Category Archives: USD

What else is driving sterling exchange rates apart from Brexit?

Sterling Exchange rates have been range bound as investors try to gauge the impact of the Brexit and balance their holdings of the pound. Whilst much of the movement on sterling is explained by Brexit there are other factors globally and as a result of the Brexit vote to consider. In this post I will try to identify some of the non-Brexit key issues I am discussing with my clients to help them make an informed choice about what is the best decision with their currency. With no key news due on the Brexit until perhaps early next year or in a years time when Article 50 is invoked it is these other factors which will become more important. Keen observers will notice I have already used the ‘B’ word 6 times in just this intro 7 if you count the title so forgive me if I struggle to avoid mentioning it!

GBPEUR rates weakened this week with news of Deutsche Bank, Germany’s biggest lender on the ropes with a plummeting share price. With Germany having set a precedent by actively bailing out Greek, Cypriot or Italian banks news that Deutsche Bank will be looked after could upset things. There is still speculation the ECB (European Central Bank) might consider a fresh QE (Quantitative Easing) program extending the current operation that ends in March 2017. QE generally weakens the currency concerned and if the program is revised will halt the single currency’s advance on sterling.

There are also concerns over how the UK vote will impact the ‘union’ element of the EU. With far right (and left) anti immigration parties gaining support across the regions there are growing fears over just where such feelings are headed which could ultimately lead to Euro weakness. One of the major fears is longer term other countries vote to leave which would of course weigh on the Euro if this is looking likely!

One of the major banks has predictions of GBPEUR at 1.20 by year end. If you are selling Euros and waiting for better rates than the 5 year highs on offer at present these events could easily undermine your position. We offer a bespoke service to keep our clients up to date with the latest news and events on the market to try and help you proactively manage your exposure to the currency market. Of course this list is not exhaustive, more information can be obtained by emailing me directly jmw@currencies.co.uk

On the US Dollar the rates are largely being driven by the prospect of the US Federal Reserve raising interest rates. Even before the UK vote GBPUSD rates were down at multi year lows because the Federal Reserve were mooting raising interest rates further. With speculation rife of a hike before Christmas the USD remains strong. However we also have the US Election to contend with which may easily weaken the USD if Trump looks likely to win or even wins. As the UK’s vote shows nothing should be taken for granted.

Of course sterling willl continue to react to the news regarding Brexit and we cannot get off that subject for too long. Comments by leaders in the UK and abroad will drive the rate in a similar fashion to before the vote. We will have periods where everything will be doom and gloom (GBP negative), we will have periods where things don’t seem so bad (GBP positive). Financial Markets are not rigid beasts which react 100% to the facts available. They respond to sentiment and impression as to what might or might not occur in the future.

I have only covered the US Dollar and Euro but of course there are lots of other interesting events happening on other currencies. The pound is at multi year lows against the Australian Dollar, Canadian Dollar, South African Rand and almost an all-time low against the Kiwi. These currencies have many factors driving their strength and weakness so if you wish to learn more and look at some plans to maximise your rate please contact me or fill in the forms. Any other currency inquiries are welcome too!

Understanding the market and all of your options is a vital component of securing the best possible exchange rate. This blog is designed to offer an outline of the practical assistance we offer. However more information on the various options and a more detailed forecast can be made available to you by filling in the forms or emailing the author direct.

The author Jonathan Watson works as Chief Analyst and Associate Director for one of the UK’s largest independent currency brokerages. He can be reached 01494 787 478 or by emailing jmw@currencies.co.uk

Where Next for GBP Exchange Rates – Can Sterling’s Run Continue?

The Pound has found life tough going for some time now and my opinion has been the same since the UK’s Brexit decision, and that is Sterling will struggle to make a sustained impact against the major currencies whilst so much uncertainty surrounds the UK economy. That doesn’t mean that we will see Sterling move in a straight line, or that the current trend will last forever but it is clear that the current market sentiment around the UK economy and ultimately the Pound, remains cautious at best.

The UK economy is fragile and as such any negative data or comments by key figureheads is causing the Pounds value to drop. We currently find ourselves in a unique position and therefore investors are having to factor in multiple different outcomes and scenarios, which include a possible recession in the UK and another interest rate cut by the Bank of England (BoE) to name but two.

In the short-term Sterling has gained value against its EUR counterpart following rumours yesterday that one of Germany’s biggest institutions, Deutsche Bank is on the rocks. Its share prices have hit an all-time low and this has sent shock waves through the market. German Chancellor Angela Merkel has already stated that the bank will not be bailed out and this has added to the drop in the EUR value. It is also a stark reminder that it is not just the UK economy, which remains fragile in investors’ minds.

The Eurozone is likely to come under further pressure over the coming months, with key elections in France and Germany in 2017 likely to cause further uncertainty in the market. With far right parties across Europe gaining more support than ever we could see an extremely unstable few months, with the EUR likely to suffer as a result.

Whilst Sterling is unlikely to be driven forward by an overriding feeling of positivity, we could well see its value driven up inadvertently by the potential problems facing the EUR. Those clients holding the single currency may be wise to protect their positon ahead of what could be a rocky road ahead, as the current near 4 year highs could soon be a thing of the past.

If you are keen to discuss the current market trends ahead of an upcoming transfer, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 487 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Sterling Exchange Rates Find Support after Recent Slide (James Lovick)

The pound has finally found some support against most of the major currencies after a slide lower over these last couple of weeks. Overall Brexit concerns are still keeping the pressure on the pound and these are not going to clear up any time soon. Positive developments like this for sterling exchange rates are welcome all things considered.

GBP EUR is rising for the second day running although this is not so much of a sterling story but rather as a result of some negative news coming out of the Eurozone. European Central Bank President Mario Draghi is speaking later today and he may give some clues as to future monetary policy which may impact on the Euro.

The pressures are very much mounting on European politics at the moment and going forward the Euro is in my view likely to come under renewed strain. The Italian referendum on constitutional change as well as the French and German elections next year will almost certainly become a major driving force for the Euro in the coming months and could create a huge run of problems.

Whilst Britain must handle Brexit so too must the Europeans contend with it and the Euro could suffer as a result when everything is considered. It is interesting to see Presidential hopeful Nicolas Sarkozy has offered to give Britain better terms to the last deal that David Cameron negotiated if he was voted in as French president. The political battle in France is already well underway.

GBP USD is also trying to move higher from the near 31 year lows the pair is currently sitting at. There are a number of speeches from Federal Reserve members later today in the US including Fed chair Janet Yellen which could give some new direction for the dollar.

Friday sees UK GDP numbers released which could create some sizeable market movement for the pound. Any change in these numbers could see the pound react very quickly as this is hard economic data and what the markets are most interested in.

Clients who are holding sterling and looking to buy any other currency are feeling the pinch at the moment and the outlook is not set to get better in the short term. Until Article 50 is invoked the pound is likely to remain in a period of limbo although there will inevitably be some positive spikes in the coming weeks and months. If you have an upcoming currency requirement either buying or selling 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 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

Buying Euro and Dollar rates boosted from Presidential debate (Joshua Privett)

Anyone with a Euro and Dollar buying requirement are now entering a phase where a new ongoing narrative will be continuing to influence the currency markets, the US election cycle.

Anyone with a GBP/EUR requirement may question why their situation would be affected by the US election? Simply put it heavily influences global attitude to risk. With the current climate in the leave-vote atmosphere, risk is everything.

The Pound’s value has been hit repeatedly in recent months precisely because of its instability and the risk involved in holding Sterling whilst the UK’s economic future has come into question.

We are now entering the heavy campaign season in the US. The election is only a month away, and Trump is closing on Clinton. She can no longer be comfortably deemed the front-runner, and therefore we may be seeing the surprise result in the US election as we had in the EU Referendum. We have little understanding about what Trump’s cryptic plan is for the social and economic fabric for the world’s largest economy, and with the expected Republican majority in their Congress, he could have largely free reign. As such the same anticipation is becoming heavily visible in the market place as it was in the lead up to the June vote.

Heightened global risk means that the Pound no-longer appears as the black sheep among its global currency counterparts who are enjoying greater stability.

In reality the UK’s recent ability to weather the storm of the Brexit vote is being viewed with a more positive tone from investors. With China leaking noises of further crisis and the US economy entering a heavily uncertain period (which was so strong they decided not to raise interest rates there this month despite their recent economic performance suggesting the economy could handle the move), the Pound should enjoy having some pressure relieved with the spotlight being pointed elsewhere.

So those with a buying Euro and Dollar requirement have breathed a sigh of relief with GBP/EUR and GBP/USD both recording marginal gains to begin the day.

Further revelations on business confidence in the US will come with an assessment of attitude in the financial services sector of the US economy at 4pm today, which could see this rally for the Pound continue.

In this current hypersensitive market a premium is put on being in a position to move quickly should any tempting opportunities emerge in the time period you have to complete your transfer.

With so much of the current market governed by politics (US Election, Brexit) rather than economics, the landscape can also change much more quickly. I offer a very proactive service to keep my customers informed of any potential changes in the currency landscape to assist you in planning for an upcoming transfer in the short or medium turn.

I recommend that if you have a Euro or Dollar buying requirement in particular to contact me today on jjp@currencies.co.uk to discuss the options open to you to make sure any attractive levels that you are aiming for are seized immediately should they become available, and that you are not ‘last to the party’. There is also the potential to safeguard your transfer from any adverse movements.

As a point of note I have never had an issue beating the rates of exchange offered elsewhere to my current customers, and if you are not a regular reader, you should also be aware that current buying levels available can be fixed in place for a future transfer – essentially allowing you to ‘pre-book’ your currency and avoid the risk entirely from the current market. Given this I can confidently say that a brief conversation could save you thousands on a prospective transfer.

Euro and Dollar sellers can also get in contact for an immediate quote now that we have touch back to these fresh lows on GBP/EUR and GBP/USD only a few days ago.

Please feel free to fill out the form below and I will be in contact as soon as I am able.

 

What will happen to Sterling exchange rates this week? The Great British Brokerage – Don’t settle for second best….(Daniel Wright)

The Pound has yet again had a torrid start to the week and appears to be finding that it has very few supporters out there at present.

Sterling exchange rates have dropped off against every major currency and with very little economic data out this week until Friday it is hard to see where the catalyst for the fight back will come from.

The markets are kicking the Pound whilst it is down and you can see why… if you were a big investor due to put money into a business, would you proceed with that investment not knowing what the actual plans for the business were over the next few years? More than likely not unless you have a high appetite for risk.

With this in mind big investors and speculators  are at present leaving the U.K and indeed the Pound alone, settling for safer options. In the world of supply and demand, the demand for Sterling has dropped off and so therefore the value of the Pound has followed suit.

There are plenty of reasons why other currencies may start to weaken off but none seem to be impacting matters as much as the referendum has hit the Pound. You have lots of problems politically and with the European economy, the U.S election is about to get into full swing and both Australia and New Zealand are suffering a little due to their currency being too strong.

As we move into October anyone looking to buy foreign currency with the Pound will need to hope for economic data to continue to be solid post referendum and this will give the Pound a chance of coming back a little, although I hate to write negative posts about Sterling performance unless this data is good then the Pound may suffer as we approach the Christmas period.

If you have a large currency exchange to carry out involving buying or selling the Pound then you need not worry as I can help you every step of the way. The brokerage I work for is one of the longest standing and one of the few privately owned currency brokerages left in the U.K.

We can cater for clients all over the world and have access to the very top rates of exchange due to our large buying power and we also try to ensure that we keep clients fully up to date with market movements, along with explaining to them in simple terms the various options that they have in front of them.

If you feel that I (Daniel Wright) may be of use to you then you are more than welcome to contact me personally. You can email me on djw@currencies.co.uk and I will be more than happy to get in touch as soon as I can.

What really lies ahead for sterling exchange rates?

The rollercoaster ride of 2016 on sterling exchange rates is far from over! There are still numerous events up ahead to trigger large unexpected swings that will impact the value of your currency purchase, have you made any plans for this? Understanding how markets react, all of your options and having a helpful hand to guide you through will offer a real advantage to securing the best rate of exchange.

Economic data in the UK is not the main driver for the pound, the big factor is political concerns relating to the Brexit plus attitutudes to the UK viewed from a global perspective. Take the USD this week, we saw a big devaluing in the value of sterling for no real reason other than the fact the USD was appreciating in value in the face of a possible US Interest rate rise. Sterling was sold off as traders backed the buck – more on this later. Numerous data sets showing a relatively healthy UK economy should be taken with a pinch of salt until we get the firm economic data for the the quarter since the Referendum next month.

Sterling exchange rates will remain volatile and lacking direction until we get clear direction from the UK Government as to when Article 50 will be triggered. For now clients buying and selling the pound will have to contend with the mixed messages emanating from politicians. Theresa May has said she is in no rush to trigger Article 50, Boris Johnson indicated this week it might be early 2017 – and was soon lambasted for saying this.

Looking at some of the big banks predictions on sterling rates offers little help. Lloyds are predicting 1.20 by the year end whilst Dankse Bank are showing 1.08! All in all if you are looking to buy the pound there are likely to be further improvements between now and the New Year. Much will of course depend on which currency you are holding on what happens. If you are selling US Dollars will a Trump Presidency send the USD into freefall? Or will the steady hand of Clinton see the US raise interest rates at Christmas? If you are selling Euros will a decline in Eurozone economic activity trigger a further round of Quantitative Easing by the ECB? Or will renewed confidence in the region stem from uncertainty elsewhere?

It is currently the best time to buy the pound with US Dollars in 30 years and the best in 3 years with Euros. This isn’t great news if you are holding pounds looking to US Dollars, Euros or any other currency but as you can see things could get easily get worse for sterling.

In such an uncertain market with no clear direction a careful examination of all of your options including the Stop Loss and Limit order is crucial. A Stop Loss limits any losses if rates fall, a Limit order guarantees a price if rates rise. A forward contract allows you to lock in today’s rate for settlement up to 18 months in the future. me

It is almost six months ago today I was asked to speak on the BBC regarding the Brexit. At the time I suggested that on a Leave vote the UK economy would not just wither away. I pointed to the hundreds of thousands of businesses and consumers doing trade across border and highlighted how even on a Leave vote those links would remain. I discussed with the interviewer how nothing would change quickly and markets would have time to digest any news following an initial shock. All of this has so far proved true and it is with confidence I predict that the coming months will not see any fundamental changes in the situation, I believe that will all be reserved for 2017. However there will be lots of movement on the pound as the markets react to all manner of speculation and rumour just like it has since and leading up to the vote.

If you wish to discuss all of your options, the market and what to look out for on the rates please speak to me Jonathan by emailing jmw@currencies.co.uk. I am Chief Analyst and Associate Director of the UK’s largest privately owned foreign exchange PLC brokerage and have been working for our company for 7 years of the 17 it has been in business. If you have a transaction to make I will discuss with you all of the options available and everything happening in the market to help you maximise your exchange rate. Even if you believe you have everything covered it might be useful for another pair of eyes to have a look to provide some useful information.

 

Sterling Weakness Despite Stronger Manufacturing Data (James Lovick)

The UK received another boost yesterday after manufacturing data from the Confederation of Business industry (CBI) showed British manufacturing grew strongly in September. UK car manufacturing reached the highest level in August for 14 years and highlighted an increase of 10.2% in vehicle exports. Despite the strong numbers the pound was largely unaffected with little market movement as the concerns over Brexit still remain which is keeping the downward pressure on sterling exchange rates.

UK GDP numbers released next week and could create some major volatility for the pound. The markets are largely concerned with how well the British economy is performing post Brexit and the GDP numbers are the proof. Any sign of weakening that can be attributed to Brexit is likely to have a negative impact on the pound. My understanding is that GDP should hold relatively steady and if this is the case then we could see another rally for sterling exchange rates.

GBP EUR has now dropped 5 cents in the last 2 weeks and it looks like there will be further to fall for this pair. Longer term and my view is that the pound should strengthen but not until Article 50 has been invoked and trade negotiations are well underway between Britain and the EU. For the moment the pound is in a weaker position with the Brexit jitters still on investors’ minds. GBP USD should see a rally in the coming week as we approach the US presidential election and high volatility is to be expected.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me James Lovick directly on jll@currencies.co.uk  and I will be more than happy to contact you personally to discuss the various options we have available to you.

Buying Euro and Dollar rates see some support today after a nervous week (Joshua Privett)

Today has been the first day since last Friday where the net result for the day is actually in the green for anyone considering buying Euros, US Dollars or Australian Dollars. Whilst the gains are not enough to send anyone jumping around the room, it is a signal to markets that the narrative surrounding the Pound has changed.

Part of this is that there has been some positive news today from the UK itself, with confirmation that car manufacturing numbers have reached a record high post-Brexit producing a diamond from what has been a rough week for Sterling across the board.

So the cheap Pound is boosting exports, but this is struggling to challenge the dominant narrative surrounding the Pound which has been interest rates. But again, we are seeing some respite in this area for Euro and Dollar buyers.

The reason for the slide on the Pound which this website has extensively covered was due to the heavy hints last Thursday that there may be a further interest rate cut in the UK before the turn of the year. Coupled with the profit taking activities by speculators on Friday afternoons, the effect this had on the Pound was severe with 2 cent losses on GBP/EUR, GBP/USD and GBP/AUD last Friday.

The pressure was also piled on Sterling as the USA were on the verge of actually raising rates yesterday evening, yet shied away at the last moment. Indirectly, this would have made the Pound seem like a less attractive commodity by comparison if the Dollar had raised interest rates. The avoidance of this means the Pound won’t be losing value in this area due to decreased demand.

Tomorrow the main attraction for currency markets will be business confidence figures in the Eurozone for their service and manufacturing sectors, which are set to slow a slight decrease from previous months due to some of the recent slowdowns recorded in Eurozone’s powerhouse economy – Germany. This should creating tempting opportunities on GBP/EUR to compliment the 0.7 cent rise seen today.

However, Friday profit taking should come around the corner once more for anyone with an upcoming currency requirement, whether buying Euros or Dollars.

As the above paragraph alluded to, on Fridays high street traders who have been speculating heavily on the currency markets all week must allocate their profits in a stable currency whilst they are away from their desks. This protects their gains whilst markets are still operating from 6-11pm on Friday and 2-6am on Monday before they return. The Pound has been anything but stable in recent weeks, so we are seeing demand for it plummet during this period, and therefore its value by association.

So based on the current expectations Euro buyers in particular could see some improved opportunities during the first part of tomorrow, yet Euro and Dollar buyers alike will likely suffer.

If you have a GBP/EUR, GBP/USD, or GBP/AUD requirement in the short to medium term I strongly recommend contacting me this evening or tomorrow morning on jjp@currencies.co.uk whilst markets are quieter to discuss the options open to you to ensure any tempting peaks which emerge tomorrow are reached, and that your currency purchase is safeguarded from any particularly adverse movements.

With the expected volatility tomorrow a well timed transfer could save you thousands on an upcoming purchase, and I will highlight that I have never had an issue beating the rates of exchange offered elsewhere in the past.

Euro or Dollar buyers can also fix the rate of exchange ahead of an upcoming transfer, essentially pre-booking your currency, to avoid seeing the budget of any future purchase being eaten into.

Euro and Dollar sellers alike can also get in contact to discuss the potential to secure any highs reached to buy the Pounds during the final hours of the week, as you can secure a desired level should it become available even for a few moments outside of UK trading hours. You can fill out the form below and I respond as soon as I am able to.

 

When will we see Sterling bounce back? (Daniel Johnson)

Pound Forecast

The media have been very negative following the electorate’s decision to leave the EU. At some points the fear mongering has been overbearing. However the damage has now been done and now it is time to keep calm and carry on. Although poor UK data is filtering through, I think Sterling is chronically undervalued at present and although there may be further falls the pound short term, I think the Pound will gain strength against all major currencies medium to long term. A pound rally will not be quick, trade negotiations will be long and arduous. It is estimated over two thousand skilled negotiators will be needed to get all the deals sewn up. Australia is one of the most forthcoming countries with regards to getting trade deals in place and it is estimated that will take two-and-a-half years.  So although I think the pound will recover, but do not expect 1.30 anytime soon on GBP/EUR.

The US rate decision was a non-event as predicted , despite the FED meant to be acting as a separate entity to the government I can’t help but think the election influenced the decision on  a rate hike. If Trump gets in expect USD to lose value due to his radical ideas regarding trade deals and immigration.

If  you have a currency requirement it is crucial to be in touch with an experienced broker. The timing of your trade is vital during such volatile  times, If you have an experienced broker on board he/she can keep you up to date with what is happening in the market to help you make an informed decision. Should you find our information useful and you would like me to assist with your trade I will be happy to help you personally. If you inform me of the the currency pair you are trading, volume and time scale and I will provide a free trading strategy to suit your needs. I work for one of the top brokerages in the country and as such I am in a position to better virtually every competitors rate of exchange. You would also be looking at saving anything up to 4% in comparison to high street banks. Please do get in touch by contacting me at dcj@currencies.co.uk. Thank you for reading my blog.

 

How could tonights US interest rate decision impact GBPUSD and GBPEUR exchange rates? (Dayle Littlejohn)

This evening Chairlady Janet Yellen from the Federal Reserve will address the public in regards to the interest rate for the next 30 days in the states. The general consensus on the market is that there is a 15% chance of a hike. Its key to note the most traded currency pair throughout the globe is EURUSD therefore when one of the currencies strengthens at times the other will weaken. The reason for this is that speculators transfer between the two currencies for profit taking.

If the predictions are correct and the US decide to hold off I wouldn’t be surprised to see GBPUSD rise and GBPEUR fall. Therefore if you are purchasing euros this week I would look to trade some point today. Where as for US dollars buyers I would take the gamble and hold off until later in the week.

** IF YOU ARE ALREADY USING A BROKERAGE TO BUY YOUR CURRENCY IT WILL TAKE TWO MINUTES TO EMAIL FOR A COMPARISON AND I AM CONFIDENT I WILL BEAT ANY PRICE YOU ARE CURRENTLY RECEIVING drl@currencies.co.uk **

As there are limited data releases for the UK this week, its important to keep up to date with regular Brexit news and look ahead to next week. Mortgage approval data is set to be released 8.30 Thursday morning and is a good indicator to how the housing market is performing. Furthermore Friday morning the UK release their latest GDP numbers. I still believe it’s only time until we see a contraction in the UK economy, therefore I expect these data releases to come out worse than expected.

For further information on a specific currency pair feel free to email me the currency pair you are trading (GBPUSD, GBPAUD, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast and the process of using our company drl@currencies.co.uk.