Category Archives: USD

Calm before the storm? (Mike Vaughan)

Sterling reached its highest level against the single currency since August 2012 reaching a peak of 1.273 this afternoon – is this the calm before the storm? With the Scottish independence vote well under-way the market is eagerly awaiting the result of the vote expected for release early Friday morning (expected around 07:00). A yes vote is likely to be catastrophic for the pound with some analysts suggesting as much as a 10% drop in value for sterling, in contrast a no vote will bring a sigh of relief to many and I would look for the pound to fund support in excess of 1% across the major currencies.

Should you wish to remove the uncertainty our trading lines will be open for another few hours and there is still time to help. Email Mike at mgv@currencies.co.uk

As against the Euro, sterling has continued its strong rally against the Australian dollar having shifted 10 cents in last 10 days (5.8%). This makes a difference of AUD 20,000 on a £200k transfer.

Data from Australia has been relatively light this week highlighting how dominant sterling has been and just how the Scottish independence vote is influencing the value of the pound. With voting having started this morning and the results scheduled for 07:30 tomorrow morning, the next 24 hours are likely to be extremely volatile. I for one believe the ‘no’ camp will prevail and this is bound to lend further support to sterling and I would look for a shift towards 1.85.

Overnight the RBA bulletin gave little insight as to future monetary policy but I still believe the RBA will be uncomfortable with the value of the dollar and this 10 cent shift will have been a welcome move

To get assistance with your foreign exchange and to get the best deal on the market email Mike for more information at mgv@currencies.co.uk

Scottish Referendum still dominating the headlines and causing wide swings for sterling exchange rates. (Ben Amrany)

So we are getting closer and closer to the key Scottish referendum tomorrow. The markets over the last couple of weeks have been extremely volatile purely on the back of will the YES or NO campaign be victorious. We are expecting voting to start tomorrow with the decision filtering through in the early hours of Friday morning.

The way that I see it is as follows. There is likely to be a major reaction for sterling, whichever way the vote goes. A vote for independence will highly likely result in a massive sterling sell-off causing the pound to fall by as much as 10% over the coming weeks and months. A vote for Scotland to remain in the UK is likely to lead to a significant relief rally for the pound and we could see a slight gain from the current trading levels.

One of the main reasons why the pound could decline by so much and for so long should the YES campaign win would be due to the reaction from the Bank of England. Interest rate hikes could be pushed back further from the expected Spring 15 target and another bout of Quantitative easing has been muted to get the markets moving should the unlikely happen. This could be disastrous for those looking at buying EUR, AUD, NZD & USD.

For those looking at selling the pound the risk to gain ratio is not worth taking the gamble on what may occur. With the polls so close at the moment the risks of losing thousands of the currency you need to buy by waiting until after the vote could be extremely costly and we have seen many clients capitalise on the current rates due to the uncertainty. Although we believe the NO vote to independence will happen it is not inconceivable that the polls and bookies are incorrect and we could be in for one of the largest historical shocks of our time.

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then speak with myself Ben Amrany and I will explain the options available to you and how best to minimise any risks you have on the currency.  You can email me at bma@currencies.co.uk 

In other news the Minutes from the Bank of England’s last interest rate decision showed no change in the voting with a split of 7-2 not voting for a rate hike. Unemployment also dipped slightly which assisted the pounds gains so now eyes will be firmly on retail figures tomorrow and that key vote.

Thank you for reading.

Ben Amrany

bma@currencies.co.uk 

 

 

 

 

 

The Scottish Referendum, Inflation, Jobs, Bank of England, AND US Federal Reserve All Impacting On GBP Exchange Rates (Colm Gilhooly)

Where to start today?  The Scottish Referendum, EU inflation, UK jobs, Bank of England Minutes, US inflation, and the Federal Reserve rate announcements all fighting for headline space so let’s be quick.

No change from the Bank of England as expected, but UK unemployment rates have fallen again which is good news for the UK economy.  EU inflation was either on or slightly above forecast depending on which measure you look at, although it still won’t be significant enough for the ECB to be able to say their recent measures are working quite yet.  Later today we have US inflation, with the Fed Reserve decision due at 7.00 this evening UK time- US data of late has been getting better and there is a chance the Fed may signal they are getting closer to an interest rate rise.  If this is the case it could be a shot in the arm for the Dollar, although a more dovish stance could see the Dollar give up some of its gains.

All of this is being dwarfed by the Scottish Referendum- recent polls put the No Campaign ahead at 52% and sterling rallied over the last 24 hours.  However the margin for error is still too great for markets to have any certainty.  The general guide seems to be that a No vote on Thursday will see sterling experience a relief rally and gain some ground.  A Yes vote however could see a sharp drop in sterling’s value as markets and bookmakers are still pricing in a No vote at present.
To this end, and with so much at stake, why not get in touch and see what rates and contract options we can offer?  You can even fix your exchange rate for a date in the future if you are worried about the upcoming volatility.  Simply email Colm at cmg@currencies.co.uk and I would be happy to help.

Have you prepared for the Yes vote? Crazier things have happened….

The pound looks likely to continue to rise as the outcome of the referendum is priced in more heavily to be a No vote. Investors are betting that it will indeed be a No vote and this should cause GBP strength. I personally feel a Yes vote is being discounted far too easily…

I think we are looking at greater chance of a Yes vote for the following reasons

- Demographics of the people being polled. I think naturally the more affluent Scots will be the ones most likely to respond to the polls. The Yes voters are less likely to care about the economic arguments and favour the Yes vote for Nationalistic and emotive reasons. I

-  The ‘Braveheart’ factor. Once put in the booth and owing to the way the question is framed will many a Scot feel inclined to support their Scottish heritage or the less understood British roots?

Some reports have factored the losses for sterling at 10% if it is a Yes vote. I personally would expect around 5% losses if we see the Yes vote but with a further decline longer term once the vote has been digested. Sterling is favoured because they expect the UK to raise rates next year, losing Scotland may lead to more QE and we could be at 1.15 on GBPEUR by Christmas, 1.50 on GBPUSD.

I think the Yes vote is being too heavily discounted and suggest anyone considering making a currency exchange in the coming weeks and months utilise a Stop / Loss and Limit order. Simply put this guarantees you wont lose more than you need and if it spikes higher you get the better rates.

To discuss strategies to maximise your exchange rate please contact me Jonathan on jmw@currencies.co.uk. I work as a specialist foreign exchange broker in the UK assisting clients all over the world manage their FX strategy.

A Volatile Week for the Pound (Matthew Vassallo)

It’s been a volatile week for GBP, with uncertainty surrounding the Scottish referendum having a negative impact on the Pound. We started the week with news of a poll that had the vote at 51% in favour of Scottish independence and this sent the markets into panic mode, with GBP/EUR rates dropping by over a cent. Since then we have heard mixed opinions from various figureheads but it does seem as if the initial poll was distorted and in fact the No vote was still the preference of the majority.

GBP/EUR rates are now reflecting this opinion, with a move back towards 1.26 during yesterday’s trading. We’ve also heard from Bank of England (BoE) governor Mark carney this week, who indicated we may see an interest rate hike in the UK by Spring 2015. This is the first time he has given a specific timeframe and this news also helped to support Sterling recovery, from the early week losses against both the EUR & USD.

GBP/USD rates have also seen a number of spikes this week with the USD still holding firm in the low 1.60’s, as it continues to realign itself against GBP after a rocky few months. It now seems inevitable that we will see GBP/USD head back below 1,60 on the exchange and I wouldn’t be surprised to see this before the end of the year.

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 mtv@currencies.co.uk

Market volatility set to continue in the run up to the Scottish Independence vote on the 18th (Mike Vaughan)

Sterling exchange rates have found some support today as the latest poll for the Scottish independence vote suggested the vote for no was creeping ahead of the yes camp. This volatility is set to continue in the run up to the vote on the 18th.

With so much focus on this vote it is easy to forget the important data releases that are still scheduled. Tomorrow’s data is focused mainly on the Euro Zone and US with employment figures and industrial production data released by Eurostat at 10:00 tomorrow morning, followed by the important US retail sales data state side at 13:30.

Retails sales data is expected to show a good improvement and should in theory lend support to the greenback. It is important to keep an eye on all data sets as it is very easy to simply focus on one area. Of course the Scottish referendum vote is the main driver for sterling currently but should you like an overview of other important releases and the potential impact they might have on your currency transfer then please email Mike at mgv@currencies.co.uk

AUD

Following the pounds losses earlier this week (due to Sundays poll suggesting the ‘yes’ vote was taking the lead in the Scottish referendum) the pound has rebounded five cents or nearly 3% since Monday. The move came about as the latest opinion poll puts the ‘no’ vote at 53%  - for me the vote is likely to be a no and it is this that I believe will lend more support to sterling and push levels back though the 1.80 level. For this reasons should you be selling AUD then current rates should still look like an opportunity.

Overnight the Australian unemployment data fell to 6.1% from 6.4% but did little to affect the AUD exchange rate suggesting the current market is dominated by the movement of sterling. This volatility is set to continue for the next week until the vote passes on the 18th.

To get more information on the currency service we provide please contact the office on 01494 787478. To help you make the most of your currency it is important you get as much information as possible. Our market knowledge is available for any client and we are happy to assist with any bank to bank money exchange not matter how big or small. For more information please email Mike mgv@currencies.co.uk

 

The pound surges in late trading but further losses are expected in the days to come. (Ben Amrany)

Sterling has today had an extremely volatile day’s trading all mainly due to the uncertainty of the Scottish referendum. It is currently playing havoc with the pound and today we have seen a high to low spread against the Euro from 1.2397 to 1.2543 and over a cent high to low against the USD.

The last poll showed there was a 50/50 split but we are expecting an update tomorrow and any signs that the YES vote is ahead once again expect to see further sterling losses. The Swings in the market is going to show how nervous the UK markets are about Scotland voting in favour of independenceand several news reports have highlighted how damning it will be for the UK economy.

Here we have seen a massive increase in the volume of clients buying and selling the pound as the uncertainty is very concerning. With reports that a YES vote could cause the pound to fall by as much as 10% if you are buying or selling sterling you have to ask yourself how much risk to gain ratio you want to take on your exchange because even if a NO vote (which we do expect) happens the pound may only climb by 1-2%. If you take into account what the losses could be it is just not worth the gamble in not exchanging your funds now. This time next month we could be as high as 1.27 or as low as 1.17. This is a real likely spread depending on the outcome and you may be wise just to know how far your funds are going while the rates are still favourable.

So if you are looking at buying or selling a specific currency you may be wise to speak with myself Ben Amrany and I can explain all the options available to you to help you minimise your losses while helping you achieve a much better rate than what the high street banks will offer. You can email me with your contact details and requirement at bma@currencies.co.uk and I will contact you to explain the current market place and  how best to minimise those losses.

Thank you for reading

Ben Amrany

bma@currencies.co.uk

 

 

 

Scottish referendum still holding Sterling back – Pound exchange rates remain volatile ahead of key vote (Daniel Wright)

The Pound has had a shaky few weeks against most major currencies mainly due down to the current saga surrounding the Scottish referendum and what we may see following it.

We currently have a huge amount of uncertainty both surrounding the U.K economy and indeed politically as long as we are still unsure about which way this decision will swing. Personally I still feel we will see a no vote and this may well bring certainty back to the market along with strength back to the Pound.

For those people looking to sell foreign currency to buy Sterling this does really bring a huge temptation to take advantage of current levels and to look at securing a level fairly soon, of course there is the option of taking the gamble and seeing if either the result is Yes for Scotland which may bring further Sterling weakness or indeed if the no vote does weaken away the Pound further.

The problem with a situation like this is that it is not very easy to predict at all therefore you just don’t know exactly what may happen, the reason a yes vote could seriously knock Sterling is because it will throw up all sorts of complications with fiscal policies, we won’t even know if Scotland will take the Pound or be allowed to and political uncertainty will be rife.

This morning the Pound has taken another bashing as it is emerging that the Yes vote may have taken a further lead therefore Sterling has dropped a little further.

If you are concerned about what the next week or so may bring and you wish to maximise your rate of exchange then it is key that you have an experienced currency broker on your side. I can assist clients with requirements ranging from £1000 to multi-million pound transactions and always welcome new enquiries. The company I work for has also won numerous awards for both our rate of exchange and customer service. All you need to do is email me (Daniel Wright) directly on  djw@currencies.co.uk with a description of what you are looking to do and a contact number and I will be more than happy to get in touch personally.

 

GBP Rises as the ECB Cut Interest Rates (Matthew Vassallo)

It’s been a busy day on the currency markets following the European Central Banks (ECB) decision to cut their base interest rate this afternoon. This news has caused the EUR to drop significantly and yesterday’s losses for the Pound now seem like a distant memory. GBP had struggled to impose itself on both he EUR & the USD earlier this week, with the single currency gaining over a cent during yesterday’s trading. This move came about following the release of a poll which indicated that support for Scottish independence was growing, news that immediately caused uncertainty in the markets due to the likely negative effect this would have on the UK economy.

However, following today’s decision by the ECB to cut their base interest rate to 0.05%, a likely reaction to last week’s poor inflation data, the EUR dropped significantly against the Pound, with GBP/EUR rates moving back through 1.26 on the exchange at today’s high. This move came despite the Bank of England (BoE) keeping our base rate on hold and it proves how fragile the Eurozone economy remains and how far their recovery process has to go.

GBP/USD rates also dipped further today, with rates dropping below 1.64. This move is a continuation of the recent USD strength, with rates moving almost 10 cents away from the recent lows. A word caution however, as this is not the first time the USD has threatened to realign itself and with UK data continuing to improve I anticipate the pound to find resistance around the current levels.

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

Pound at lowest level against the US dollar in six months (Mike Vaughan)

Sterling has had a poor day against most majors but notably reaching its lowest level against the greenback since March and bringing the dollars gains against the pound to nearly 4% since July. The movements today appear to have come about following  after a poll by YouGov indicated rising support for the pro-Scottish independence “Yes” campaign.

The poll indicated the lead held by the “No” campaign to reject independence had narrowed to six points from 22 points since the beginning of August. As my colleague Colm mentioned below, the uncertainty this has created for investors has caused the sell off for the pound creating a 1 cent loss against the Euro and US dollar, this may well be a short term reaction, and for me has created some good sell prices for the Euro.

The rest of the week remains busy with the focus tomorrow on Euro Zone retail sales at 10:00 (expected to show a sharp decline), the Bank of Canada interest rate decision and accompanying statement at 15:00 followed by the US FED beige book at 19:00

Looking at Thursday and this is set to be the busiest day of the week with the Bank of England and European Central Bank releasing their interest rate decisions at 12:00 and 12:45 respectively. For me both central banks will keep the base rate on hold but the key area to focus on will be Mario Draghi’s press conference at 13:30. With inflation figures having fallen to their lowest in five years, this is putting more pressure on the Euro Zone to act against deflationary pressures and it is this pressure that could result in the Euro weakening tomorrow afternoon.

Should you have a foreign exchange transaction to arrange and you would like more information on the currency service we provide then please email Mike at mgv@currencies.co.uk

 

 

 

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