Category Archives: USD

How well do you really understand what is driving your exchange rate?

The pound looks likely to rise against most of the major currencies longer term as the UK appears likely to raise interest rates in the future. This is important because the raising and lowering of interest rates by a central bank greatly affects the strength or weakness of a currency. Understanding this fact – that the raising and lowering of interest rates greatly affects the strength and weakness of a currency – is key to predicting where exchange rates are headed.

One of the major reasons for GBP strength in 2014 is high expectations the UK would raise interest rates in 2014. This expectation has been pushed well back into 2015, if not 2016 and anyone holding on for this to happen to make an exchange had better have a long time to do so! I remember in 2012 we were almost in an identical position , with expectations high the UK would raise interest rates in the coming year or two. We then had the Eurozone crisis deteriorate (remember Greece on the brink of leaving the Eurozone) and the following Spring the UK entered a triple dip recession and the pound crashed from 1.24 to 1.14 in about 6 weeks!

I do not think we are likely to see such a sharp move but with the General Election and increased political uncertainty on the cards for 2015 a tough patch for the pound appears highly likely. Even though May 2015 seems many months away it is not actually that far in terms of exchange rates. Considering you have seen anywhere from 5-15 cents movement per year for the last few years on GBPEUR, making some plans now for currency in the new year is clearly sensible. 

We offer a range of contract options to fix exchange rates at currency levels and also to automatically purchase when a desired rate is hit (stop / loss and limit order). Speaking with or emailing us with a brief outline of your situation carries no obligation. We are currency specialists who are here to assist in the safe planning and execution of your transfers.

The real risk on exchange rates is doing nothing and leaving it all to chance so to learn more please contact me Jonathan on jmw@currencies.co.uk,

I look forward to hearing from you.

Thank you,

Jonathan

Sterling gets a Lift? (Tom Holian)

With inflation falling below the Bank of England’s target there was an outside chance that the minutes from yesterday’s BoE meeting could have been different from the previous month.

The minutes showed that 7-2 were in favour of keeping interest rates on hold which led the Pound to strengthen marginally against the Euro during yesterday’s trading session.

This morning German manufacturing data has come in a lot worse than expected which has sent GBPEUR rates above 1.25.

In a few minutes UK Retail Sales data is due out and the expectation is for growth of 3.8%. Anything higher could keep Sterling strong against the Euro.

French economic growth has been struggling recently and questions are being raised as to whether the French are taking their situation seriously enough. With growth on the continent struggling there is still a chance that the ECB may intervene with monetary policy at next month’s meeting which could result in Euro weakness in the longer term.

US Inflation data is published at 130pm today and as the world’s leading economy if the data is positive this could result in Dollar strength which often results in Euro weakness.

If you have a currency transfer to make and want to save money on exchange rates then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

GBP/EUR Volatility Likely to Continue (Matthew Vassallo)

It’s been a volatile few days for Sterling exchange rates, with the Pound losing value against both the EUR & USD. This negative trend was created following last week’s UK quarterly inflation report and the suggestion that UK interest rates were unlikely to be raised until the last quarter of next year, news which immediately knocked investors’ confidence in the Pound, pushing it back below 1.25 against the EUR and below 1.57 against the USD.

This morning we had the latest Bank of England Minutes and it was interesting to note that despite last week’s indication that UK interest rates would not be raised anytime soon, two members of the BoE still voted in favour of one now. This news has helped to push GBP back up to 1.25 against the EUR and with Eurozone Construction data coming in worse than expected we could see further gains for the Pound during Wednesday’s trading.

There is likely to further movement on Cable rates this evening as we have the latest Federal Open Market Committee (FOMC) minutes, which are usually a key market mover. These minutes give us an insight into the economic and financial conditions of an economy and can be used as a benchmark for their recovery process.

It is another busy day on the markets tomorrow, with the latest UK Retail Sales figures and Eurozone Consumer Confidence figures. We also have a host of US data, including the latest inflation & employment figures, before ECB president Mario Draghi’s speech on Friday.

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 mtv@currencies.co.uk

GBP Dips are worth capitalising on!

If you think recent drops on sterling were bad you should prepare for worse as these moves are likely to be extended in the future. Next year is a tremendous amount of uncertainty as to where the political situation in the UK will head.

If you are debating any currency transactions why not speak to one of our specialists regarding all of your options. Remember that you can forward buy your currency locking in current levels and rates. I would expect a recovery in  sterling down the line andI feel therefore current levels represent a very good opportunity to sell Euros for sterling.

If you wish to learn more about your situation why not email me Jonathan on jmw@currencies.co.uk

Best Rates of Exchange – When to Buy Euros? Andrew Bromley

Stirling Weakens on Carney Comments

The Pound had a rocky road yesterday as following good Unemployment data, GBP EUR spiked to provide short buying window whilst the market was over 1.28, close to the 2 1/2 year highs. However, GBP was bought back to earth with a bump following Bank of England Governor Mark Carneys speech on the associated inflation report. Carney indicated that as inflation is sitting at a near 5 year low (1.2%), an interest rate increase this side of summer is not going to happen. With the General Election next year, it is my opinion that if the economy warrants it, we will not see an increase until either November or December 2015. This address weakened Sterling to the early 1.27 mark, with today opening up even lower at the 1.2650 region. Those buying Euros may be wise to take advantage of the rates before we potentially see GBP EUR keep sliding down from its spike, potentially to the 1.24 region.

USD The Performing Economy?

USD sellers will be happy to see that we are at a 14 month low GBP USD. Selling below 1.60 was an unrealistic expectation until the Fed decided to finish its bond buying process (Quantitative Easing). The US economy seems to have gone from strength to strength in the last two weeks, and may continue to push GBP back to the 1.55 region and below. USD sellers may want to get their exchange done and take advantage of the low rates, with buyers scratching their heads as to whether or not the Pound will bounce back? My opinion is that Sterling will not push back over 1.60 for the short term, potentially not even until the new year.

Swiss Franc – Sell Now??

On 30th November the Swiss National Bank meets to agree on its next move to support its economy. It has been written on this site previously that there is a ‘peg’ linking EUR and CHF at 1.20. The market is only just above this level, which if breached (a drop below 1.20) would mean the SNB would have to act to support its economy. The SNB believe that CHF has been overvalued for an extended period of time, and it has affected Swiss Businesses ability to compete with potentially falsely expensive stock. There is a good chance that the SNB will weaken CHF substantially, with most currencies to make immediate gains. If you are selling CHF, I would be strongly inclined to get funds exchanged prior to 30th November to eliminate the chance of a substantial loss!

Please do feel free to drop me a line if you are looking to act on any of these currencies.

The direct line to the trading floor is 01494 787 478 or email me ajb@currencies.co.uk

 

 

 

Sterling interest rise goes back further

Expectations for the UK to raise interest rates were pushed back further today as the Bank of England hinted that any such expectations were now probably being pushed back into later 2015. I personally expect the pound will come unstuck further in early 2015 as uncertainty around the UK’s General election takes hold. The uncertainty of the outcome of next year’s election is likely to weigh heavily on investors minds and sterling is going to be in for some tougher times next year. The in or out status of the UK and the EU will be a major headache for investors debating where to put their cash.

If you need to buy a foreign currency with the pound in the next 6 months then moving sooner might be best. If you do not have full availability of funds you can fix a rate without all the money being required to be paid. If you wish to discuss your situation and what might be about to happen in the future why not get in touch on jmw@currencies.co.uk

Exchange Rate Forecast – GBP CHF EUR USD

GBP CHF (Sterling – Swiss Franc)

Today opens up with a big focus on EUR CHF. In September 2011 the Swiss National Bank put in place a minimum level that the EUR CHF could trade at. They set 1.20 as a minimum level, as they felt that any stronger than that would be damaging to the Swiss economy – an overvalued CHF would mean overseas business would seek a cheaper economy with which to trade. With this is mind if you are looking at a GBP CHF trade, there is a very real possibility that you will see a spike in your favour imminently! If you have a CHF Mortgage in Cyprus that you are considering repaying, do get in touch as you’ll want to take advantage of favourable market movements more than others!!

GBP EUR (Sterling Euro) Exchange Rate Forecast 

In terms of Sterling this week, Wednesday morning sees the release of UK wage inflation data and its inflation report. Wages and inflation had been heavily featured in the press this week – even the BBC had a big article on the CPI / Inflation comparison this morning. It is generally believed that wages should rise in line with inflation, leaving space for the Bank of England to increase the base rate of interest in a performing economy. If wage increases are still substantially out of line with inflation, then it would leave Mark Carney at the Bank of England no choice as to keep the Interest rate at 0.5%. This would be interpreted as a sign of weakness for the UK and may subsequently see Sterling weakness.

Friday has a whole host of Eurozone GDP announcements. The Eurozone as a whole is pretty stagnant, as no economy is particularly active in line with where Mario Draghi and the European Central Bank need them to be. I think that Friday will see Euro weakness as unless things change literally overnight, the Germans and French have a lot of ground to make up to be back to where they were performing in say 2007!

GBP USD (Sterling Dollar) Retail Sales on Friday

GBP USD is pretty quiet this week, perhaps a gift for those who have not yet been able to take advantage of the near 12 month best for selling USD. US Non Farm pay roll data (employment) came out lower than expected on Friday of last week, so a continuation of weak US data could be seen and may push GBP USD back over 1.60… If you are Selling USD, I’d be tempted to get exchanged prior to Friday and take advantage of the rates!

Please feel free to get in touch if you have an exchange to do – regardless of the currency pair! We can help you achieve award winning exchange rates, plus open you up to a large range of contract options to help better take advantage of spikes etc.

Please call the trading floor directly and ask for me Andrew Bromley 01494 787 478

or alternatively email AJB@currencies.co.uk

 

We will remember them (Daniel Wright)

Just a quick note from all at Pound Sterling Forecast to show our support for armistice day…  remembering the brave. We will be observing the two minutes silence today so if you do try to call please be aware we may not answer at 11.00am.

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Sterling exchange rates remain fairly flat in trading today – Potential for Swiss National Bank to step in on the Franc again? Wage inflation key for Sterling this week (Daniel Wright)

The Pound has had a reasonably quiet day on the market against most major currencies gaining a little ground back against the Dollar after dropping to a 14 month low last week.

The main news of the day for the currency markets was growing speculation of the SNB (Swiss National Bank) possibly stepping in to devalue the Swiss Franc again as it is hovering dangerously close to the 1.20 mark against the Euro. The SNB have artificially attempted to keep the EUR/CHF rate above 1.20 for a number of years now and with the rate currently sat at the lowest point since November 2012 a move to alter this may be in the pipeline. Should the SNB actually look to do this then we may see the Swiss Franc drop against most major currencies so Sterling exchange rates against the Pound could spike up nicely.

The key for Sterling exchange rates in my opinion this week will be the wage inflation figures due out on Wednesday morning. Wage inflation is one of the most important factors towards an interest rate hike as although the economy does appear to be picking up, unless peoples wages are following suit then we are actually not moving too far in the right direction. Governor of the Bank of England Mark Carney has added in recent comments that wage inflation is vital for an interest rate hike so should this be moving in the right direction we may see the Pound have a good day although unemployment figures and the inflation report also have the potential to counter this.

If you are looking to carry out a currency transfer in the near future involving either buying or selling the Pound then it will be well worth you emailing me directly. I have now had thousands of clients contact me through this site and they have found that they are getting a smoother, more efficient service than their bank or current broker along with a better rate of exchange by using me. You can email me on 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.

Interest Rates & US Non Farm Payrolls (Tom Holian)

Sterling has dipped marginally against the Euro and the US Dollar over the last couple of trading session as UK interest rates were kept on hold. ECB President Mario Draghi did suggest that if unemployment levels remain high this could mean intervening in monetary policy in short term. However, the absence of any change in policy yesterday allowed the Euro to regain a bit of strength.

US Non-Farm Payroll data which has just been released confirmed that 214,000 new jobs have been created in the US  which led to a brief bout of Dollar strength but this has since disappeared as the levels were not as different as expected.

However, the jobless rate of 5.8% is now the lowest since July 2008 so I think we will see Dollar strength going into Monday morning’s trading session.

Janet Yellen is due to talk later this afternoon and depending on her rhetoric I think the Dollar will strengthen against both Sterling and the Euro.

Over the weekend there is a large amount of data for China which could have a big impact on GBPAUD exchange. During the week GBPAUD has tipped past 1.85 and although rates have fallen today for Sterling I think we’ll see an improvement by Monday.

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 teh@currencies.co.uk

 

 

 

 

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