Category Archives: Sterling weakness
Why the sterling rally may now be over!
I have been watching with interest GBP movements of late very sure that we are soon to be witnessing a decline. Yesterday’s fall has continued today and I cannot see any immediate return to the kind of trading levels we saw earlier this month. If you are looking to sell the pound to buy a foreign currency say for an overseas property purchase or for business, buying sooner rather than later may be sensible. If you do not have full availability of funds a forward contract could be perfect.
Today the IMF has said the UK is a long way from from recovery and this is likely to weigh on sterling in the short term. We have pointed out the major problems for the pound in many posts and it is likely this is the start of another dip. If you are selling a foreign currency to buy sterling then you are looking at an excellent opportunity that may yet get better in the short term. Where we go from now will depend on the economic data releases before the end of the week but it is clear a negative sterling bias has developed. If you are selling beware of getting too excited as the trend will of course depend which currency pair you are interested in! For a full overview of your transfer and to be kept informed of the latest news on your rate please register your interest at jmw@currencies.co.uk
Important data this week will be the GDP data due tomorrow at 09.30 am UK time. Expectations for the release are at 0.3% growth but any deviation, (hesitation or repetition) could cause market movements! Friday we have German business consumer confidence and US Durable goods orders, all potential market movers. Sterling will I feel remain on the back foot but we could of course see some profit taking or even a ‘Friday Run’ to provide a quick boost. Remember too the Bank Holiday on Monday for the UK, this will affect payments internationally and you may find it difficult to book a price with a currency dealer on this day. Taking advantage of our ‘Market Watch’ service may be invaluable to avoid the disappointment of missing out on your desired rates over the weekend. As usual please contact me directly on jmw@currencies.co.uk to find out more, an account can be opened instantly and you can be trading within minutes. We offer same day payments so ‘not having time’ is no excuse to settling for poor exchange rates!
The sterling rally always looked to be under pressure from weaker UK data and the possibility of more QE down the line. It appears that just as quickly as it started the pound is likely to be weakening again soon.
As well as offering assistance planning and managing your exposure to the currency markets we also offer exchange rates for which we have won awards. For a free, no obligation discussion of all the events affecting your rate please feel free to contact me directly on jmw@currencies.co.uk or call 01494 787 478 and ask to speak to me Jonathan
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Bank of England Minutes cause Sterling exchange rates to fall (Tom Holian)
After a good run against the Euro of late Sterling has had a difficult few days to the start of the week as GBPEUR rates have dropped by 2 cents. There are a number of factors to consider that have been negative to the Pound. As highlighted in yesterday’s report Inflation rates fell which caused Sterling to drop against the Euro.
In theory if inflation is low it means that the Bank of England can keep interest rates low for a longer period of time which means less confidence in investing in Sterling therefore causing the Pound to weaken.
The Bank of England minutes out this morning at 930am have seen a 6-3 split against continuing with further Quantitative Easing. The worry for the markets is that many doubt the Bank of England’s commitment to try to affect Inflation.
The recent extension of further bond-buying by the US has led to a huge amount of Dollar strength recently and with the UK deciding to opt against further QE themselves this could be another reason for Sterling’s recent weakness.
With the new Governor Mark Carney due to take over from Mervyn King in July his stance during his time in Canada is to keep interest rates low. If you’re considering making a currency transfer and want to ensure you are getting competitive rates of exchange that can improve upon the high street banks then feel to contact me directly for a free quote. Tom Holian teh@currencies.co.uk
The UK has this morning published Retail Sales which were 1.3% lower in April than in March as bad weather continues to blight the UK. Food sales also fell to their lowest monthly level in almost two years. With the UK having avoided a triple dip recession recently this gave Sterling a welcome boost but potentially the release has just papered over the cracks.
If you are buying or selling Australian Dollars feel free to check out our sister website www.australiandollarforecast.com which is more specific to your needs.
Surprise Dip in UK Inflation Figures Hurts the Pound (Matthew Vassallo)
The Pound has lost ground against both the EUR and USD during Tuesday’s trading, following this morning’s announcement that UK inflation figures fell during April. This announcement was not widely anticipated and came as a shock to investors, who hastily pulled their funds away from GBP. The news has only added to already growing fears over the long-term growth prospects of the UK economy, despite the recent news that we managed to avoid a further recession.
Today’s data will also lead many to believe that the Bank of England (BoE) now have further leeway to implement another round of Quantitative Easing, which will generally be viewed by the markets as a negative for that particular economy and may ultimately effect the strength of its currency.
GBP/EUR rates had remained fairly flat over the past few trading days but today’s poor economic data caused the Pound to fall by a cent against its EUR counterpart and a cent and a half against the USD. I expect further volatility on GBP/EUR, although any move back towards 1.20 will be dependent on how events in key Eurozone economies fare over the coming weeks. Personally I do not expect rates to break through 1.19 based on the current economic climate, with a move back towards 1.16 a possibility as the UK economy stagnates again during Q3 of this year. Although the USD has moved back through 1.52 against GBP, I do feel the spike will be short lived and I anticipate GBP/USD rates to move back towards 1.53 over the coming days.
Here at www.poundsterlingforecast.co.uk we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements then please call us on 0044 1494 787 478 or email me directly at mtv@currencies.co.uk.
Sterling exchange rates await key inflation data this morning – What may happen to the Pound?
Sterling exchange rates are once again still fairly flat against the majority of major currencies, as we await inflationary data due out at 09:30am this morning.
Inflation data is key at the moment for the bank of England and it appears to be a thorn in their side, should inflation creep up too high we could start to see big calls for a interest rate hike as this is a route that can be taken to tackle high inflation. An interest rate hike is generally seen as positive for the currency concerned and a rate cut is seen as negative so this could lead to a little boost for the Pound.
Tomorrow is also key, we have the Bank of England minutes from the last interest rate decision (the first since being out of recession) and any indications of rate hikes or quantitative Easing may lead to a volatile Wednesday morning for the Pound.
Do you carry out currency transfers and find our information useful? Did you know we can help with currency exchange as well? We can get award winning rates of exchange and also offer a great level of customer service for bank transfers ranging from £1000 to multi million Pound transactions. Email me today djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you.
Could we see some more GBP strength? Where next for Sterling rates? (Alistair Ryan)
Sterling has made a fair bit of ground against most major currencies over the past couple of days. This seems to have come off the back of governor of The Bank of England Mervyn Kings Inflation Report yesterday. This was his last inflation report before he hands over the reigns to Mark Carney in July and he announced an improved growth forecast on the state of the UK economy. Since the start of the financial crisis this is the first time data has been revised in a positive manner. This is a very positive boost for the pound and although a lot of people expected it and it could have been marginally priced in to the markets we have still seen Sterling gain against the majority of currencies.
Jobs data out for the UK yesterday was a bit of a mixed bag. It was announced that although the number of unemployed people had risen, the overall percentage of people out of work fell. It is usually the way in the UK that as soon as some positive data comes out there is another data release out to counteract it. Although this may not be an extremely bad stat for the UK it does highlight that there is still a lot of work to do but we are going in the right direction.
I generally feel that we will see more Sterling strength in the near future as it seems that we are seeing a lot more positive data coming out of the UK at present. We have recently seen better than expected figures for Manufacturing, Construction and Services and I believe that unless something drastic happens in any of the main sectors the pound will gain some more ground.
If you have an upcoming currency requirement we have a number of different contract options that can help safeguard your funds against market movements. If you would like to speak with one of our specialist, friendly currency brokers then please contact me direct at atr@currencies.co.uk
Pound strength following King Speech (Steve Eakins)
Today, which is probably the busiest day this week has already provided a few surprises. It was this morning confirmed that France has re-entered a recession creating euro weakness, UK Unemployment is improving and then currently the current Governor of the Bank of England, Mervyn King, in his last speech seems to be talking the value of the Pound up. In summary GBPEUR rates have now risen from the 2 week low at the beginning of the day towards a near 4 month high we last visited 4 weeks ago.
So what next for GBPEUR exchange rates?
Near future – EURO buyers may want to hold off till tomorrow when we have the last big data release for GBPEUR this week when the Eurozone confirms their Consumer Confidence figures for April. The expectation is for this data to show a contraction so rates may climb further for GBPEUR following this news which is released at 10 am BST. Euro sellers may want to move before hand as a result.
Medium term – Next week we have UK Production Price Index, UK Retail figures, Bank of England minutes, UK GDP figures and UK Mortgage approvals. Expectations for these releases will be more concrete on Monday so keep reading here for the latest forecasts and updates on these releases. This should help highlight potential buy and sell opportunities when it may be the best time to trade through next week.
Longer term – A lot hinders on the new Bank of England Governor Mark Carney that starts his post at the end of June. He may want to come in with an instant impact changing interest rates or the current asset buying program. It may the beginning of July when we see this and is already expected to be an interesting event that may give direction to exchange rates for the following few months.
If you are in the currency market and are interested in a more personal view on how the above events could affect you, feel free to contact us on the normal number (01494 787 478) or myself personally, Steve Eakins via email at hse@currencies.co.uk
Many Market Movers in May! Can sterling go higher?
As we approach the halfway point of the month we see the pound holding some of the gains we have witnessed in April but still very much under pressure! Unfortunately there is very little on the horizon to indicate significant further gains this month. If you are selling pounds to buy another currency holding out for further gains could be very risky, current levels should not be easily dismissed. Here are some of the key thing to note if you are buying or selling which may affect your rate.
If you would like more information on a particular subject or on events surrounding your particular transfer please speak with me directly on jmw@currencies.co.uk
Will the UK leave the EU? Expect pressure on sterling due to political uncertainty. Markets and investors want certainty in their investments. Fears of the damage a split Tory government, the rise of UKIP and a broken coalition would do to UK business weighed on sterling yesterday. Can Cameron tackle the ghost of conservative past and deal with the question of Europe? It is doubtful I have to say and this will weigh down the pound.
UK Growth Last months data was impressive and welcome but 0.3% is not anything to get too excited about. True the latest data sets have all been positive but the marginal improvements on what were dire figures still have a long way to go. Ultimately the UK’s stagnant housing market (particularly outside London) needs invigorating – Construction is the main drag in recent years. The second revision of growth figures at the end of the month could easily be a market mover.
Depending on which currency pair you are trading there will of course be many other things to move the market. Looking in my crystal ball (which has been pretty clear lately) I cannot see significant gains for GBP against the majors. Maybe a cent or two? Once again I see more danger of things dropping as the confidence of the last few weeks wears off.
If you have a transaction to consider I would be interested to speak to you explain the market and offer our services with a view to getting you the best deal. For more information please email on jmw@currencies.co.uk
I look forward to hearing from you!
Bank of England Quarterly Inflation report, EU GDP figures and the Australian Budget. Busy week on the currency markets! (Mike Vaughan)
Sterling started the week poorly against a number of currencies falling against the Euro and US dollar but continuing its recent resurgence against the Australian dollar. This week there is plenty of data to keep anyone with a keen eye on the money markets with some of the notable data sets as follow:
- Today 09:30 BST - Australia will release its yearly budget. This will be keenly viewed as the Australian government faces questions about its handling of the economy ahead of elections later this year. With the economy having been affected by weaker global forecasts and in particular from China, for which the Australian economy is heaviliy reliant, the outcome of the budget could be very interesting. Some analysts say that while the mining sector has been the driving force behind Australia’s steady economic expansion, other parts of the economy have stagnated or grown much less quickly. A key reason has been the strength of the AUD and the RBA (Reserve Bank of Australia) have been open in highlighting their concerns and may act to devalue the dollar, potentially good news for those buying dollars.
- Wednesday 10:00 BST- anyone with an interest in the Euro should watch out for EU GDP figures. Figures are expected to stay at -0.9% but any deviation from the expected figure and watch out for volatility on Euro exchange rates.
- Wednesday 09:30 BST – UK unemployment figures expected to stay at 7.9%
- Wednesday 10:30 BST – Bank of England Quarterly Inflation report and Mervyn King press conference. The BofE publishes a report of the detailed economic analysis and inflation projections on which the Bank’s Monetary Policy Committee bases its interest rate decisions, and presents an assessment of the prospects for UK inflation over the following two years. Watch out for any clues with regards to QE, I personally believe the Bank will stay firm on its current p[olicies until the new governor Mark Carney takes over from Mervyn King in July.
- Friday 00:45 BST – Japan GDP release, expected to show an increase from a flat 0% to 0.7%.
- Friday 13:30 BST - to finish off the week on Friday we have inflation figures and unemployment data from the US at 13:30 BST.
As you can see we have plenty of data released for the rest of the week. To be kept up to date with the impact these data sets may have for your individual requirement then please contact me and I will happily run though my forecasts and run through the various contracts we can offer to help maximise your currency exchange. I am very confident I can help achieve a better rate than your current provider. Please call the office on +44 (0)1494 787478 or email me (Mike) with a brief overview of your requirement and I will gladly contact you to help with your money exchange. I can be reached at mgv@currencies.co.uk
