Category Archives: Sterling strength
GBP/EUR rates dropped during yesterday’s tradng, following poor UK Retail Sales figures. The expected figure of 5.4% was not hit, causing Sterling to lose value against most of the major currencies, in particular the EUR. This drop came after Sterling breached the 1.40 barrier earlier this week, once again providing EUR buyers with some of the best levels of the past 7 years.
Sterling’s positive move over the past couple of weeks was not expected when you consider the the uncertainty that was likely to be created by the UK general election. However the on-going economic difficulties inside the Eurozone, particularly in Greece, have not allowed the EUR to gain any sustained market value and this is why we are seeing the Pound trade at such attractive levels.
Personally I feel there is scope for the EUR to improve, especially when you consider its recent history and any UK media attention on Europe in the build-up to the election is likely to cause market uncertainty, which will not be positive for the Pound.
Looking ahead and with the latest Eurogroup meeting continuing today, expect issues in Greece to dominate discussions. Whilst scaremongering is rife at times like these, there is a very real threat that unless Greek finance minister Varoufakis presents a tangible list of reforms soon, then Greece will receive no further bailout funds from the IMF and it is likely they will default on their debts. If this does happen then their future participation inside the EU is likely to come under serious pressure.
GBP/USD rates crept back above 1.50 during Thursday’s trading despite the poor UK data mentioned previously. This move is certainly a positive one for the Pound, which for a time felt like it would be marooned under this glass ceiling for an extended period. The catalyst for yesterday’s spike could have been the weak US employment & Manufacturing data which came out under expectation and helped drive the Pound’s value back up. In truth it was fairly flat market for the pair yesterday but I expect this to change as we head towards the general election.
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 award winning exchange rates with your current provider, then please feel free to contact me directly on email@example.com
The Pound had an incredibly strong trading day yesterday, following a positive outlook towards the UK Economy by the Bank of England. The Monetary Policy Committee (MPC) indicated that they weren’t too concerned about the low levels of inflation and subsequent rise in UK goods prices. Two ‘MPC’ members also indicated that their decision was harder this month to vote against an Interest Hike, with those comments providing the boost up to the 1.40s! I personally feel that this level is a bit ‘false’ given how close we are to the election. It is now only two weeks until the UK votes on potentially the government for the next 5 years!
If you are buying a currency with Sterling I’d strongly consider buying now. It is also worthwhile noting that if you don’t have the full funds available for your purchase (for example a property purchase abroad) then there are still options available to you. Feel free to get in contact using the details below – I’d be more than happy to run you through the mechanics of ‘forward buying’.
Those with a Dollar exchange will have been surprised with rates pushing back in to the 1.50s. I personally feel that this level is worth taking advantage of if buying the Dollar, with 1.45 / 1.46 being the target for USD sellers. The ‘Greenback’ is reacting heavily to interest rate speculation, with moves of 3 cents on average in either direction. I would be surprised if rates were hiked in July however one cannot rule it out – my personal opinion will be for a September hike.
The final currency trading heavily is the South African Rand. Levels are at their peak of 18.40 and wouldn’t surprise me if we hit 18.50. Many buyers are taking advantage so ZAR buyers should seriously consider their position!
As mentioned above, should you have an exchange requirement (now or in the future), please feel free to get in touch. Either email me AJB@currencies.co.uk or contact me directly 01494 787 478 (please quote this blog).
I look forward to hearing from you!
Today saw incredible gains for Sterling across the board against all major currencies. Sterling is now back and comfortably inside 1.40 against the Euro, as well as above 1.50 against the USD. The presence of rates like this to purchase, particularly with our election now only a few weeks away is staggering. The uncertainty of such a closely fought election will become telling on rates in the near future. The fact that the SNP is becoming a major player in this, with the Scottish Referendum just a short time ago causing Sterling to crash, is making Sterling weakness during the election more and more certain.
Historically, this is the period when the rates start to tumble slightly. Two weeks or so before citizens head to the polls. Today the rates moved up across the board due to positive minutes from the recent Bank of England meeting. Their apparent surprise at the sudden representation of poor data in the American economy is why the Pound’s gains against the USD were larger other major currencies.
What some financial forecasters are beginning to ponder however, is that these rises indicate an even larger drop to follow. Frankly, these rates don’t make sense in a logical market. The certainty of no clear front runner, a necessary coalition, and the inability to forecast British financial policy beyond May, makes all this flight into Sterling from other currencies an indication of more unconventional investment policies.
The currency markets are mainly moved by banks, who speculate billions daily on shifts in currency value. Buying at the low and selling at the high to make their profit. Once thing they can do is ‘go short’. This is a term where a currency is borrowed, like Sterling, with the promise that it would have to be repayed back later. However, if Sterling loses value later, then this debt would be very cheap to pay back. The election looming makes this a very safe bet. So when these investors do decide to sell off their Sterling for profit, the snap-back in the markets will likely be extreme to say the least.
As I said these current rates are an incredible opportunity. Personally, if I had a requirement to use Sterling as a purchasing currency for Euros, Dollars, etc, then I would not hesitate a moment longer. Waiting any longer will be a gamble that could only have a small pay off, or a large loss. The rates can be pegged at these historic levels for up to 12 months, call through to the trading floor on 01494 787 478 and ask for Joshua, or email me overnight on firstname.lastname@example.org to discuss your situation in more detail.
GBPEUR levels are holding up well and the reason for this surprise so close to the election is the Greek story. The latest is that they have initially, up to Friday to get a budget reform plan accepted by the ECB and IMF before the next lump of funds are released to them. They also have a large amount of repayments to be made next month which is another concern. The only play they have is to make this as muddy as possible which has weakened the euro.
The deadline for the next ‘update’ probably not a solution is on Friday of this week and when this happens I expect the Euro to strengthen making buying the single currency more expensive. This however could easily be the catalysts that starts the rates on a a negative trend in the run up to the election in the UK which is just 15 days away.
What I am saying is that many experts are thinking that we will now have a negative trend start for GBPEUR levels. So if you have euros to buy in the near future you have to have a very strong argument to wait. For a full break down of forecasts, live prices and tools contact myself or the team via email@example.com
How big an impact will the General Election be on sterling exchange rates? It could turn out to be quite a big issue as there is so much uncertainty as to the outcome. We generally expect the pound to fall in the run up to the election before rising after. Quite how much it will rise or fall is of course impossible to predict but I would not rule out movements of up to 5 cents in either direction.
You can protect yourself and capitalise from such volatility by utilising one of our many contract options:
Once the rate is fixed you need to get the money to us within a few working days. We arrange onward payment to the specified beneficiary oce all your funds have cleared. Internationally funds are sent via SWIFT – the fastest international payment method. Please contact me Jonathan on firstname.lastname@example.org to learn more!
When you want a fixed exchange rate for up to 1 year.
You pay a small deposit to fix the exchange rate. Once the contract is agreed, regardless of market fluctuations, you know exactly how much currency you are buying. Perfect if you want to budget and protect yourself from market volatility.
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Placing a Limit Order means that when the market moves to your specified rate, our system automatically purchases your currency, letting us work as your eyes and ears in the market.
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You choose a lower limit on the price at which you are willing to buy. If the market drops to that level, you are guaranteed that you will get an exchange rate no lower than the one you specified.
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Making no plans and just hoping your rate will magically go up is one of the most common and costly mistakes clients make on foreign exchange payments. For more information on getting the best deals and making sure you know everything that please contact Jonathan on email@example.com.
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US Retail Sales dominated the currency market movements today, coming in again lower than expected. Generally speaking the rates have been poor for the entirety of 2015, as bad weather on the East Coast hampered shoppers desire to head downtown to Macey’s! The general overview for the Dollar is in line with the Interest Rate outlook. We may get further indication tomorrow at 7pm when the Federal Reserve releases its ‘Beige Book’. The Beige Book is a collection of essentially market sentiment from all Fed members, with some being a lot more ‘bullish’ (positive) than others. The key to the recent USD strength is on the back of Fed member ‘Lacker’s’ comments, as he feels that the economy could support an Interest Rate increase in June / July. I wouldn’t be surprised to see either another Fed member, or the Fed Chair Janet Yellen make a statement to the contrary. This could push GBP USD exchange rates up to the 1.49s – what I feel is the top of the current trading range. I feel that the next key limit for GBP-USD is 1.45 which is achievable with further positive market commentary.
On the other side of the Atlantic, Sterling holders are selling their positions quickly as the impending UK General Election will bring weakness. The overwhelming expectation is for Pound weakness as realistically we will see a ‘hung parliament’. This situation of no majority government is bad news for the UK with the pound likely to suffer. If I were buying a currency with Sterling I’d be moving sooner rather than later!
The Eurozone are STILL trying to sort out the Greek debt, with the proposal now for an amendment to the bailout. The Greek government are looking to repay the IMF (International Monetary Fund) loans as they are expensive, and then renegotiate the loans from the Eurozone. The Eurozone loans are at high rates of exchange as they were agreed at a period of more prosperity. Bringing the interest rates in line could provide a monumental cut to payments. Greece is the key factor for the Euro staying so weak – realistically EUR should have moved back closer to 1.30 as the UK goes in to Election mode. It is worth also paying attention to any announcements from the Swiss. In January we saw the largest peacetime currency move (for Major currencies), when the CHF-EUR trading peg was abolished. The Swiss National Bank have hinted at yet further change to policy – Euro sellers should pay particular note!!
If you have an exchange requirement, please feel free to get in touch. I can assist you in achieving award winning exchange rates, but also making available facilities to ‘forward buy’ your currency. For just a small deposit you can secure your entire exchange, helping large currency exchanges (e.g. house purchase) much easier to budget.
01494 787 478
The UK General Election still realistically underpins the potential direction for the Pound. At times it does feel as if this is a political broadcast blog, however such is the potential impact from the uncertainty, it would be foolish not to provide a commentary!
A hung parliament is still very much the likely outcome with the Scottish Nationalist Party likely to be the key. The SNP look set to win the vast majority of Scottish seats (from Labour) and would probably be viewed as the most sensible party with whom to form a coalition. Although a coalition with the SNP would realistically mean another Scottish referendum, it may avoid an immediate withdrawal from Europe. This would be favourable for the Conservatives, who generally speaking are the most economically focussed party and fear leaving Europe would be catastrophic for the Pound. The main point that the Tories and SNP would need to thrash out would be the Trident Nuclear deterrent, with both parties very much in opposing camps! Cameron managed to get Nick Clegg to about turn on Tuition fees – will he turn Nicola Sturgeon??
If you are holding Pounds to buy a currency, I’d be inclined to move sooner rather than later. As noted above, Uncertainty and Volatility is guaranteed! Euro Buyers – Is it worth risking the current excellent levels chasing say 1.40? I don’t personally feel that we will see that level again for a fair while! The key data out for the UK today is a GDP Estimate at 15:00. This estimate (released by NIESR – The National Institute for Economic and Social Research) is pretty accurate and will give a good indication as to the strength of the UK economy.
As bad as you forecast jobs and employment data (Nonfarm Payroll), the strong Dollar will make back it’s ground! This has been made brutally obvious as last weeks poor figures on Good Friday weakened to Dollar almost back to 1.50. However we are now back this morning in to the 1.46s. Minutes for the Federal Open Market Committee meeting indicated that some FED members still feel that a June Interest Rate hike is realistic, boosting the Greenback to current levels.
I have previously indicated that I feel 1.45 (and better!) is achievable. Therefore USD buyers may want to get in touch to make sure if favourable spikes are seen – you’re in a position to take advantage!
If you have any currency requirement, please feel free to get in touch. The direct line to the trading floor is 01494 787 478 (please quote this blog and ask for Andrew Bromley). Alternatively, email me AJB@currencies.co.uk
Do you know who is going to win the election in the UK? Nor do I. But I think a hung parliament is looking more and more likely, this is something anyone considering buying or selling sterling should be very aware of. The pound is likely to fall in the coming weeks as uncertainty rises as to who will take the reign of the UK public finances. This is not a time to be sitting on the fence waiting for something to happen!
Moody’s the ratings agency confirmed yesterday that they view a UK exit from the EU more damaging than any uncertainty over just how the election pans out. As a client pointed out to me recently any uncertainty in the UK parliament may pale into insignificance when compared with some of the uncertainty in the Eurozone at the moment!
Simply put no one can say exactly what will happen. But from my experience of past events (the 2010 election and the Scottish Referendum) sterling is likely to fall before the event before rising after. However with the Tories pledging a referendum on Europe and Labour pledging to increase spending neither outcome looks good from a market perspective. It may be that sterling could fall further after the election or around the result as the parties scramble to get in bed with one another over important issues.
If you are considering a sterling transfer in the future the coming weeks may present at opportunity that does not return. Making plans in advance is the only way to limit your risk and help maximise your currency exchange. We offer a specialist proactive service to help you get the most from the market when transferring money overseas. This blog is intended to highlight important events and information in the market so that you can help minimise your risk through an informed decision.
To really get the most from our service speaking to one of our team or myself is recommended. I Jonathan Watson have worked as a foreign exchange broker for the same company for 6 years and am here to assist in the planning and execution of any international money transfer you need to make. I cannot tell you exactly what to do but hope to provide useful insight and a platform for achieving the most for your money. Even if funds are not required at this stage with plenty of uncertainty around, utilising a forward contract or a stop loss or limit order might be a good idea.
I am very confident I can show you a saving on the exchange rate versus other sources and also offer a friendly, knowledgeable service above any bank or foreign exchange broker. If you wish to learn more about the pound and just what to expect plus what you can do about the uncertainty up ahead please email me on email@example.com
Other Currencies News
CAD – Unemployment data today at 13.30 has helped the current 2 month high the Loonie dollar is enjoying against sterling. In a nutshell the Canadian dollar is benefitting from an improved Oil price and overall improvements in their biggest trading partner America’s economy. The Loonie may well track further future projected improvements in the USD against sterling so anyone buying the Canadian dollar in the future might wish to make plans sooner than later.
AUD – The Reserve Bank of Australia decided not to cut their interest rate as expected helping the Aussie to strengthen against sterling. Expectations are for the RBA to make at least one more rate cut before the end of the year as they seek a weaker currency to help boost their exports.
ZAR – A general improvement in risk appetite and commodity prices has helped the Rand to rise against sterling, anyone selling Rand for the pound might want to move on any GBP weakness before the upcoming election.
No matter which currency you are buying or selling and when, please feel free to make contact to be kept up to date with the latest news and events which may alter your price. Whether a regular business buying currency or a private property investor looking at a one off international payment, I am sure I can offer you something of interest.
I look forward to hearing from you, please don’t forget to vote
Sterling Euro rates hit their best exchange rate level since 2007 during the second week of March this year as the QE in the Eurozone officially began.
The Pound rallied against the single currency as high as 1.42 but this increase was extremely short lived.
Indeed, later that same week Bank of England governor Mark Carney suggested that he’s worried about the strength of the Pound and its potential impact on British exports.
The data from the UK over the last few weeks has generally been quite strong which has kept Sterling high against the single currency.
However, with the election looming, to me it is simply a matter of time before the uncertainty causes Sterling to fall against the Euro.
Later today we see the release of Bank of England minutes at midday and any comments from any of the BoE members could cause volatility for Sterling.
UK industrial and manufacturing production data is due out on Friday and with Sterling having been strong for many weeks I think this could have a negative impact on the data out tomorrow and I expect to see Sterling fall against the Euro.
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