Since June last year many sterling currency updates online have painted a fairly bleak picture moving forward and many economists believe buying foreign currency sooner rather than later was the way to go as falls were always on the horizon. However after this week, I believe there is a strong argument to suggest the pound has hit rock bottom for the time being.
Sterling rallied against all of the major currencies towards the end of the week and there was no economic data or media stories released which gave reasoning for the improvement. Instead I believe the pound has been oversold over the last 18 months and quite simply currency speculators are now unwinding positions as they believe the bad run for sterling is over.
However this does not mean if you are buying a foreign currency for a property purchase abroad or needing to pay a company invoice, that you should sit back as rates are now going to soar in your favour. I am suggesting the slow gradual fall for sterling, for the time being, is over and you should therefore study the other currency you are purchasing and make an informed decision thereafter.
For example, if I were buying euros within the next 3 months I would purchase sooner rather than later, where as if I were buying US dollars even though rates are sitting at a 12 month high, I would be tempted to hold off for a period. Let me explain why.
Last week President of the European Central Bank Mario Draghi gave his latest press conference after the ECB interest rate decision. The ECB made no changes to their monetary policy, however the President did state that a bulk of the decisions regarding the bond buying program quantitative easing, would be made in October. Furthermore he upgraded growth forecasts to the fastest pace in 10 years and had no worries about the Euro.
For clients that are reading this site for the first time it’s important to understand that the EURUSD currency pair is the most traded currency pair globally and has a major impact on the other currencies. Therefore my theory is that there is a good chance Mr Draghi will taper in October which will mean a sell off of US dollars to buy euros, which in turn means GBPEUR falls and GBPUSD rises.
Couple the above with Donald Trump’s government continuing to devalue the US dollar, the FEDs stance on monetary policy at present and the tensions in North Korea the US dollar looks like it could continue to devalue on it’s own.
Here at poundsterlingforecast it is my job to provide clients regular market information, which will help the client make decisions when purchasing currency. As we have been buying and selling currency for 18 years, we have the ability to undercut high street banks which saves the client money also.
Property purchases and sales are my area of expertise, therefore if you need to purchase a foreign currency or you are about to complete on a sale abroad, today is the day to get in touch to discuss your options and to get an understanding of how we can save you as much money as possible.
As I have mentioned above, it’s crucial when buying or selling the pound to analyse both the currencies you will be trading, as your 2nd currency will also have an impact on your decision.
Feel free to email me the currency pair you are converting (GBPUSD, GBPAUD, GBPCHF, GBPEUR etc) the reason for your conversion (company invoice, buying a property), timescales and I will email you with my forecast for the currency pair and the process of using our company [email protected]. Dayle Littlejohn
** If you are already using a brokerage, especially online platforms, but would like a comparison and my help with timings (this is where you can make further savings), I am more than happy to do this for you. Feel free to email me the currency pair you are trading and the volume and I will respond with the live price **