rates have also seen a number of spikes this week with the USD still holding firm in the low 1.60’s, as it continues to realign itself against GBP after a rocky few months. It now seems inevitable that we will see GBP/USD head back below 1,60 on the exchange and I wouldn’t be surprised to see this before the end of the year.
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Market volatility set to continue in the run up to the Scottish Independence vote on the 18th (Mike Vaughan)
Sterling exchange rates have found some support today as the latest poll for the Scottish independence vote suggested the vote for no was creeping ahead of the yes camp. This volatility is set to continue in the run up to the vote on the 18th.
With so much focus on this vote it is easy to forget the important data releases that are still scheduled. Tomorrow’s data is focused mainly on the Euro Zone and US with employment figures and industrial production data released by Eurostat at 10:00 tomorrow morning, followed by the important US retail sales data state side at 13:30.
Retails sales data is expected to show a good improvement and should in theory lend support to the greenback. It is important to keep an eye on all data sets as it is very easy to simply focus on one area. Of course the Scottish referendum vote is the main driver for sterling currently but should you like an overview of other important releases and the potential impact they might have on your currency transfer then please email Mike at firstname.lastname@example.org
Following the pounds losses earlier this week (due to Sundays poll suggesting the ‘yes’ vote was taking the lead in the Scottish referendum) the pound has rebounded five cents or nearly 3% since Monday. The move came about as the latest opinion poll puts the ‘no’ vote at 53% - for me the vote is likely to be a no and it is this that I believe will lend more support to sterling and push levels back though the 1.80 level. For this reasons should you be selling AUD then current rates should still look like an opportunity.
Overnight the Australian unemployment data fell to 6.1% from 6.4% but did little to affect the AUD exchange rate suggesting the current market is dominated by the movement of sterling. This volatility is set to continue for the next week until the vote passes on the 18th.
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With just seven days to go before the Scottish referendum takes place we have already seen over a 2 cent movement since the close of business on Friday for Sterling Euro exchange rates. This makes it even more crucial to instruct a currency broker to help you with a transaction if you’re thinking of moving currency over the next few days.
Using stops and limits will help to protect your exchange rates any may help you achieve a better price when buying or selling Euros.
Last night a new poll released by Surveynation showed that the ‘No’ vote is ahead with 53% of the vote so far which has helped Sterling to strengthen by 0.5% overnight against the Euro.
I still expect a few large currency movements to come over the course of the next few days as the uncertainty will still continue but looking at previous referendums and elections there is often a lot of hype but then the vote becomes very clear.
My personal opinion is that I think we’ll see the UK stayed united and especially with the 3 main party leaders up in Scotland to support the unity.
Clearly the Scottish vote is taking the limelight at the moment in terms of its influence over Sterling exchange rates at the moment but it’s important not to forget that the ECB cut interest rates to just 0.05% only last week.
The single currency is likely to remain under pressure as QE could still be increased in the Eurozone in the future. If you can remember what happened in December 2009 we saw Sterling fall by 10 cents during the month following the announcement of QE.
If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly for a free quote. Tom Holian firstname.lastname@example.org