Category Archives: Sterling strength

How will Friday’s UK GDP Figures Affect Sterling Exchange Rates? (Matthew Vassallo)

Sterling has found some much needed support over the early part of the trading week, recovering ground against both the EUR & USD. The Pound has benefited from some improved economic data late last week, with Unemployment data and UK Retail Sales figures coming in better than expected.

This in turn boosted GBP/EUR rates, with the pair hitting 1.1784 at the high and bringing some much needed respite to those clients holding the Pound, following weeks of devaluation. These losses were born out of a complete lack of confidence in the UK economy, with investors risk appetite dissipated by the uncertainty caused by the UK’s decision to exit the EU. This is and will remain to be the underlying reason behind Sterling recent demise, with the Bank of England (BoE) cementing the downfall with their recent interest rate cut. With the possibility of further monetary easing (QE) and/or another rate cut, we may see the situation get worse before it gets better.

GBP/USD rates have seen a similar trend, with the pair falling below 1.30 at the recent low. Despite an improvement above this threshold, I do anticipate a sustained recovery anytime soon, certainly not under current market conditions. The greenback has made huge strides since the turn of the year, in line with economic improvements in the US and despite the political battle between Donald Trump & Hilary Clinton heating up ahead of Novembers election, I do not expect a recovery back towards 1.40 until we at least have some clarity on when and how the British government are likely to facilitate our Brexit.

Once some of this uncertainty has been removed then the Pound has a better chance of recovering its losses but until then I would be looking to protect any short to medium-term Sterling positions, with further market volatility expected.

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, you can email me directly on mtv@currencies.co.uk

Could we have another Referendum?

Well well politicians are a right bunch aren’t they. Just as the UK economy was recovering following the worst financial crisis in living memory we have had the politicians calling this Referendum which has of course knocked confidence and no leaves us with plenty of uncertainty up ahead. It is far to early to be calling Brexit good or bad since we just don’t know what it is at present. For now the UK economy is ticking along nicely, it is growing, people have jobs and they are confident to be spending their hard earned cash as it has been a lovely summer. As I have repeatedly said however we cannot (unfortunately) rely on the weather to support the economy, still with the Olympic glory still fresh in everyone’s minds let us keep positive.

On the subject of Referendums we might yet have another one! Owen Smith the prospective Labour candidate has stated he will be looking to call another Referendum before invoking Article 50, putting the new deal to the test of a public vote. Owen Smith the potential future Labour leader has made this call as part of his campaign to be the new Labour leader. So far this is not wholly likely but the prospect remains.

If you have a transfer involving the pound the uncertainty is set to continue for many months and maybe years, making some plans in such uncertain times seems to me a very sensible option. To discuss further your options and the market please contact me Jonathan Watson on the form below or email me directly on jmw@currencies.co.uk

Is there any chance of a Sterling rally in the near future? – Pound Forecast (Daniel Charles Johnson)

GBP Forecast

Many of my clients are hanging on to sell there Sterling at present. Having watched GBP/EUR fall from 1.40 at the beginning of the year to the now painful lows of the 1.15-1.16s. It is extremely hard to predict with high street banks throwing out contradictory forecasts. Lloyds predicting a Sterling rally and HSBC predicting parity on GBP/EUR. Personally I feel as UK data starts to filter through for July we will see further Sterling weakness. UK retail figures went against the grain and came in better than expected. we did see a small rally for GBP but it was not sustained.  I feel the positive data cab attributed to an increase in tourism due to the weak pound and the rarity that is good British weather.

It is important to note that Ian McCafferty a member of the monetary policy committee has indicated that if UK data continues to come in below expectations than further monetary easing will be initiated. If I was looking to sell Sterling short-medium term I would be taking advantage of current levels.

If  you have a currency requirement it is crucial to be in touch with an experienced broker. The timing of your trade is vital during such a volatile  times, If you have an experienced broker on board he/she 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 assist with your trade I will be happy to help. If you inform me of the 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 country 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. The quickest method to get in touch is by filling in the form below and we will be in touch ASAP.

 

Pound rises as expected to begin the week – will buying Euro and Dollar rates continue to improve? (Joshua Privett)

As my article on Sunday mentioned, the Pound was expected to perform well this morning and did not disappoint, with gains seen against all major currencies – in particular for buying Euros and Dollars.

Speculators on Friday afternoon have been pulling the floor from under the Pound as they scramble for a stable currency to store their profits in heading into the weekend. Of course, the Pound has bot been high on their list of stable currencies and as a consequence the severe fall on demand for Sterling sees its value plummet.

However, similarly like clockwork we’re seeing GBP/EUR and GBP/USD levels rise as markets re-open on the following Monday as the vast majority scramble to buy Pounds due to their sudden cheapness. In this period of the week rates have rarely been so predictable.

Moving forward however my article did note some potential red flag events – particularly for Euro buyers.

Firstly, news concerning business confidence figures in the Eurozone are to be released tomorrow morning. As the Eurozone has essentially vacuumed up most of the foreign investment the UK has lost in the run up to Brexit and following the Leave result in the vote, the figures are expected to be very positive for the third consecutive month. It’s hardly surprising given that credit is so cheap and their foreign investment is up 300% on the same time last year.

With a fresh bout of Euro strength expected to come tomorrow at 10am, Euro buyers may be wise to seize some of the gains made today first thing in the morning to avoid what could be a difficult week for the Pound – especially given that underwhelming UK growth figures are expected to be released this Friday.

USD buyers however may be presented with some opportunities in the short-term, as tomorrow afternoon US housing market figures are forecasted to show a contraction – a likely result of their recent rise in interest rates. Expect a cheapening of the Dollar tomorrow afternoon. But again with UK growth figures on Friday we may simply be subjected to a small window of opportunity.

With this in mind I recommend that anyone with an upcoming Euro or Dollar purchase should contact me on jjp@currencies.co.uk or by filling out the form below to discuss your currency requirement and develop a plan of action to truly maximise your return.

I have never had an issue beating the rates of exchange offered elsewhere, and I endeavor to produce a proactive service for my customers to make sure they are kept informed and up-to-date with market movements and expectations, rather than lagging behind.

As our regular readers will now full well, rates of exchange on any particular day can be fixed to allow purchasers to pre-book their currency for a later date, allowing any upcoming pitfalls to be avoided.

Will the UK and the pound enjoy an Olympic boost?

The UK is basking in Olympic glory at present and shrugging off those Brexit blues. For now consumers are spending and the economy has a healthy unemployment picture. This good news is very much welcome and reminds us all of the power of hard work, determination and training. The Olympics will have helped raised the UK’s profile internationally and could help boost tourism particularly with the pound at such low levels. Measuring the true impact of all of this in an economic sense is actually very difficult and in my opinion it would be misplaced to be overly complacent about the future direction for the pound.

An important point to make is that whilst the weak pound is good for exports it is not overall a benefit for the UK since the UK as a net importer buys more from overseas than it sells. That means because we spend more overseas when the currency is weak it is overall a bad thing. That is not to say a weak pound doesn’t present opportunities, many businesses selling overseas will be enjoying the weaker pound and there have been some headline grabbing stories of UK companies being purchased at a discount because of the weak pound.

The key news for me is the business surveys since the Brexit vote, these are the key indicators because ultimately it is business that drives the economy forward. Business is the key barometer of what will happen next. Consumers will not keep spending when the weather turns and they are worried about their job, it will be business’ reaction to the the economy which will shape what happens next. With hiring down and confidence lower I can see the pound coming under further pressure in the coming weeks and month, any clients buying a foreign currency with the pound should not be overly complacent.

If you are buying or selling the pound exchange rates remain volatile and there are various upcoming events to help determine the next leg of direction on the pound. Brexit news is unlikely to develop quickly, indeed we are probably going to need to wait until 2017 to learn just what is happening next. In this time as confidence is sapped, so too sterling should fall.

If you have a transfer to consider making some firm plans in advance is sensible. If you are considering buying or selling the pound then understanding all of your options is key to mitigating the uncertainty. To learn more please fill in the form below or if you prefer a direct contact with me please email jmw@currencies.co.uk

Speculators undercut the Pound during Friday trading once more (Joshua Privett)

Once more on what seems to be a very regular pattern since the Referendum now, traders at high street institutions are pulling the floor from under the Pound as we enter the weekend.

Buying Euro and Dollar rates suffered suddenly and heavily as a result, with GBP/EUR losing 0.7 cents at the time of writing this post, and GBP/USD  a full cent.

This phenomenon of profit taking is a practice established to protect the capital gains made by speculators during the weekend for the Friday afternoon and Monday morning periods when they are out of the office for the weekend but when markets continue to operate. A dominant currency is chosen to keep their funds in for this period when they have no control over their capital.

This currency has to be stable and be able to hold value. Since the referendum vote, this Pound has been in very low demand during this period. With low demand becomes a loss of value.

Next week will bring some interesting turns on what we have come to expect with UK data releases. UK inflation is the next key data release on Tuesday for the UK economy and has normally been a red flag for anyone considering buying a foreign currency. However, for the first time since the beginning of 2016 UK inflation was in the green this month – a by-product of healthier oil prices and rising importing costs from a weak Pound.

This gives the image to the markets that the UK is still spending highly despite the dampening effect of the leave vote. These inflation report hearings are expected to reflect this improved increase towards the Bank of England’s target for the economy at 2% inflation, compared to 0.6% currently.

As such Euro and Dollar sellers may wish to take the opportunity of this dip in their favour quite soon into Monday morning, and you can contact me over the weekend and I will reply as soon as possible to discuss how to fix the rate for a Sterling purchase based on these current favourable numbers for a future transfer.

Euro and Dollar buyers however, may see some improvements as the week progresses. and I offer a proactive service to make sure my customers are made aware of any potentially favourable movements or change in expectations which you should be made aware of to budget accordingly.

You can contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return. I have never had an issue beating the rates of exchange offered elsewhere, so a brief conversation could save you thousands. Alternatively, you can fill out the form below.

What do we really think is going to happen next for the pound?

Unfortunately all the positive thinking in the world will not help move an exchange rate. You can try all manner of methods to try and alter your situation but unfortunately the market is impersonal and does not react for these reasons. Looking at the economic reality sterling has had a slightly better week although in my opinion this is against the grain of a continuing negative decline in the value of sterling. Let us look at the positive news so far this week which has helped the pound, is it indicative of a big rebound in the value of the pound, is it a sign that Brexit is nothing to worry about and everything is going to be okay? Let us drill down into the detail of the figures and make an assessment if two pieces of good news this week are going to be enough to turn the tide on a raft of negative indicators.

  • Positive Unemployment data. The data released only covered the period up until the vote. The claimant count reduction (people claiming benefits) fell in July but this is not something I would be drawing too much positivity for the UK from. We won’t know the full impact on Unemployment from the Brexit until October or even the New Year as the data is always 3 months behind. Plus it takes many months for workers to leave jobs or lay offs to occur so it might not be until well into 2017 until we know the true Unemployment picture. The fact remains all the economic data is showing big declines in business, this will cause problems down the line.
  • Excellent Retail Sales Figures. The data for July showed a huge boost in Retail activity much better than June. What makes Brits go out and spend money? Sunshine! The excellent weather which on some days was 9 degrees higher than the average for that period saw lots of money on extra food, drink and clothes as people socialised more and went out more. Can we rely on sunshine to drive the UK recovery? Well I wouldn’t be banking on it….

It is only 2 months since the vote and I believe there are still many skeletons finding their way into the cupboards of the UK economy. Misplaced positivity can be a very dangerous thing. I prefer a careful, measured and balanced assessment of the facts. The pound has risen this week and may yet spike a little further following some very tough weeks. But with so little really known about the political and economic impact following Brexit I feel that sterling will fall further in the remaining months of 2016. If you are buying or selling the pound and have a transfer to consider please fill in the form below and I will contact you to discuss further the market and your options. Alternatively you can email me on jmw@currencies.co.uk for a more personal service. I have nearly ten years experience working as a specialist currency broker for one of the UK’s largest independent currency brokerages and would be delighted to hear from you and offer some assistance to help you get the most for your money.

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

Sterling rates have remained fairly flat during Wednesday’s trading, with the latest UK unemployment rate coming out as expected. The official reading of 4.9% was likely factored into the current GBP exchange rates by investors and as such we saw very little movement on the exchange.

Sterling did however, receive a timely boost yesterday, with UK inflation data coming in above market expectation. Despite levels remaining relatively low and a long way from the government’s target of 2%, the official readings helped GBP gain some traction against the EUR, USD & AUD. With so much uncertainty surrounding the UK economy at present any positive readings are welcomed by those clients holding GBP, who have had to watch the Pound’s value disintegrate over recent weeks.

Inflation levels have been the cause of much debate and are seen as a key market trigger for investors. Given their relevance in terms of the health of the overall economy, this positive reading may help to alleviate some of the pressure that has been building on Sterling over recent weeks.  How the Bank of England (BoE) will look to counter any aggressive rises in inflation is yet to be debated but for now the small improvements seen are likely to give GBP some much needed market support.

Personally I am of the opinion that Sterling will find a foothold sooner rather than later and we should get some protection around the current levels. We still remain well above the lows of 2008 and whilst it is likely that the longer-term Brexit outlook will restrict any aggressive Sterling advances above 1.20, I don’t believe it is all doom & gloom as some analysts are predicting.

Any client holding GBP should be aware of the pitfalls they currently face and it may be wise to protect themselves against a negative market by utilising one of our forward contracts, which are in place for situations such as this. They can give you piece of mind during a turbulent period and allow clients to budget on their foreign property and asset purchases, helping to remove the fear of further market drops.

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 for Matt. Alternatively, you can register your details through this blog or email me directly on mtv@currencies.co.uk

Will the pound continue to fall?

Sterling has been on the back foot ever since the Referendum and the big question is will this continue? Well in short I think the answer is yes! Quite frankly there is bound to be lots more bad news relating to this scenario, it has not even been two months since the Brexit vote and we are haven’t even begun to scratch the surface of what lies ahead. Markets do not like uncertainty and at present there is plenty of uncertainty as to what will happen to the UK both economically and politically. The economy is on the back foot with slides in growth, employment and business activity. All in all I would not be surprised to see the pound fall further touching fresh lows against all the major currencies. These include the US Dollar, the Euro, the Australian dollar and the New Zealand dollar. If you have a transfer involving the pound and these currencies preparing for further falls in the value of the pound seems the most sensible option.

Last week we heard news Theresa May might not invoke Article 50 until much later than planned, as explained above we are nowhere near knowing any firm details of what Brexit actually is and what it entails. It will lead to many months and years of waiting to understand exactly what is going between the relationship between the UK and its biggest trading partner. As long as this uncertainty continues business and the public will be loathe to make any big financial decisions which will lead to the slowdown in the economy and rising Unemployment.

If you have to buy the pound now is a fantastic time to be considering all of your options and making some plans on the future. The market is likely to offer better deals for buying pounds which anyone with a currency transfer to consider should be taking on board. If you wish to learn more please contact me Jonathan on jmw@currencies.co.uk. This blog has helped thousands of people to save thousands of pounds through better information and a much better exchange rate than they thought possible. To learn more please email me or fill in the form – you have nothing to lose and lots to gain!

Post-Brexit data could cause further Sterling Decline – Pound Forecast (Daniel Charles Johnson)

GBP Forecast

The Pound has fallen considerably against the majority of currencies since the Brexit vote. Most UK data releases have come in below par, but I fear worse is yet to come. We are yet to see the true impact of the vote to leave the EU as most of the data released so far has been for June. July’s figures are just starting to filter through. I think data will be negative and the pound will slide further. This morning will see Consumer Price Index (CPI) data at 09.30. CPI is a measure of inflation and is a key indicator as to the health of an economy. I would expect a slight contraction. Thursday at 09.30 we will see UK retail sales and again I expect a contraction and the pound to weaken as a result. After the UK retail sales data we will see European CPI data and I do expect a drop which could cause the pound to strengthen, although I feel the damage may have already been done by this point. Simply put, If you are selling Sterling it would be wise to move quickly.

If you have a currency trade it is crucial to be in touch with an experienced broker. The timing of your trade is vital during such a volatile  times, If you have a vetran broker by your side he can keep you up to date with any movements in the market to help you make an informed decision when the time comes. If you would like me to assist with your trade I will be happy to help. If you let me know the currency pair you are trading, volume and time scale and I will provide a free individual trading strategy. I work for one of the top brokerages in the country and by doing so I am in a position to beat nearly every competitors rate of exchange. You would be looking at around a 3-4% 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 being of assistance.