Category Archives: Sterling strength

FED Interest Rate Decison & GDP Figures Key (Matthew Vassallo)

GBP/USD rates have dropped ahead of a busy day of data releases for the US economy. Cable rates dipped below 1.70 on the exchange yesterday, providing some much needed respite following a sustained period above this level. The USD’s struggles have continued for much of 2014 and it is very rare Cable rates trade above 1.65 for such a sustained period but could we finally be seeing the start of GBP/USD realignment?

Today’s data releases could hold the key, so all eyes will be on the release of the latest US Gross Domestic Product (GDP) figures and FED interest rate decision. With improved economic growth expected, it is possible the USD will build further momentum and any figures above expectation, or an indication that the US will consider a change in interest rates, could help drive GBP/USD back towards 1.68.

A word of caution however, this is not the first time the USD has threatened to realign itself and each time a similar move has occurred, the Pound has fought back almost as quickly. On-going economic difficulties, including high unemployment and relatively weak growth forecasts, are still likely to handicap any Greenback and the on-going positive UK recovery is also likely to support the Pound.

Longer-term I believe there is a lot of scope for the USD to improve against GBP but as yet we have not seen the catalyst required to shift the momentum and change market perception of the pair.

GBP/EUR rates have been fairly flat over the past few trading days, with the EUR finding plenty of support around 1.27. Rates have now been pushed back towards 1.26 and with key Eurozone data released this morning, including inflation and Consumer Confidence figures, we may find the Pound struggles to break through the recent highs. I still believe the current levels offer some excellent buying opportunities and it may be prudent to consider a forward contract around the current rates, for an longer-term EUR purchase.

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 mtv@currencies.co.uk

GBPEUR forecast and breakdown

GBPEUR rates remain within touching ground of the highest levels seen for many years and a lot of my clients are asking now when to trade?

It is a difficult decision to make as no one has a crystal ball however you can be “guides” by the economic data releases and the expectation for each.  These certainly help when you are trying to time a trade within a short period of time.  If however you have the option to wait for a period over 3-4 weeks it makes it more difficult and really you should be 100% comfortable with the risk you carry by waiting. If you are not simply limit your exposure to a level that you are. My this I mean you can put rate alerts in the system of limit order, these allow you to either be notified or automatically secure a contract when rates reach a certain point.  For example if you have done your maths on 1.24 and you don’t want anything lower.  The other choice you can make it to whether or not it could help to split the transfers you need to make.  So if you have 3 months and £300,000 to transfer you may say well that’s do the first half now and ride the other, you may be very risk averse and say let’s buy all now or even 75%.  Move this amount until you get to a level that you are comfortable to risk.

Forecast wise this week I expect GBPEUR levels to remain fairly flat with little movement in the next 24 hours.  The close on the month on Thursday could shake markets temporally but eyes should really be on European inflation data.  Inflation has been keenly watched and is a very influential data set in the eyes of the European Central bank and could easily change forecasts on future policy change at the highest level.

Longer term we start the new month and the UK economic data release cycle starts again next week with a host of data release.  All of which will have a forecasted release which will be priced into the market beforehand giving assistance on better days than others. It is only when data miss or exceeds these forecasts that we see the market move quickly when they price in the new information, this is referred to a SPIKE in the market as these are shortly lived.  SPIKE NOTIFICATIONS are available here as one of the services we offer. This notifies you when these opportunities are available. To register email hse@curerncies.co.uk with your full details and situation to be accepted to this service.

If you would like any more information on anything talked about above, or simply wish to know our live prices for a comparison please contact the author STEVE EAKINS via hse@currencies.co.uk

Quiet Start to the Week for GBPEUR Exchange Rates (Tom Holian)

Sterling vs Euro exchange rates have been trading at just above 1.26 for the last few trading sessions as data has been thin on the ground recently.

UK Mortgage Approvals are due out at 930am and with the housing market showing signs of a disparity between the South East and the rest of the country this data will make interesting reading. Indeed, according to the Land Registry 7 out of 10 regions saw a fall in house prices in June.

If you have been reading some of my previous articles I think that the UK property market will be the biggest concern for the British economy and also Sterling exchange rates.

The Bank of England has already suggested that it may increase interest rates sooner than the markets currently expect which has helped the Pound but if the housing market naturally begins to slow down then interest rates may not go up as quickly as suggested.

Thursday will be a big day for the Eurozone as key inflation figures are due out in the form of the Consumer Price Index which measures inflation.

Following the recent interest rate cut by the ECB this was an attempt to combat falling inflation so the data could affect GBPEUR exchange rates immediately after the announcement. If the inflation figure is low then expect Sterling strength against the Euro.

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

 

 

 

Pound Sterling Forecast… The week ahead – A quiet week ahead for U.K economic data, Could this be the week the Dollar fights back? (Daniel Wright)

Today has so far been exceedingly quiet on the markets with very little economic data out for the major economies leading to minimal market volatility across the board.

There is still very little to come out for the U.K for the rest of the week however all eyes may start to look towards the States and a flurry of important data due to come out from the middle of the week onward.

One thing to note is that U.S data can actually affect all major currencies as it does tend to impact global attitude to risk, this can lead to volatility for currencies such as the Australian Dollar, New Zealand Dollar and South African Rand.

The action really starts to hot up on Wednesday afternoon, first and foremost we have U.S GDP (Gross Domestic Product) data out at 13:30pm. GDP basically shows how much an economy has grown over the course of a specific period and expectations are for some really solid growth, should these expectations be met or indeed exceeded then the Dollar may have a good afternoon against all major currencies.

A little later in the evening we have the Federal Reserve interest rate decision, which also will confirm any changes in the tapering of QE and will be followed by a monetary policy statement by Janet Yellen where investors and speculators shall be hanging off of her every word. Any mention of interest rate changes could give us a very lively evening.

Janet Yellen has mentioned recently that unemployment will be key for interest rates going forward and Friday we see two really key employment releases with Non-farm payroll data and the official unemployment rate for America both coming out at 13:30pm. Non-farm payroll measures the number of people in Non-agricultural employment during a specific period, Non agricultural because this can be majorly affected depending on the season.

Personally I am going to stick my neck out and say that this has the potential and could be time for the Dollar to start to make a come back after a fairly weak few months, of course if the data is poor for America we could easily see rates go the other way but I feel that things are due to pick up for the States and the Federal Reserve may start to echo this in their comments and actions.

All in all if you have any major currency exchange to carry out either this week or in the coming weeks and months then now may be a good time to get in contact with me personally. I have years of industry experience and work for a company that has won many awards not only for our rates of exchange but also customer service. Feel free to email me directly on  djw@currencies.co.uk with a description of what you are looking to do and a contact number and I will be more than happy to get in touch with you.

Sterling Forecast for next week (Tom Holian)

With Sterling Euro exchange rates having hit a 2 year high earlier this week it has proved an excellent buying opportunity with anyone needing to send Euros to the continent.

The Bank of England minutes showed a vote of 9-0 in favour of keeping interest rates on hold but BoE governor Carney has been recently quoted as saying ‘interest  rates could go up sooner than the markets currently expect.’ This has helped Sterling exchange rates.

UK Retail Sales which were predicted to be strong were slightly lower than expected which saw the Pound fall marginally against the Euro and US Dollar but the fall only lasted a short period as Italian consumer confidence fell.

The biggest news of the UK came on Friday with the UK GDP data coming in at 3.1% which is the best level since 2008. The UK also grew by 0.8% in the second quarter of this year.

Sterling kept stable against the Euro trading above 1.26 during Friday’s trading session.

Turning the focus to next week we start the Eurozone and UK data on Tuesday with UK Mortgage Approvals for June. With UK house prices at their highest level in history if the data is strong we could see Sterling Euro exchange rates on the rise.

Wednesday will be a key day for anyone with a GBPEUR requirement with the release of confidence surveys for Europe in the form of both Consumer Confidence and Industrial confidence data. If the figures are poor I think we could see Sterling vs Euro tip 1.27 during next week’s trading.

If you would like to save money on exchange rates compared to using your own bank to buy currency then contact me directly for a free quote Tom Holian teh@currencies.co.uk

Pound Sterling forecast – Positive week against the Euro and New Zealand Dollar – Negative against the Dollar and Australian Dollar (Daniel Wright)

The Pound has had a fairly mixed week against the majors, seeing a fresh two year high against the Euro and also gaining three cents against the New Zealand Dollar over the course of one night. On the flip side we saw exchange rates drop below 1.70 against the Dollar for the first time in a little while and also sub 1.80 against the AUD too.

Sterling data this week has not been too bad, however the Bank of England minutes still showed that members of the MPC (Monetary Policy Committee) had still voted 9-0 for no change in interest rates however this did not dent the Pound too badly. European data released on Tuesday and Wednesday led to Euro weakness and we did actually hit a 25 month high to buy Euros with the Pound during this period.

The Dollar made a fight back after a prolonged period above 1.70 mainly due to good solid economic data surrounding jobs in the States and coupled with investors and speculators alike becoming increasingly worried about on-going political relations and turmoil around the world. Gold is also seen as a safer haven and priced in Dollars so this also helps the Dollar gain strength.

The gains against the New Zealand Dollar came shortly after an expected interest rate hike over in New Zealand – Usually an interest rate hike should give strength to a currency however this rate rise was widely expected and comments from the RBNZ that they were actually unhappy with the current value of the NZD and that its strength was unjustified , unsustainable and had the potential for a significant fall led to investors dropping the currency like a stone.

Finally, governor of the RBA Glenn Stevens also commented this week and has seemingly once again decided he is not so worried about the strength of AUD which gave the Australian Dollar a lift overnight, making it more expensive to buy and at one stage pushing it back below the 1.79 mark.

If you have a curency transfer to carry out either next week or in the coming weeks and months then it would make sense to get in touch with me directly as I can help you both in terms of achieving a great rate of exchange and to ensure the transfer is smooth and efficient. Please do feel free to email me directly on djw@currencies.co.uk with a description of what you are looking to do and a contact number and I will be more than happy to call you personally.

 

 

UK Economy Grows by 0.8% (Matthew Vassallo)

The UK economy has grown by 0.8%, official figures for Q2 have confirmed. UK gross Domestic Product (GDP) figures were released this morning and confirmed that the UK economy had grown to pre-crisis levels. In fact the ONS figures showed that the UK economy is now 0.2% ahead of its pre-crisis peak, which was reached back in the first quarter of 2008.

Whilst the figure was released as expected, it reaffirms belief that the UK economic recovery continues to surpass that of other major economies, including the Eurozone’s and the US. However, this does not necessarily mean Sterling’s positive run will continue. If we look closer at GBP/EUR trends, although the Pound had pushed to a fresh 2 year high earlier this week it ran out of steam as the EUR found market support around this level. Similarly, GBP/USD rates hit a six year high recently only to fall away almost as quickly.

Personally I feel both currency pairs offer fantastic buying opportunities to those holding Sterling and it may be worth considering one of our forward contract options, which will protect you against future market losses.

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 mtv@currencies.co.uk

GBPEUR forecast – UK Retail figures and GDP forecasts

GBPEUR rates have again hit new highs this week, reaching fresh 2 year highs against the EURO and near 5 year high against the Dollar.  My personal view is that these levels are the top we will see this month with the peak either expected this morning on Retail figures being released or tomorrow with UK GDP figures.  Thereafter economic data which traditionally drives the markets is fairly thin as they are generally released at the beginning of the month with data on the previous month.  Longer term levels will probably revisit these levels through August but there will probably be less opportunity due to the August slow down over a majority of Europe.

September will then have more opportunity as we focus on the referendum in Scotland and speculation will probably build on when UK interest rates will rise.

Currently central bank prices are challenging 1.27.  Unfortunately the banks will not offer this level for you to trade and can be up to 6% off these levels adding a significant cost to your transfers. Here we get a lot closer and therefore provide a saving on every trade. Plus with pro-active service helping you time the trade the experience and therefore cost in generally reduced significantly.

Simply put if we could not save you money on your exchange we would not be in business. PLUS with awards given to us for both our service and rates of exchange you can be comfortable in the knowledge you will experience a professional service.

For more information, live prices or to register for our service contact the author STEVE EAKINS via hse@currencies.co.uk

Will sterling keep up this current trajectory?

Tomorrow is UK Retail Sales and Friday is the latest UK GDP (Gross Domestic Product) data. Both of these releases could easily spark volatility in the market underlining the importance of keeping up to date with the market. In the last few weeks sterling exchange rates have crept up notably against the Euro but we are at multi year highs against pretty much everything! Can sterling keep on this trajectory?

Well early indications seem to think so with recent poor borrowing economic data being ignored in anticipation of an interest rate at hike at some point in the future. As is so often the case with exchange rate it isn’t just which currency is the best, it is that others are very unpopular! Take the Euro for example, we may still see some QE (Quantitative Easing) in the future. This form of ‘printing money’ is very bad for the currency as by increasing the money supply it effectively dilutes the strength of the currency. The UK used QE many years ago and this is one of the reasons the pound dipped to almost parity with the Euro, imagine the detrimental effect QE in the Eurozone would have on GBPEUR rates!

If you have any need to buy large volumes of foreign exchange getting the best exchange rate is central to making the most of your money. The authors of this blog and I are extremely confident we can undercut other sources like banks and other currency brokers on exchange rates, plus also offer practical assistance in the timing and management of your payments. For a quick rundown of your situation and a comparison why not make contact? We can then have a quick chat at no cost or obligation and you can decide for yourself what is better! After all if you were entirely happy with your current situation you probably wouldn’t have read this far!

Jonathan Watson, jmw@currencies.co.uk

Bank Of England Minutes Released This Morning – Expect Sterling Volatility (Colm Gilhooly)

The latest Bank of England Minutes are published this morning at 9.30 and could be hugely important to the short term future of sterling exchange rates.  The BofE held interest rates this month despite calls in some quarters for them to start hiking interest rates.  Indeed even some of the members have themselves mentioned that the case for an interest rate hike is more balanced than previously suggesting they must now at least be considering when to hike.

However last month was a unanimous 9-0 in favour of holding interest rates, and if this morning shows the same then sterling could struggle as it would suggest a possible interest rate rise is still a way off yet.  On the other hand if the Minutes show one or more members have voted to hike, then we could see sterling rally further as the prospect of higher UK interest draws closer.

The Euro has wobbled again yesterday on the back of increasing European debt to GDP ratios, and I expect the single currency to remain under pressure in the run up to the next ECB decision where we will find out what the ECB plan to do (if anything) to combat low inflation and growth.  EU unemployment figures come out of the 31st July (a week Thursday) so again if these are not very impressive we could see the Euro slip even deeper.

It has broken below 1.35 against the USD and with the Fed announcement and jobs figures next week I think the Dollar could rally further should they take even a slightly less dovish stance Stateside.  The Aussie Dollar was once again riding up versus the Euro yesterday due to the European debt fears, and Glenn Stevens not mentioning the strength of the currency in his speech the other day.  Overnight Aussie CPI data was reasonably good and has helped the currency strengthen further.

If you need to make a currency transfer and want to get a good exchange rate and some options about how best to approach it, then feel free to email Colm at cmg@currenices.co.uk and I would be happy to explain how our services work.

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