Sterling climbs as Bank of England may hike interest rates in August

The Bank of England chose to keep interest rates on hold yesterday as expected, although the voting patterns of the BoE voting members resulted in a boost to the Pound’s value.

The markets are now expecting to see a rate hike in August, as now there are 3-voting members of the BoE that wish to see a rate hike. The Pound to Euro rate is still trading over the 1.14 mark after hitting 1.1460 yesterday, and this morning the Pound is managing to hold onto much of its gains from yesterday.

Should there be a rate hike in August, I would expect to see the Pound climb further as this isn’t the first time that we’ve expected to see thehike from the BoE. The Pound was trading a lot higher earlier in the year when their were hopes of a hike and this time the markets may be weary of buying into the Pound, in case the BoE decides against making the change which is perhaps why GBP exchange rates haven’t hit the highs of earlier this year.

There are no economic updates from the UK today, but if you’re planning on making a transfer involving the Pound and would like to updated should there be movement, do feel free to register your interest with me.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Is there justification for a Sterling rally?

Is there any reason for optimism regarding the Pound?

The Pound remains fragile. Lack of clarity on Brexit and poor economic data is keeping the pound anchored to current buoyancy levels. We have recently had a fall in manufacturing data which proved to be the biggest drop since October 2012. GDP came in below expectations at 0.2% and average earnings has fallen to 2.5%.

Some economists are still optimistic and are predicting a rate hike from the Bank of England (BOE) in the coming months. I think there is little justification for one this year.

The point of contention in Brexit talks at present is the Irish border deal, unfortunately Theresa May and David Davis are currently having trouble even agreeing a back up plan. They do hope to have something in place before the EU summit on 28th June.

This does not bode well for the Pound. In order to see the Pound make any significant gains we will need real progress in talks, which at the moment doesn’t seem likely to happen anytime soon.

GBP/EUR – The ECB meeting is tomorrow and if there is a cut to the QE program we could see significant Euro strength, although I am not convinced this will occur, it will probably happen later in the year.

If you are buying Euros short term move at around 1.1430, anything higher I feel too optimistic short term. Euro Sellers you are in an incredible spot. Pre Brexit rates were 1.42. 1.13 is a very attractive rate to trade at. There is room for further gains, but evaluate whether it is worth the risk before taking the gamble. The QE situation does have the potential to cause Euro strength.

GBP/AUD – I would be surprised to see a rate hike from the RBA this year and the current trade war between China and US has the potential to cause some Sterling gains, but I doubt anything substantial.

Aussie buyers aim for 1.77 short term. Aussie sellers I would take advantage of rates as they sit, The popularity of the USD is hitting the Aussie and there is the 90% chance of a rate hike form the Fed this evening.

GBP/USD –  The Dollar is moving from strength to strength. The returns on treasury bonds is now at some of the best levels in years and investors are taking advantage of the situation. There is a Fed rate hike predicted this evening, but I am of the opinion this is factored into current levels. If the Fed speech after indicates further hikes however this could cause further US Dollar strength.

If you are a US Dollar buyer say your prayers if you are moving short term aim for 1.34. USD sellers move if it drops below 1.31. I think 1.30 could be a point of resistance.

If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavor to produce a free trading strategy. During a period of such uncertainty it is important to be in touch with an experienced broker if you wish to maximise your return. We have tools at our disposal to make sure you do not miss out if there is a spike in your favour.

If you already have a currency provider in place. Drop me an email with what you are being offered and  I am very confident I will be able to demonstrate a significant saving. It will only take you two minutes and I am  sure it will be worth your while. You can trade in safety knowing you are with a Foreign Currency Direct PLC, a firm trading for over 16yrs and FCA registered.

If you would like my help feel free to email me at dcj@currencies.co.uk.

Thank you for reading

Minimal data out today for the U.K – European growth and U.S employment figures the large releases of the day – Political issues in the U.K also key this week

We have minimal economic data out for the U.K today, the Pound has remained fairly flat in early morning trading.

As the day progresses we do have other economic data releases from around the world that may impact the Pound against the Dollar, Euro and Canadian Dollar along with other major currencies.

At 10:00am today we have the release of European growth figures, expectations are for the quarter on quarter figures for the first quarter of 2018 to remain at 0.4% with year on year growth unchanged at 2.5% as well. Any change to these expectations may lead to a volatile morning for the Euro, is has been mentioned in recent times that growth around the Eurozone has slowed a little so should this be shown in the figures today the Euro may weaken.

Later in the day we have jobless claims figures out from the States which of course will be important for both the Dollar and all major currencies as it will impact global attitude to risk. Non-farm payroll data, which is the number of people in non-agricultural employment came out better than expected last week so we may see further positive news for the Dollar should these figures follow suit which may push GBP/USD rates back down again in trading today.

On top of all of this we still have a huge amount of problems hanging over the head of the Government, mostly regarding Brexit and their plans going forward regarding this. There are reports that David Davis,  Secretary of state for exiting the European Union is not happy with the current plans set out by Prime Minister Theresa May and may even stand down from his position, should this happen then I would expect that uncertainty for the U.K would increase and the Pound could easily lose value fairly rapidly.

If you have a currency exchange to carry out involving either buying or selling the Pound and you would like my assistance with it then you are more than welcome to contact me personally. I would be highly confident that not only would I get you a better rate than your current provider but also a first class level of customer service too. Feel free to email me (Daniel Wright) directly on djw@currencies.co.uk with a description of your needs and I will be happy to contact you personally for a free no obligation discussion about them.

Pound makes gains against the Euro and the US Dollar but how long will this last?

Pound gains against Euro and Dollar

The Pound made some gains yesterday after much better than expected UK Services Sector data which showed a rise to 54 compared to the previous month which was 52.8.

This has given rise to a hint that interest rate rises may be discussed again but until we have a flurry of good economic data I do not foresee a rate hike coming in the near future for the UK.

The Pound is now trading above 1.14 against the Euro and also 1.34 against the US Dollar following on from the news.

Meanwhile if we look at the political landscape over the next few days the EU Withdrawal Bill will be discussed next week on June 12th. The House of Lords had made a number of amendments last month so next week’s meeting could cause a lot of movement for Sterling exchange rates this time next week.

Over in Europe things appear to have settled down slightly in Italy with New Italian Prime Minister Giuseppe Conte announcing new plans for moving the country forward including cutting tax and curbing immigration.

One real sticking point however for Italy is that they currently have a debt of 130% of GDP which is clearly a big concern and way above that expected by the European Union.

The Italian debt problem could cause a big problem in the future but at the moment things do not appear to be reflected in the value of the Euro which highlights to me the problems faced by Sterling caused by the ongoing Brexit uncertainty.

My personal opinion is that we’ll see Sterling remain in a fairly tight range as we have seen over the last few months but with a number of economic data releases over the next few days including Eurozone GDP data due out tomorrow and the latest NIESR UK GDP estimate for the last three months published on Friday we could see a volatile end to the week for the Pound.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank then contact me directky for a free quote and I look forward to hearing from you.

I work for one of the UK’s leading currency brokers and I’m confident with my 15 years experience that I can be of assistance to you.

Tom Holian teh@currencies.co.uk

Italian political issues appear to be the main driver for currencies so far this week

The week so far has seen quite a lot of volatility for Sterling exchange rates, however the reasons for the Pound moving against most major currencies are not down to political or economic data from the U.K but actually mainly driven by Italian politics, Donald Trump and North Korea.

Italian politics has been one of the main focuses for the week for investors and speculators, as news broke earlier in the week that the two big winners from the election – Five Star and The League had failed to form a Government, this instantly led to a drop in the value of the Euro and also for all of the perceived ‘riskier’ currencies, for example the Australian Dollar and the New Zealand Dollar.

As the week has progressed it does appear that the heightened uncertainty has lifted and only just this afternoon the two groups had agreed to give the matter more time and that they would once again continue talks and try to come to a positive conclusion so that they can move forward together.

Due to this we saw GBP/EUR exchange rates drop back  down into the 1.13s and the Pound also lost ground against the riskier currencies once again too.

The main key piece of data left for the U.K this week is manufacturing data due out on Friday morning at 09:30am, we do however have European unemployment and inflation figures out tomorrow morning, and also Non-Farm payroll data from the U.S on Friday lunchtime at 13:30pm.

Non-farm payroll data can impact all major currencies as it has an effect on global attitude to risk, so be sure to keep a keen eye on the market on Friday afternoon to see what impact this has had.

If you do not have time to watch the markets closely and the broker or bank you currently use does not do this for you then it may be time to change. If you would like my assistance with your exchange, both in terms of getting the best exchange rate and also helping you take advantage of the timing of the transfer when spikes occur then feel free to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk and I will be more than happy to contact you personally for a no obligation discussion about your whole situation.

 

GBP Forecast – Sterling Finds Some Support as Italian Political Crisis Deepens (Matthew Vasssallo)

Sterling has found some welcomed support against the EUR over recent days, as concerns over the Italian political crisis intensified over the weekend.

GBP/EUR rates hit a high of 1.1467 this morning following a complete breakdown in negotiations over the weekend, between the anti-establishment Five Star Movement and the far-right League. The two leading parties have failed to form a working government, with the on-going political turbulence weighing heavily on investors, who have since shied away from the single currency.

This in turn has inadvertently boosted Sterling’s value, somewhat artificially some may say, despite the current issues facing the UK economy and the current malaise in Brexit negotiations.

UK Prime Minister Theresa May is struggling to pull her Conservative party in the same direction, with key members of her backroom team, openly questioning her Brexit strategy.

Investors’ long-term confidence in the UK economy and ultimately the Pound is being tested and as a result the Pound is struggling to gain any sustainable value. This is due for the most part, to the on-going uncertainty around Brexit, which continues to cast a dark shadow over the UK economy.

In my opinion until negotiations have been resolved, one way or another, it is unlikely that investor confidence will grow significantly, which is likely to handicap the Pound over the coming months.

Looking at the current data and Friday’s Gross Domestic Product figures confirmed that the UK economy had grown at its slowest pace in the past five years. This follows a run of inconsistent data, with inflation falling again this month, another indication that we are unlikely to see the Bank of England (BoE) raise interest rates anytime soon.

Due to this on-going uncertainty, I would be very tempted to protect any Sterling currency positions from further losses and remove any market risk where possible.

If you have an upcoming Sterling currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

GBP Forecast – Market Confidence in the UK Economy Remains Minimal (Matthew Vassallo)

Those clients with a Sterling currency exchange to execute, should be keeping a close eye on this morning’s Unemployment data and Average Earning’s figure.

The UK’s official Unemployment rate fell last month, coming out below the markets expected figure at 4.2%.

This along with Average Earning’s increasing, was one of the last positive data releases for the UK economy and those clients holding GBP will be hoping for a similar improvement this month.

The Pound has struggled of late, with market confidence evaporating in the UK economy, as soon as it became clear that the Bank of England (BoE) would not be raising interest rates at their policy meeting last week.

BoE governor Mark Carney’s tried to remain upbeat about the UK economy and the potential for future rate hikes but the markets seem unconvinced. Sterling has failed to make an sustained impact against any of the major currencies over recent days and with Brexit now back in focus, this trend may be continued over the coming days.

GBP/EUR rates remain marooned just above 1.1, whist Cable rates continue to find resistance under 1.36.

Overall there can be no argument that Sterling is in the midst of a torrid run and it may be prudent to protect any sterling currency positions from further losses.

If you have an upcoming Sterling currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

 

Difficult period ahead for the Pound after Bank of England keep interest rates on hold

The Pound has had a difficult end to the week following the announcement by the Bank of England to keep interest rates on hold at just 0.5%. The split was the same as before with MPC members Ian McCafferty and Michael Saunders both voting for an interest rate hike.

This did not come as too much of a surprise after the very low GDP figures a fortnight ago but what caused the Pound to really drop was that the UK’s growth forecast was downgraded from 1.8% to 1.4% for 2018 which had previously been predicted in February.

This downgrading is a real concern as we are still in the midst of trying to work our way though the Brexit discussions so things at least for the time being look rather uncertain for the Pound against a number of different currencies.

Indeed, when looking at the rate to buy Dollars it has has improved by as much as 5% in the last month or the difference of £4,200 on a transfer of USD $100,000.

As we go into next week we could see a lot of movement for Sterling on Tuesday as there are a number of key important data releases ahead for the UK.

We begin with UK unemployment data as well as average earnings and both have been improving in recent times. Indeed, as average earnings outpaced inflation at last month’s reading this was one of the justifications of a potential rate hike so if we see another improvement could this help the Pound fight back against the US Dollar?

Having worked in the foreign exchange markets since 2003 for one of the UK’s leading currency brokers I am able to offer you bank beating exchange rates as well as helping you with the timing of your transfer.

For a free quote then contact me directly by calling 01494787478 and asking for Tom Holian when calling or email me directly with a brief description of your currency requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Sterling drops substantially after BoE decides not to hike interest rates, where to next for the Pound?

Although financial markets weren’t expecting a rate hike today, now that its been confirmed we’ve seen a big sell-off in the Pound’s value. Moreover, the prediction for UK economic growth throughout 2018 has also been lowered which has applied even more pressure on the Pounds value.

Of the 9 voting members of the Bank of England, there were only two that voted in favour of raising interest rates. It’s worth noting that just a month ago markets were heavily expecting to see the rate hike and the Pound to US Dollar rate was trading at a post-Brexit vote high.

The positive sentiment has since waned after the UK economy has shown signs of a slowdown. UK GDP has hit the lowest level in 5 years and in the UK’s manufacturing sector, factory orders have hit a 17-month low. Data such as this has put the brakes on the tightening of monetary policy in the UK which is why we’ve seen the Pound come under pressure recently.

UK inflation has also dropped off slightly, which makes the need for a rate hike less important. I think this is another reason for the Pound losing value.

There is still a rate hike later on in the year expected, although if the economy continues to drag I think further falls would be likely for the Pound as the rate hike wouldn’t happen.

If you would like to be updated in the event of a spike in the Pound’s value against another major currency pair, please feel free to make me aware and I’ll be happy to notify you.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

What may the Bank of England interest rate decision lead to for Sterling exchange rates?

Following a reasonably quiet start to the week for U.K economic data anyone with a requirement to exchange Sterling into another currency or to exchange another currency back into Sterling may wish to keep a keen eye on exchange rates over the course of the trading day tomorrow.

At midday we have the release of the Bank of England interest rate decision and this will be key for the performance of the pound for the rest of the week.

The Pound had initially hit the highest levels this year only a few weeks back when investors and speculators had priced in a high chance of an interest rate hike. In the past few weeks the likelihood of a hike has significantly dropped due to lower than expected inflation and poor growth figures.

It is fairly unlikely that we will see a change in interest rates tomorrow (although you couldn’t 100% rule it out), but what will be key will be how the monetary policy committee voted and any comments that hint to a future move from bank of England Governor Mark Carney in his speech later in the afternoon.

Should Carney suggest that they believe that it was a blip and poor weather that led to the data dropping off and change of heart this time around, and that there is a high chance of a rate hike still happening in the coming months then the Pound may rise, on the flip side should they suggest that we now may not see a change in rates this year then Sterling could be in for a really bad day at the office.

If you have an exchange to carry out in the near future and you would like us to make you aware of a spike in your favour, or an adverse market movement against you then feel free to contact the trading floor today on 01494 787478 and ask for Daniel Wright, or you can email me directly on djw@currencies.co.uk and I will be happy to explain the various tools we have that can help you maximise your rate of exchange.

 

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