Category Archives: Sterling strength
The Dollar has strengthened during the end of the week vs Sterling following the very positive jobs data which came out yesterday afternoon.
The US economy has added an extra 151,000 new jobs taking the unemployment level for the US down to just 4.9%.
This is now at its lowest level since 2008 and the average hourly rate has also risen. The good news is that for Dollar sellers the recent weakening which happened earlier in the week has now reversed.
However, the amount of new jobs created was lower than expected so the Dollar is not out of the woods yet.
Indeed, the report means that the US Federal Reserve may not raise interest rates as quickly as previously expected which could lead to Dollar weakness in the months ahead.
With the primaries now in motion I think the Dollar could have a very indifferent few months ahead.
If we look at what happened during the UK general election Sterling fell out of favour in the run up to the vote and I think the uncertainty over who will lead the US in the future will have a negative effect on the Dollar vs both the Euro and the Pound.
On Wednesday Fed Chairlady Janet Yellen is due to take centre stage and if she signals a slowdown in the speed of raising rates I think this could also see GBPUSD rates move in an upwards direction.
My prediction for next week is for Sterling to gain vs the US Dollar.
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 email@example.com
Sterling’s struggles have continued this week and despite a slight recovery against the USD, the general trend has certainly been negative. The downward spiral coincided with the start of 2016 and the Pound has failed to replicate the good feeling of last year and this has been reflected in the current exchange rates.
GBP/EUR rates have dropped below 1.30 today and as I’ve discussed in previous posts, this is a key resistance level for the Pound. If we see another aggressive move for the EUR the Pound may struggle to break back through it and whilst my underlying feeling has been that the Pound would start to find some support, the current trend is concerning for those clients holding GBP.
It is slightly better news for those clients looking to purchase USD, with the Pound fighting back over the past 48 hours. The pair is floating around 1.45 having spent most of last month closer to 1.40. Poor employment figures in the US have helped to stem the flow but based on the current economic climate in the UK, I am not anticipating this positive spike to continue. As we move through the year we may see Sterling improve, as the US elections are likely to cause some uncertainty and the hope for those clients holding GBP is that 1.40 will provide some protection if the rates do start to drop again.
Much of the focus this week has been on the UK and with key data releases yesterday, investors were dubbing it ‘Super Thursday’. Unfortunately it was anything but and the Pound suffered as a result. The Bank of England’s (BoE) UK Inflation Report made for grim reading and with BoE governor Mark Carney cutting growth forecasts in the UK, I’m not expecting a major improvement for Sterling in the short-term.
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 on 0044 1494 725 353 and ask one of the reception team for Matt. Alternatively, I can be emailed directly on firstname.lastname@example.org
Sterling is likely to really struggle in the current environment with lots of pressure over expectations the Bank of England will cut growth and inflation forecasts for the UK. There has been immense uncertainty surrounding the UK’s Brexit expected to be finalised in the coming months. The Bank of England is likely to discuss today the uncertainty relating to this event and this will in my opinion undoubtedly lead to GBP weakness. The EU Referendum is just another worry to lump on the back of the pound which has had one of its worst ever starts to a year.
Falling Inflation has removed any need for an interest rate hike and expectations for a hike which seemed so likely only a few months ago are now being price well into 2017. The main trigger for the pound to rise should be an interest rate rise or signs of an improving economy. With little sign of the right conditions arising for an interest rate rise I would expect the pound will really struggle in the coming weeks and months. From an investors point of view I think sterling is really likely to struggle to maintain composure in this market and today’s data is key to highlighting the extent to which uncertainty is rife.
For more information on the latest tends and themes to impact your exchange rate please speak to me Jonathan by emailing email@example.com. In my role as a foreign exchange specialist I am very confident I can offer you some useful facts and information to help you get a better deal.
Sterling has lost value against the majority of major currency pairings. This is due to the factors listed below:
- The EU referendum, during times of political uncertainty the currency in question will weaken. With no resolution for some time this will weigh heavily on the Pound.
- Poor Retail Sales Figures
- Poor Manufacturing Data
- Well below Par Inflation – Inflation currently sits at 0.1% and the target is 2%
- China’s slow down in Growth
The Euro has benefited from China’s slow down with many Investors flooding back to the Euro. This is due to carry trading, where an investor would borrow a currency at a low interest rate, eg the Euro and invest in a riskier currency eg AUD,NZD for higher returns. The global uncertainty sparked by the situation in China has caused investors to panic and move back to the Euro. This combined with the poor data has caused GBP/EUR to drop from 1.42 in December to the low 1.30s where we sit now. It is definitely going to be difficult for Sterling to recover. A big swing could occur if the head the ECB implements lager monthly increments in the Quantitative Easing (QE) Program.
QE is essentially pumping money into a struggling economy in order to stimulate growth. The first opportunity for this to occur will be March. For that reason if I was a Euro seller I may consider moving before. The key data release this week will be the BOE interest rate decision on Thursday. If there is a change in the MPC vote we could see swing si in GBP/EUR value. If you would like a more detailed forecast taking in to account your personal currency requirement please do not hesitate to get in touch using the contact details below.
Due to the Fed introducing a rate hike in December and indicating further rate hikes in 2016 I do not think there is much hope for the Pound against the Greenback for the foreseeable future. I think the general trend will be a drop in Sterling value. There will no doubt be small Spikes in favour of the Pound but it you will have to follow the markets very closely in order to take advantage of these windows of opportunity. Watch out for Non-Farm Payrolls on Friday afternoon which is renowned for creating market volatility. If you would like an expert opinion on when would be a wise time to move on your trade please do drop me an email.
The RBA recently decided against a rate cut despite China’s growth slipping to a twenty-five year low. The Aussie currently stands firm.I do not think a rate hike is out of the question in March however which could bring Sterling back towards the 2.10 level. AUD sellers have to be particularly wise in order take advantage of their trade. Keep in mind resistance levels when you are choosing your target rate.
Timing a trade correctly is vital to maximising your return, with the help of a broker you can expect to be kept up to date with vital data releases and market movement. My clients have been extremely happy with the way their trades have worked out as of late and I would would take pleasure in assisting any new clients with their trade. I will also guarantee to beat any competitors exchange rate. If you have a currency requirement I would recommend getting in touch by e-mailing me directly at firstname.lastname@example.org. Thank you for reading my blog it is greatly appreciated I look forward to hearing from you.
The week ahead for Sterling exchange rates – Economic data of interest and contract types that may assist you (Daniel Wright)
So we have another busy week ahead for Sterling exchange rates including an interest rate decision for Australia tonight, Unemployment data for New Zealand tomorrow night, Bank of England interest rate decision and meeting minutes on Thursday lunchtime followed by Non-Farm Payroll data due out on Friday afternoon.
There is indeed plenty for the market to feel off of this week and I would expect some fairly large swings, especially for the Antipodean currencies (Australian and New Zealand Dollar) overnight early in the week. With the possibility of such large movements overnight it is key that you have protection in place should you be looking to carry out a currency exchange in the near future.
All the writers here at Pound Sterling Forecast work for a currency brokerage with a turnover of over half a billion Pounds a year, which means we have access to fantastic rates of exchange. Even if you feel you are getting a good deal elsewhere at the moment I would be extremely surprised if we couldn’t do better for you. You can email me (Daniel Wright) the creator and main editor of this site on email@example.com with a brief description of what you are looking to do and a contact number and I will be happy to contact you personally. You can also call me during U.K office hours on 01494 787 478 (please ensure you ask for Daniel Wright).
We have a number of contract types that can help you during such volatile times including the following:
Forward contract: This is where you can lock into a rate of exchange for anything up to two years in advance with just a small deposit. This is really handy for anyone buying or selling a property overseas that would like to protect some or even all of their funds against currency fluctuations. I see time and time again clients agreeing to purchase a property overseas and putting down a deposit only to find themselves in a tricky situation later down the line when coming to pay for the balance on the property because the rate has dropped so much. For some reason even the most sensible people decide to effectively gamble thousands of Pounds based purely on hope over actually having knowledge that an exchange rate will go their way. firstname.lastname@example.org if you would like more information.
Limit order: If there is a particular rate of exchange you would like to achieve but the market just is not there yet then you can place a limit order into the market. This order is free and can be cancelled or amended at any time you like as long as it has not gone through, but basically means that if at any time 24 hours a day/7 days a week your rate becomes achievable then your currency will be bought out automatically and we will just contact you to let you know the good news. email@example.com if you would like more information.
Stop Loss: This contract type is handy if you are working to a tight budget and cannot afford to go any lower than a particular rate and works in a similar way to the limit order above, yet will trigger should your buying rate hit your chosen lowest possible point. Some clients like to ‘chase the market up’ and raise their stop order on a daily basis when the market is moving in the right direction for them. firstname.lastname@example.org if you would like more information.
I have no doubt this will be a busy week, please do feel free to get in contact with more information on the above or if you have an exchange you with to carry out and you would like to know what rate we can offer you.
|09:30||UK||GBP||Markit Manufacturing PMI (Jan)||51.8||51.9|
|09:30||UK||GBP||Consumer Credit (Dec)||£1.300B||£1.476B|
|09:30||UK||GBP||Mortgage Approvals (Dec)||69.60K||70.41K|
|13:30||US||USD||Personal Consumption Expenditures – Price Index (YoY) (Dec)||0.4%|
|13:30||US||USD||Core Personal Consumption Expenditure – Price Index (MoM) (Dec)||0.1%||0.1%|
|13:30||US||USD||Personal Income (MoM) (Dec)||0.2%||0.3%|
|13:30||US||USD||Personal Spending (Dec)||0.1%||0.3%|
|13:30||US||USD||Personal Consumption Expenditures – Price Index (MoM) (Dec)||0%|
|13:30||US||USD||Core Personal Consumption Expenditure – Price Index (YoY) (Dec)||1.3%|
|14:30||CA||CAD||RBC Manufacturing PMI (Jan)||47.5|
|14:45||US||USD||Markit Manufacturing PMI (Jan)||52.7||52.7|
|15:00||US||USD||ISM Manufacturing PMI (Jan)||48.0||48.2|
|15:00||US||USD||ISM Prices Paid (Jan)||34.0||33.5|
|15:00||US||USD||Construction Spending (MoM) (Dec)||0.6%||-0.4%|
|16:00||EMU||EUR||ECB President Draghi’s Speech|
|18:00||US||USD||Fed’s Stanley Fischer speech|
|TUESDAY, FEB 02|
|03:30||AU||AUD||RBA Interest Rate Decision||2%||2%|
|03:30||AU||AUD||RBA Rate Statement|
|08:15||CH||CHF||Real Retail Sales (YoY) (Jan)||-1.3%||-3.1%|
|08:55||DE||EUR||Unemployment Change (Jan)||-7K||-14K|
|08:55||DE||EUR||Unemployment Rate s.a. (Jan)||6.3%||6.3%|
|09:30||UK||GBP||PMI Construction (Jan)||57.6||57.8|
|10:00||EMU||EUR||Unemployment Rate (Dec)||10.5%||10.5%|
|21:30||US||USD||API Weekly Crude Oil Stock||11.4M|
|21:45||NZ||NZD||Unemployment Rate (Q4)||6.1%||6.0%|
|21:45||NZ||NZD||Employment Change (Q4)||0.8%||-0.4%|
|21:45||NZ||NZD||Participation Rate (Q4)||68.6%|
|WEDNESDAY, FEB 03|
|00:00||NZ||NZD||RBNZ Governor Wheeler Speech|
|00:30||AU||AUD||Trade Balance (Dec)||-2,500M||-2,906M|
|01:45||CN||CNY||Caixin China Services PMI (Jan)||50.2|
|02:30||JP||JPY||Bank of Japan Governor Kuroda Speech|
|08:00||EMU||EUR||Non-monetary policy’s ECB meeting|
|08:15||ES||EUR||Markit Services PMI (Jan)||54.5||55.1|
|09:00||EMU||EUR||Markit PMI Composite (Jan)||53.5||53.5|
|09:00||EMU||EUR||Markit Services PMI (Jan)||53.6||53.6|
|10:00||EMU||EUR||European Commission Releases Economic Growth Forecasts|
|13:15||US||USD||ADP Employment Change (Jan)||195K||257K|
|14:45||US||USD||Markit PMI Composite (Jan)||53.7|
|14:45||US||USD||Markit Services PMI (Jan)||53.7|
|15:00||US||USD||ISM Non-Manufacturing PMI (Jan)||55.1||55.3|
|15:30||US||USD||EIA Crude Oil Stocks change (Jan 29)||8.383M|
|23:50||JP||JPY||Foreign bond investment (Jan 29)||¥475.3B|
|23:50||JP||JPY||Foreign investment in Japan stocks (Jan 29)||¥-189.2B|
|THURSDAY, FEB 04|
|00:30||AU||AUD||National Australia Bank’s Business Confidence (QoQ) (Q4)||0|
|06:45||CH||CHF||SECO Consumer Climate (3m) (Q1)||-18|
|08:00||EMU||EUR||ECB President Draghi’s Speech|
|12:00||UK||GBP||BoE Interest Rate Decision (Feb 4)||0.5%||0.5%|
|12:00||UK||GBP||BoE Asset Purchase Facility (Feb)||£375B|
|12:00||UK||GBP||Monetary Policy Summary|
|12:00||UK||GBP||Bank of England Quarterly Inflation Report|
|12:00||UK||GBP||BOE MPC Vote Unchanged||8||8|
|12:00||UK||GBP||BOE MPC Vote Cut||0||0|
|12:00||UK||GBP||BOE MPC Vote Hike||1||1|
|12:00||UK||GBP||Bank of England Minutes|
|12:45||UK||GBP||BOE’s Governor Carney speech|
|13:30||US||USD||Initial Jobless Claims (Jan 29)||278K|
|15:00||US||USD||Factory Orders (MoM) (Dec)||-2.6%||-0.2%|
|22:30||AU||AUD||AiG Performance of Construction Index (Jan)||46.8|
|FRIDAY, FEB 05|
|00:30||AU||AUD||Retail Sales s.a. (MoM) (Dec)||0.5%||0.4%|
|00:30||AU||AUD||RBA Monetary Policy Statement|
|05:00||JP||JPY||Coincident Index (Dec||111.9|
|05:00||JP||JPY||Leading Economic Index (Dec)||103.5|
|13:30||US||USD||Nonfarm Payrolls (Jan)||190K||292K|
|13:30||US||USD||Average Hourly Earnings (YoY) (Jan)||2.5%|
|13:30||US||USD||Unemployment Rate (Jan)||5%||5%|
|13:30||US||USD||Labor Force Participation Rate (Jan)||62.6%|
|13:30||US||USD||Average Hourly Earnings (MoM) (Jan)||0.3%||0.0%|
|13:30||US||USD||Trade Balance (Dec)||$-43.0B||$-42.4B|
|13:30||CA||CAD||Unemployment Rate (Jan)||7.1%|
|13:30||CA||CAD||Net Change in Employment (Jan)||22.8K|
|15:00||CA||CAD||Ivey Purchasing Managers Index (Jan)||42.5|
|15:00||CA||CAD||Ivey Purchasing Managers Index s.a (Jan)||50.3||49.9|
|18:00||US||USD||Baker Hughes US Oil Rig Count||498|
|20:00||US||USD||Consumer Credit Change (Dec)||$16.00B||$13.95B|
I have no doubt this will be a busy week, please do feel free to get in contact with more information on the above or if you have an exchange you with to carry out and you would like to know what rate we can offer you. You can call me on our trading floor 01494 787 478 or email me directly email@example.com and I look forward to assisting you.
February is a very important month for sterling because we will get the latest news on the UK’s Referendum information and the Bank of England Quarterly Inflation Report. The pound has been sold because of worries over the EU Referendum or ‘Brexit’, at this point we know very little hence sterling being on the backfoot. Sterling should react to the latest news on this event with interest, February could bring with it three key points.
3 Key Points due on the Brexit in February which will impact GBP
1 – Referendum Date. Unknown when we will get the date but it could be as early as June or as late as 2017. Once we know the date we can begin to plan and asses how the pound will react.
2 – EU Re negotiations. David Cameron is renegotiating the UK’s relationship with the EU to present the public with a clearer choice ahead of the Referendum. Headlines around good news on how this is going should cause the pound to rise, bad headlines could see sterling slide!
3 – EU Summit 18-19th February. This is when we might know the results of any re negotiations for the UK. Once we know this information markets can digest the information and decide the likely outcome and take positions on the outcome.
Markets hate uncertainty and at present we have lots! Next week is the latest news on the UK economy from the Bank of England which is difficult to be viewed in a positive light but could surprise us. It seems every time the Bank of England or Mark Carney speak sterling dips so this is a very important release.
If you are buying or selling sterling in the future next month will give us clearer direction as we learn the latest news on events that will impact sterling exchange rates. Whether you are buying or selling the pound we are here to help! This year is critical for the UK with the EU Referendum having the potential to really upset decades of economic and political cohesion between the UK and the EU. On amounts of £10,000 to multi millions we work with business and private clients to assist with the very best rates of exchange and provide a helpful, friendly and experienced broker service to guide you through the foreign exchange market. For a quick overview of the market and all of your options when considering a large currency purchase please email me Jonathan on firstname.lastname@example.org.
Another fairly quiet day on the markets today for those with an interest in buying or selling Sterling, however tomorrow I would expect to see a little more volatility.
The last working day of the month can lead to sharp movements without warning as we see month end flows…. basically companies and funds netting off positions in advance of a new month. Quite often on the last working day of the month Sterling can become quite volatile against all major currencies as we see this happen , so it is important if you have a fairly imminent transfer to make that you keep in close contact with a proactive broker.
Here at Pound Sterling Forecast we do not only give you up to date market information but we can help you with exchanges too. We can get the very top levels of exchange on the markets due to our vast buying power and we pride ourselves on helping our clients with the timing of when they exchange their currency. If you would like me (Daniel Wright) the creator of this site and a Director at Currencies.co.uk to help you with a transaction or merely to give you a quote then feel free to email me personally on email@example.com and I will be more than happy to get straight in touch.
Economic data of note tomorrow is European inflation data, out at 10:00am (expectations are for a jump to 0.4%) which may give the Euro a little boost if matching that figure. I wouldn’t be surprised to see it fall short and to offer an opportunity to purchase Euros at a slightly better rate.
Later in the day we have U.S Growth figures – These are due out at 13:30pm and expectations for this is a level of 0.8%. This release can impact all major currencies as they may alter global attitude to risk.
For those with a Canadian Dollar interest we have growth figures for Canada at exactly the same time so be aware we may see a little volatility shortly after this period.
If you are looking to exchange any currency in the near future then it is well worth getting in touch with me. You can call me during U.K office hours on 01494 787 478 (Please ask for Daniel Wright) or you are welcome to email me with a description of what you need to do on Djw@currencies.co.uk and I will be more than happy to put together a game plan together with you.