Pound Sterling Forecast

Sterling has been on a terrific run against a host of currencies but this afternoon has started to weaken against most of the majors. We have seen the pound dip by 0.5% against the Euro & down to a 4 and a half week low against the USD while losing up to 1% against some southern hemisphere currencies. Contact me at bma@currencies.co.uk if you want to speak with meabout the outlook going forward.

The Governor of the Bank of England released his inflation report this morning and it sent the pound tumbling. He forecasted weaker growth and their 1.6% inflation forecast left room for more quantitative easing (QE). The negative outlook of QE is where the Bank of England print extra money to buy bonds which prompts traders to sell the pound hence weakening the currency. This morning’s fears go to show how much of a dent the mere mention of QE can effect sterling exchange rates.

The BoE also commented that escalating dangers from the euro zone crisis posed risks to the UK economic outlook, mainly in the banking sector which also contributed to a reversal of the recent trend. Events in Europe are driving the currency markets at present causing big swings for a host of currencies. We are expecting fresh elections in Greece and if things do not go well then this could be the beginning of seeing a country leave the Euro zone. If this did occur then we could see the currency market erupt with extremely large trades moving out of the riskier currencies and back to the safe haven ones.

The gloomy outlook from the BoE and the fact Britain is back in recession may  hamper demand for the pound while the situation in Greece and the whole of Europe remains very uncertain. This leads me to believe that we may see the pound continue to struggle against the USD and should be rangebound between 1.57-1.60 in the near term. Against the Euro I do not expect to see a big loss for sterling and again will linger around this 1.24-1.2550 range.

If you are selling Euros to buy the pound and hoping that we may see a big decline against the Euro on the back of the QE scenario I personally feel that we will not see any significant movements in your favour so my recommendation would be to look at selling your position sooner rather than later to stop the recent loss.

Here at pound sterling forecast you can place limit orders in the markets and forward buy your currency if you do not have full funds available at present and would like the peace of mind aspect as to how much you will be achieving. if you would like to speak with me about any major currency pair we can look at all the options that are available to you to help you make as big a saving over the banks as possible. Please feel free to send me any questions or queries that you may have to bma@currencies.co.uk and we can discuss the mechanics of trading.

Ben Amrany

Sterling exchange rates fell yesterday to a 3 week low against the greenback falling back into the 1.59 territory. This is a something that I personally feel could continue, particularly with the continuing unrest in Europe. With the US dollar still very much the global currency of choice (mainly as so many commodities are priced in dollars) during times of unrest the dollar will normally outperform most majors. I for one feel this trend is close to happening as investors digest the problems facing Spain (their bond prices reached a record high for 2012 on Monday at 6.218%). This is creeping ever closer to the 7% levels at which Greece, Portugal and Ireland had to seek bailouts and with Spain potentially a much larger problem, I really feel this will weigh on the Euro (I would expect levels to remain above 1.25 heading towards 1.26 and beyond in the short term).

For this reason I too think the US dollar will begin to find support as investor’s look to move their money to the relative safety of the dollar and we could easily see a move back towards 1.58 in the coming days. For the best exchange rates on your transfer and to discuss the various contracts we can offer in an attempt to maximise your currency exchange then please email Mike at mgv@currencies.co.uk

Greece heads back to the polls as Hollande officially takes over from Sarkozy

Greece is set to go to the polls again after days of coalition talks failed to produce an agreement on a new government, on the day the new French president Francois Hollande was officially sworn into office. Mr Hollande said he was aware of the challenges ahead, including the debt crisis, and vowed to “open a new path in Europe”.

Mr Hollande called for  “a compromise” over the German-led focus on austerity as the way out of the Eurozone, however in on goings in Greece still appear to be dominating the Eurozone and the Euro.

At the elections on 6th May, the results showed a majority of Greek voters backing parties opposed to austerity plans demanded by the EU and IMF in return for two bailouts. Polls suggest the leftist Syriza bloc, which came second in the 6th
May vote and rejects all further cutbacks, could become the largest party after a new election. Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.

However European leaders say they will cut funding for Greece if it rejects the bailout agreed in March. This would effectively mean bankruptcy for Greece and German Finance Minister Wolfgang Schaueble again ruled out amending the agreement. The Greek president Karolos Papoulias will meet all political leaders at 13:00 local time (10:00 GMT) on Wednesday to put in place an interim government until the new vote, which is expected to take
place on 10th or 17th June.

I feel this will continue to heap pressure on the Euro and any Euro sellers, certainly if funds are not liquid, may wish to consider a forward contract to guarantee their rate in advance. For Euro buyers this is potentially good news, however for anyone with an interest in GBP/EUR look out for the unemployment figures and Bank of England Inflation report at 09:30 and 10:30 respectiveley.

What now for the Aussie, Kiwi and Rand?

Recent moves against these three currencies have been dramatic to say the least. Since the year lows in February we have seen the pound gain 9.5% against the Aussie, 9.7% against the Kiwi and 10.8% against the Rand. On a transfer of £200k between the high and low during this time this makes a respective difference of AUD 29,400, NZD 41,400 and ZAR 288,000. Is it time to take advantage?

This recent trend must be somewhat of a relief to the many clients and individuals emigrating to that part of world. I personally feel with the volatility in Greece this trend could continue in theshort term. But to use the analogy of an elastic band, I do feel these currencies could snap back at any point. However until a degree of stability is restored in Greece (Christine Legarde head of the IMF was quick to rule out a breakup of the Euro) this run may continue, just make sure you are in a position to take advantage.

To dicuss the this report and my views or to run through yoru individual exchange requirement then please email Mike at mgv@currencies.co.uk or call 01494 787 478

The Pound has started the week off fairly strongly once again against most major currencies as European woes continue and global risk seems to be getting lower by the hour… I know my shares are certainly tumbling off the back of this news too which is quite depressing!

Pretty much daily now we are seeing new problems either economically or politically throughout the Eurozone and it looks like this trend could easily continue.

We have France with a new President seemingly unwilling to get involved with austerity, Greece not being able to agree on anything, Spain bailing out their banks and a whole host of other problems dotted around.

Nothing is set in stone and suprises can pop up at any point on the currency market but with the Pound seemingly being used as a safer haven and all of the above actually happening personally if i had Euros to sell I would be looking at doing something fairly rapidly.

Regarding buying the riskier currencies it does become tempting to at least hedge your bets and book half of your requirement so that you can at least guarantee yourself half of your funds at a rate that would have been fantastic around six weeks ago.

If you were planning on using your bank for the exchange then i can assist you, likewise if you currently use a broker I am only one email away for you to compare to make sure you really are getting the best rate of exchange for your transfer.

Feel free to get in touch with me directly djw@currencies.co.uk or join or mailing list by filling in the form at the top right hand corner of this page, only this morning I helped a client who has ended up with over £12,000 more of Australian Dollars since he has been following this site both in terms of holding off from booking out a rate when we were a lows a few weeks back and getting a much better rate of exchange than his bank now he has decided to book out his currency.

Sterling exchange rates have fallen slightly this morning but are still set to post strong gains across the board this week, continuing a run that has now seen the pound set some levels not seen for a good while. Notably reaching a high not seen since November 2008 against the Euro, remaining close to a seven month high against the greenback (USD) and trading at year highs against the AUD and NZD. However it is not just the so called major currencies that the pound has posted strong gains and I thought the below table would make interesting reading for regular followers of this website.

Working for one of the UK’s largest independent currency brokers I come across a number of different clients with varying requirements predominantly dominated by the majors. Remember, at Currencies.co.uk we are happy to assist you with the exchange and transfer of money for a huge variety of reasons such as property, emigration, investments, cars, weddings, hotel bills, imports and exports to name but a few. So, if you, a friend, relative, colleague or your business have currency exposure that you have not already discussed with a broker then email me directly to mgv@currencies.co.uk  – alternatively call 01494 787478 and ask for Mike quoting PSF.

To finish off lets take a look at the data today to keep a close eye on:

This morning at 09:30 we have UK PPI (Producer Price Index) data – figures expected to fall sharply from 1.0% to -1% – this could hamper to the pounds recent run this morning.

At 13:30 we have US PPI data – expected to post a small fall from 0.3% to 0.2% – this could cause some small dollar weakness in the afternoon session but I would expect this to be minimal.

Finally also at 13:30 we have Canadian unemployment figures, expected to increase from 7.2% to 7.3% – watch out for the loonie (CAD) to weaken a touch this afternoon, potential creating some good buy opportunities.

To discuss the best way to exchange your foreign currency and to discuss my personal views email Mike at mgv@currencies.co.uk

Today sees the biggest economic release of the week in the form of the Bank of England Interest Rate decision. This will dictate sterling movements today and is well worth being aware of if considering any currency transfers involving the pound.

In the first full working week of every month the Bank of England’s Monetary Policy Committee meets to discuss whether or not they will make any changes to the UK’s base interest rate and any changes in their ‘asset purchase facility’, also known as QE.

Interest Rates – It is always worth being aware of the interest rate of the central bank for the currency you are concerned with. Generally speaking the lower a rate the weaker the currency. And vice versa the higher the rate, the stronger the currency. In much the same way as a higher interest rate attracts savers to a bank account, a higher central bank rate increases the likelihood of investment in that country and hence currency. The mere sentiment an interest rate will be raised or lowered can cause exchange rates to move as investors move money to take advantage of any perceived future gains.

The UK has had interest rates at 0.5% ( an all time low) for 3 years because of the financial crisis. A lower interest rate helps boost an economy by making borrowing cheaper and increases the chance of growth in the economy. It is highly unlikely we shall see any interest rate movement today, but the fact the UK is probably going to be the first of the US, UK and Europe to be raising interest rates (even though not for at least a year) is causing the pound to strengthen at the moment. The lowering or raising of Interest Rates is not the only way a central bank can influence the economy however…

Quantitative Easing – QE or the ‘asset purchase facility’ as  it is known is the process whereby the Bank of England purchases assets of banks to create extra money which allows the banks to lend more to private individuals and businesses, thereby stimulating the economy. Seen as a dirty word by some, QE increases the money supply and generally causes the currency to weaken. Some would question its effects on the economy but it is impossible to say what state the UK would be in now, had it not been for the previous rounds of QE. Employed by the US and Japan it was previously seen as a method of last resort, now more of a crutch for economies struggling to grow.

Considering the UK is now technically back in recession and Eurozone issues look set to get even more complicated we may see the BoE adopt a pre-emptive strike as they did last year. I personally do not think they will but for anyone looking to purchase the pound, this morning’s news is well worth waiting for. But if you do not see the rate go the way you had wished I would be set for further losses because if there is no change in rates or QE then we may see a ‘relief rally’ as the market picks up slightly countering any drop prior to the release in expectation of more QE.

If you are considering any currency transfers and would like assistance with securing with the very best exchange rates and free no obligation information about all of the events moving your exchange rate including forecasts, please contact me Jonathan directly on 01494 787 478, quoting PSF or email me directly jmw@currencies.co.uk

Any comments, questions, suggestions or enquiries welcome.

Jonathan

If you need to make a transfer into a foreign currency then now may be the ideal time to seriously consider your options. The Pound is the highest it has been against a basket of major currencies for over 35 months. If you have a larger sum to do it may be prudent to hedge your bets and look at securing half of your currency whilst rates are at such great levels.

Sterling Euro

We now have not only Economic problems but also political problems throughout Europe which will no doubt cause big issues in the coming weeks and months. Of course part of the reason that we will have seen rates move up so much of late is the markets reacting in advance so I would be surprised to see the markets completely rocket in the right direction, there may be a little further to go but it would be prudent to at least partly take advantage of this 3 and a half year high.

Sterling Dollar

Fairly range bound of late and I think this pairing has been in the background with Europe and the ‘riskier currencies playing a much bigger part in the play. Most analysts are predicting the Dollar to strengthen back as it is seen as a safer haven in times of low global confidence and I’m sure we will see plenty of that in the near term.

Sterling Australian Dollar, New Zealand Dollar and South African Rand

Many that have moved overseas in the past year or so will be watching these currency pairs with a smile on their face, and those selling to bring back into Sterling may wish to seriously consider their options in case this trend continues.

Personally it is a coin toss – Further rate cuts in Australia may lead to      further weakness for the AUD however some of this move may be in anticipation of that. European problems will weigh these currencies down and I’m fairly sure there are more of those to come. The one thing to remember though is not to get greedy. Those who contacted me initially saying they would love to get 1.60 should look at putting in a limit order at
that level.

If you have an upcoming transfer to make be it large or small, private or corporate then feel free to get in touch with me directly and I will be happy to help you not only get a better rate than you are currently receiving from your bank but a much better level of service too. I can be reached on djw@currencies.co.uk

Both France and Greece are the talking point this morning following election results that may now weigh heavilly on the Euro in the coming weeks and months.

France’s new socialist Presidente Francois Hollande and his anti austerity agenda may now lead to huge disruption for progress in this European debt crisis as he appears to be against Angela Merkel and previous President Sarkozy’s measures and this may cause political troubles throughout Europe. political instability is one of the main factors that can effect a currency and it would not surprise me to see the Euro continue to struggle (not crash but struggle).

This will cause jitters for the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand and may lead to further weakness for these particular currencies this week. once again actual economic data appears to be in the background and political problems are not only front page news on currency websites but front page news accross the world.

I can see this really causing big problems (not quite world war three) but not a million miles away. If you are selling a property in Europe and are worried about rate movements then perhaps you are right, I still somehow have clients holding off and waiting for rates to improve and if you look at the facts and figures then it would not surprise me to see rates stay like this or get worse for a period of time.

If you are concerned about the current market conditions and want to have an experienced and friendly currency broker on your side throughout this crisis then feel free to contact me directly djw@currencies.co.uk and i will be more than happy to assist you in timing (however I cannot directly advise) and getting  you the best rate when you do book out your currency. I reguarly better clients rates by enough to make it worthwhile changing over and will be happy to add you to my ever growing list of clients.

The Pound has once again had an encouraging week against most of the majors as confidence in Sterling is still fairly high – Even with a technical recession hanging over our heads investors seem to be able to see past that and in my opinion the U.K is being seen as “The best of a bad bunch” hence the minor confidence and strength in the Pound.

French elections will weigh heavilly on the Euro over the weekend, and the pending results may lead to an extremely volatile start to the week for those buying or selling Euros. Many of my clients I speak to in France believe that there looks to now be only one winner, and his relationship with Angela Merkel is about as solid as North and South Korea, so if he is elected expect fireworks for the European Debt crisis in the coming months.

Today is fairly important for those with a Dollar interest and indeed interest in the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand. Non Farm Payroll data is essentially the number of people in Non agricultural employment over in the States and is a key indication as to how their economy is performing.

The reason it is Non agricultural is because these jobs may be seasonal and do not give a fair representation of the employment figures. The reason it can cause quite a lot of volatility is because predictions are made in advance and these can be wildly out… As many of our regular readers will know the markets move onb rumour as well as fact, and should the figure come out quite a way from predictions the market does correct itself rather swiftly.

The reason this effects the AUD, NZD and ZAR and pretty much most majors is because as i’m sure you can imagine it will effect attitude to risk and will lead to rapid movements of large amounts of money globally in what generally presents a volatile end to the week.

If you have a currency transfer to carry out either now or in the coming months and you would like me to personally assist you and get you a better rate than your bank or current broker then email me directly djw@currencies.co.uk – I now receive 30,000 unique visitors per month to this site and if you are finding it useful and of interest then why not get in touch and see how else I can help?

I look forward to speaking with you soon, and for those in the U.K enjoy your Bank Holiday weekend

Following better than expected mortgage approval data and not too terrible PMI (Purchasing Managers Index) data we have seen Sterling have yet another gravity defying start in early morning trading.

The Pound is up against pretty much all majors, not by a huge amount but it is still up. Personally I feel that the sudden confidence in Sterling is due to it now being the best of a bad bunch…. Surely any investor with their head screwed on would be wary of the Euro at present and with the potential of QE3 hanging over the head of the Dollar the Pound surely steps forward… Even if we are technically in a recession at present.

The question really is how long will this last??? We have seen Sterling have a few decent spurts like this over the past few years, yet only ended up disappointed with it fizzling out thanks to poor negative movements from the Bank of England who seemingly get twitchy when the Pound gets too strong.

The sensible option in this market is to use a Stop Loss order… This is where you set yourself a worst case scenario in the market e.g 1.22 – If rates should start to drop[ away and that level become your trading level even for a second then your currency is automatically purchased for you, however the order (as long as it is not filled) can be moved at any time so if rates are creeping up you can always ‘chase the market’ up and keep increasing your bottom figure.

The good thing with this is that you know what your worst case scenario is for example the minimum your Euro purchase will cost, the bad part is if the market should jump down to the point your currency is bought and then fly back up again then you have secured your currency and the deal is done. For the less riskier client though this is ideal as you do get to see how the market pans out without losing too much if the market should drop away.

If you want more information on this then feel free to contact me directly djw@currencies.co.uk

The pound lost slightly today in early morning trading due to PMI Manufacturing data coming out worse than expected. The figures still pointed to a sector in expansion, but were not a strong as predicted. This release makes tomorrow and Thursday’s PMI data key for anyone buying or selling the pound this week.

These PMI (Purchasing Managers Index) surveys are a snapshot of the relevant sector and provide the most up to date information relating to an economy. They are of course not definitive, but for anyone looking to make a transfer this week or month, they could well set the pace. Don’t forget technically the UK is in recession. The next revision is not until 24th May, but with the currenct estimate at -0.3%, will take quite some upgrading to boost the UK’s current outlook.

Tomorrow at 09.30  we have UK PMI Construction. Construction was the sector that apparently dragged the UK down last quarter and it is expected that this sector like Manufacturing this morning will be slowing down. Tomorrow morning we also have German PMI Manufacturing and German Unemployment. As the biggest Eurozone economy this is well worth being aware of if considering a Euro trade. We are still at close to a 20 month high buying euros with sterling but these data sets could easily change the course for the day.

On Thursday at 09.30 we have UK PMI Services. As with today and tomorrow’s PMI data the Service sector too is expected to be slowing down. As the key concern for the UK is growth, further negative news could really hamper the pound and even cause it to lose value. Thursday afternoon sees the ECB (European Central Bank) rate decision which could well stoke some movements on GBPEUR and EURUSD. And talking of the dollar, we have perhaps the biggest release of the week on Friday with US Non – Farm Payroll. This can move the market on all currencies as investors move money according to what they think may happen. If you are making or considering any currency exchanges it really is worth being aware now of what may happen so you do not miss out.  Exchange rates move every few seconds and we can help not only limit your exposure using our wide range of contracts options and making sure you are up to date with the latest movements, but also make sure your trades go through at the very best commercial rates, above that offered by other brokers and banks. Feel free to make a comparison with anyone of the team directly or by using the contact form on the right hand side. We always go that extra mile for clients who contact us via this site!

And I must say Congratulations go to Daniel for some excellent predicitions yesterday! This just goes to show how by listening to us clients can save money. Of course there are no guarantees but because of our inner knowledge of what actually drives exchange rates we can make what can turn out to be pretty accurate predictions.

As well as the above data there are many more releases concerning the USD,  AUD,  NZD and CAD! If you would like any further information I will be happy to personally assist. You can call me direct on 01494 787 478  or if you prefer email via jmw@currencies.co.uk

We look forward to hearing from you