Category Archives: Sterling strength
It’s been a pretty quiet day today with very little data out of note except in Canada, where inflation and sales figures were slightly higher than forecast helping the Loonie claw back a little bit of ground against the pound from earlier trading, although rates are still pretty attractive to buyers.
To this end it would be worth looking into next week for the main data releases that may affect your currency purchase.
For the Aussie Dollar we have a speech by Glenn Stevens overnight Monday, followed by Inflation figures in the early hours of Wednesday. The Aussie has also clawed back a bit of ground versus the pound compared with the last 48 hours however I expect the see-saw to continue in the short term until one or other central bank makes a decisive policy change.
For the US Dollar we have CPI data on Tuesday afternoon and Durable Goods orders on Friday- US data recently has been very disappointing so it will be interesting to see if this can turn at all. At some point it must surely and force the Federal Reserve into a slightly more hawkish stance, but until it does Cable is offering a great buy.
It is a huge week for sterling next week as the pound made big gains recently particularly on the back of this weeks high inflation figures. However the Bank of England Minutes are published on Wednesday so we will get to see whether any members did indeed vote to hike rate this month. Last month was a unanimous 9-0 in favour of holding interest rates steady despite some calls and indicators to hike. If it is the same on Wednesday it could suggest we are still a way off an interest rate rise and the pound may give up some of its recent gains. However any members voting to hike could give sterling another boost. We also have GDP for Quarter 2 due on Friday- if this shows the UK economy is still picking up then it will likely consolidate the pounds position and put it in line for further gains.
There is very little European data out next week so I expect the Euro to remain under pressure until the next ECB rate decision rolls around, as investors are nervous what the ECB may do.
Finally the Reserve Bank of New Zealand announce their latest rate decision on Wednesday evening. The Kiwi has fallen lately as some feel calls for another rate hike may be wide of the mark so expect to see a bit of volatility here.
If you need to make a currency transfer and would like assistance to make sense of all the market information and how it may affect your currency purchase, feel free to email Colm at firstname.lastname@example.org and I would be happy to explain how our services work and how we can get you the best exchange rate.
Sterling has started he day on a relatively quiet note with the only notable shift being against the Australian Dollar having lost nearly 1 cent between the high and low. Today is a quiet day in terms of any data and I would expect the pound to remain relatively stable against most majors.
Following yesterdays suspected shooting down of a Malaysian airline it is difficult to predict the impact this may have on the markets and may create some volatility as the events surrounding the tragedy unfold. Keep in contact with your broker for updates on the market.
Looking ahead and the main focus for me will be the Bank of England minutes scheduled for release on Wednesday next week. The report will give insight as to how the nine members of the MPC voted in relation to interest rates and will also give clues as to future monetary policy. What the market is looking for is clues as to when the bank is likely to raise interest rates with some analysts forecasting a rate hike during Q4 of this year. For me I still believe the bank will wait until 2015, but it is this speculation that has pushed the pound to a near two year high against the Euro and a six year high against the US dollar. For me I believe this trend is likely to continue and I would expect more value from the pound in the coming weeks.
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Sterling has remained above 1.26 during today’s trading session following a good start to the week.
UK Inflation data on Tuesday came out at 1.9% which has increased pressure on the Bank of England to raise interest rates earlier than the markets currently expect. UK unemployment has fallen to a 6 year low as confirmed on Wednesday which has also sent Sterling to its highest level against the single currency since August 2012 creating some excellent buying opportunities.
One potential hazard concerning these levels on GBPEUR is that if the rates remain too high for too long this means that it could negatively affect British exports which in turn can harm growth for the British economy. Therefore, it could be argued that rates may start to fall soon.
Personally, I would expect Sterling to remain strong for a while as the data out recently has in the main been very positive and global investors are choosing Sterling.
Current account data is due tomorrow morning which could impact GBPEUR rates early in the morning so if you’re thinking about moving funds then feel free to send me an email tonight and I’ll respond in the morning.
Timing a trade is crucial in order to maximise exchange rates which highlights the importance of using a currency broker. If you would like 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
GBP/EUR rates have moved back through 1.26 on the exchange this week, moving the currency pair up to a two year high. It looked as though Sterling may come under pressure yesterday when UK employment figures were released, with average earnings coming in worse than expected. It quickly recovered however and with unemployment figures holding firm at 6.5%, it is likely the Pound will continue to find support around the current levels.
Looking ahead to the end of the trading week and there is little data of note for the UK. This morning we have some inflation data out for the Eurozone, which could prove to be a key market mover if figures come outside expectation.
GBP/USD rates continue to hold firm above 1.70, despite yesterday’s announcement by FED governor Janet Yellen that the US economy was improving. GBP/USD rates have been trading above 1.70 for some time now and every time the USD spikes and it seems pressure will be on this resistance level, it quickly runs out of steam.
GBP/AUD rates have moved back through 1.83 this week and close to a 3 month high. GBP has performed well against the AUD recently but as yet, we have not seen levels return to the four year highs witnessed at the turn of the year. Personally I feel this is unlikely to happen in the short-term, even more so following the release of the latest Chinese GDP figures. These were released yesterday and showed an improvement from Q1, news which has boosted the AUD this morning and could help to push levels back below 1.82 on the exchange.
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Sterling has another positive day against most majors (Daniel Wright) Why did inflation data lead to Sterling strength?
The Pound has had a fairly good day on the market once again with a further small improvement against the Euro pushing the GBP/EUR exchange rate extremely close to a two year high which makes it an extremely tempting time to secure Euros for the purchase of property overseas or indeed for any business requirements.
I have had many clients this week decide to lock into their exchange rate on a forward contract to make sure they do not miss out on this current spike should the Pound drop away again and it is indeed turning into a very prudent approach, as many of those clients agreed to buy their property in Europe when the rates were a lot worse.
As an example, if you were buying €120,000 three weeks ago it would have cost you roughly £3,000 less now – This could pay for you to start furnishing your new holiday home or indeed pay for flights over there and back ten times over! To lock into a rate of exchange you only need to have a small deposit available so you do not even need the full availability of funds and you can lock in your rate for anything up to a year – Feel free to email me directly on firstname.lastname@example.org for more information on how to take full advantage of this handy contract type and I will be happy to answer any questions or queries you may have, along with helping you book something out if you wish.
The reason we saw the main spike yesterday was all due to a climb in inflation. A way to combat high inflation is to raise interest rates and generally a hike in interest rates can be seen as positive to the currency concerned. With the markets moving on rumour as well as fact this high inflation level did spark investors to believe that rates may go up earlier than first thought.
Today we saw unemployment figures improve a little for the U.K to 6.5% however this was pretty much cancelled out by the fact that wage growth was a little worse than expectations and the Bank of England have also stated they need to see wage growth out weight inflation for a period of time before they feel that the recovery is on top form and they really can start to move interest rates up so this was a minor setback.
We do not have a huge amount left to come out this week for the U.K however one release to watch out for, for anyone following the Euro we do have European inflation data out at 10:00am.
If you have an upcoming transfer to carry out and want to get the best exchange rates along with great customer service and knowledge of the markets then email me (Daniel Wright) directly on email@example.com I welcome all contact for bank to bank transfers however I am afraid I cannot help with cash transactions or speculation.
GBPEUR rates have this afternoon re-visited the highest levels seen for nearly 2 YEARS. This gives euro buyers a fantastic opportunity to buy to buy at what will probably be the highest level we will see for some time. The pattern of the movement came originally from better than expected UK data this morning which exceeded expectations, however the movement has been so large it leads many to believe it is a SPIKE. A SPIKE is a short term opportunity to buy at a high before profit is taken from the market along with the opportunity. I think this is the top end of the range we are likely to see for the next 6 week with economic data rare in the next weeks and the August shut down across a majority of Europe.
Tomorrow we have UK unemployment which will hopefully also give an opportunity so if you have not taken advantage today make sure to get in contact ready for tomorrow.
Contact us here via the author STEVE EAKINS at firstname.lastname@example.org to register for SPIKE NOTIFICATIONS make sure to title the email appropriately.
Longer term, and here I am talking 3 – 6 months time, I do think levels which get higher still. This will put us at the back end of the year and is when the Bank of England is expected to start raising interest rates, this is normally seen as positive for the currency in question so could give us a better price still.
This unfortunately probably putts a frown on the face of euro sellers that must be looking for some refuge from the battering they have seen recently. Personally I think this is the aim for euro sellers, trying to trade when the market gives some light relief as I think it is very unlikely that the trend will change. Again if you are in this situation register your interest via email at email@example.com
Looking ahead is always fraught with difficulties but sometimes it is easier when you know a little more than the average. Just now sterling is at 1.2613 on GBPEUR and 1.7160 on GBPUSD. Other exchange rates are also at multi year highs giving some well deserved relief for anyone transferring money abroad in recent years! I was helping some clients buying property in Europe at 1.10 a few years ago and I remember businesses buying the USD cheering at being able to get 1.50!
Tomorrow we have a very important release for the UK with the latest labour market statistics including the all important Unemployment rate. With Inflation having unexpectedly risen changes in Average earnings will attract slightly more attention, the prospects for GBP strength on the whole seem high.
Thursday is the all important CPI (Consumer Price Index) Inflation data for the Eurozone which will outline just how justified recent ECB (European Central Bank) actions have been in attempting to quell falling inflation or ‘disinflation’. Sterling may therefore make some further gains against a battered Euro.
Priced In? – Markets have probably been pricing in the prospect of a) good UK data and b) bad Eurozone data so anything that comes out worse than expected for the UK and better than expected for the Eurozone could trigger sharp corrections. Movements of up to one cent should not be ruled out depending on just what happens. I would personally be shooting for better rates to buy a foreign currency towards the end of the week (from tomorrow) in anticipation of some positive UK Unemployment data cementing and even lifting current levels.
Should you have further to hold on you can wait until next Friday when we get the first estimate of UK GDP (Gross Domestic Product) for the UK for Q2. I would personally not be surprised to see the rates tick higher on this release although arguably the good news is already in the market. As with the two releases above for me the risk is to the downside, markets expect positive numbers for the UK. Anything to the contrary could trigger sterling losses.
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Sterling lost out fractionally versus the Euro and the Dollar today with no real data out to support the pound. EU Industrial Production figures came out better than expected, as did the take up on US bond auctions, seeing slight gains for the greenback and the single currency over the pound.
Mario Draghi again confirmed his commitment to unusual measures and in my view confirmed that Quantitative Easing will occur in Europe when he spoke tonight by stressing QE was within the mandate of the ECB. We have a speech by Mark Carney tomorrow morning not long after the official UK inflation figures are published. Recently some of his comments on the timing of interest rate hikes in the UK have appeared a little mixed, so it will be interesting to see if he gives a clearer view.
The Bank of England left rates unchanged this month but we still haven’t seen the official Minutes yet (published a week Wednesday) to know if any members voted for a hike. We also have UK unemployment this Wednesday with the jobs rate seeming to get better all time and well below the 7% level that the BofE first highlighted as being one of the indicators where they may raise rates. The official UK GDP figures for Q2 don’t come out until the 25th but as you can see there are a lot of potential boosts to sterling if all the above are good.
In the US this afternoon we have the latest retail figures, and this is another big indicator. Unfortunately for anyone looking to sell Dollars and buy sterling, most data stateside has been underwhelming to say the least, resulting in very dovish monetary policy by the Federal Reserve. However I still feel the Dollar is undervalued and at some point the Fed will take a slightly more hawkish stance. Whilst this isn’t going to be a change overnight, there will come a point when data starts indicating further recovery in the US and get the Fed moving- could retail figures be the start?
If you have a currency transfer to make my view is that sterling will gain over the Euro in the longer term and lose against the Dollar, however this doesn’t mean things couldn’t be difficult in the short term. If you would like help getting the best exchange rate then feel free to email Colm at email@example.com and I would be happy to help.
It’s been a relatively quiet week for the Pound, with little movement against the major currencies. GBP/EUR had spiked back above 1.26 earlier this week, following better than expected PMI data for the UK. The EUR has regained its position below this level but GBP/EUR rates are still trading close to a two year high. It does seem as if Sterling has hit a glass ceiling against the EUR and in order to see a sustained move through 1.26, we will need to see another shift in market sentiment.
GBP/USD rates are floating between 1.71-1.72 on the exchange, providing USD buyers with some of the best levels of the past 6 years. Whilst the USD has struggled to make any sustained inroads against GBP since the turn of the year, I do feel that Sterling’s run is coming to an end. Whilst market conditions have helped push the Pound up to is current levels, it is very rare that Cable rates trade above 1.65 for this long and with the US FED now committed to ending their tapering later this year, we could well see the USD strengthen back below this level before Christmas.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our exchange rates with your current provider, then please feel free to contact me directly on firstname.lastname@example.org