Will There be more Bad News from China? How will it Affect your Transfer? (Daniel Johnson)

Key week for GBPUSD exchanges: Will GBPUSD get back over 1.30?

China News

Last week saw the Chinese stock market fall by more than 7% on several occasions. There is a circuit breaker in place which halts trading if there is such  a considerable drop. The second time a drop of this size occurred last week it only took 25 minutes for the circuit breaker to cut in.

The trend was surely set to continue for the rest of the week with only a small window of opportunity for investors to sell their stocks. Thankfully common sense came into play and sanctions were placed on investors on how much they could sell and the circuit breaker was removed, restoring some stability into the market place.

Moving forward however I feel the situation is worrying, there is an enormous problem with shadow banking (unaccounted for debts) which the true extent of which is yet to emerge and growth has slowed for 10 months consecutively. Inflation figures were released on Saturday and also came in below par  and I feel things could well get worse.

GBP/EUR

The Euro has strengthened significantly over the Euro of late, dropping by nearly 10 cents since the beginning of December. The Chinese situation does not bode well for Sterling. There is also the small matter of a Brexit to deal with which is sure to cause further Sterling weakness further down the road. UK inflation is also sitting very low at 0.1%, we are some way from the 2% target so don’t expect a rate hike for some time, at least 12 months.

The only respite for Sterling could be Mario Draghi the Head of the European Central Bank (ECB) increasing the the amount of funds he will pump into the Eurozone through the Quantitative Easing Program (QE). Late in 2015 he stood firm and although he elongated the time frame on QE there was no increase the amount of funds pumped in per month. He may well lose credibility were he to change his stance so quickly.

It may be wise to keep an eye on Thursday’s 12.30pm ECB Monetary Policy Meeting Accounts, this could give an indication as to monetary policy going forward.

GBP/USD

Interest Rates rose Stateside on 16th December and Jant Yellen has indicated there will be further rate hikes in 2016. It is the currently the surest bet on the Currency Market that the Pound will weaken further against the Dollar. There may be some respite as we move toward the Presidential Election in November, political instabilty usually causes the currency in question to weaken. the problem is the damage may already have been done if a rate hike has taken place.

If I was a USD buyer I would be biting the bullet, we already are sitting at some of the lowest levels since 2010.

GBP/AUD

Australia is heavily reliant on raw material exports to China and with China’s growth dwindling I expect AUD to lose further ground against Sterling. The Reserve Bank of Australia has indicated there will no interest drop until after February, so do not expect significant Pound strength until after this point. I do however think that 2.10 could be broken in the coming weeks.

If you are an AUD seller, I would move quickly I think although you may have missed out on 2.03-2.05 of late, this could be a small window of opportunity before things get worse.

If you have a Currency requirement I would be happy to assist, I will not only keep you up to dated with market movement to help you maximise your trade but I can also guarantee to beat any competitors rate of exchange. If you have a currency requirement I would strongly recommend getting in touch by calling 01494 787 478 or e-mail me directly at dcj@currencies.co.uk . I will be happy to reply personally. Thank you for reading my blog it is greatly appreciated.

 

 

 

Could the Pound make gains against the Euro next month? (Tom Holian)

The Pound has once again remained in a tight range during today’s trading session but as suggested in one my previous articles over the weekend I think we could see the Pound make some gains vs the Euro during the course of next month.

Prime Minister Theresa May is due to take centre stage later this week to deliver her speech later on this week. The PM will hold a cabinet meeting on Thursday ahead of her speech on Friday in which she will outline her Brexit negotiations strategy. This will include what the ‘future economic partnership with the European Union should look like.’

We have seen a number of false dawns for Sterling exchange rates during the last few months so a rousing and positive tone on Friday could see the Pound ending the week on a high vs the Euro.

In the next week the Italian election will take place and any signs that a coalition government will need to be created could cause some weakness for the Euro vs the Pound. At the moment it is not clear who will receive the most votes and with some anti-EU parties gaining a proportion of the vote recently I think this could cause a problem for the Euro as we head into next month.

Tomorrow morning we begin with the latest Industrial and Consumer Confidence data as well as German inflation in the afternoon. Both could cause a lot of movement for GBPEUR exchange rates so make sure you keep a close eye out for both of the releases during tomorrow’s trading session.

Wednesday could be the most volatile day of the week with the release of Eurozone inflation data as whatever happens will influence the European Central Bank’s policy when it comes to looking at monetary policy in the future.

If you would like to free quote when buying or selling Euros and would like to save money on exchange rates compared to using your own bank then contact me directly. Having worked in the foreign exchange industry for one of the UK’s leading currency brokers since 2003 I am confident of being able to save you money and help you with the timing of your transfer.

Feel free to email me directly with a brief description of your requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

Will tomorrow bring further strength for the Pound, and which factors could effect GBP exchange rates?

Will Sterling drop below 1.10 against the Euro? What may happen in early January?

The sell-off in the Pounds value that begun last week appears to have stabalised at least for now, as GBP exchange rates with one or two exceptions appear to be back on the charge.

Sterling has gained in value against every major currency pair today with the exception of the US Dollar, which is one of the strongest currencies around at the moment due to the high yield offered on USD deposits now that the Fed Reserve Bank in the US has begun hiking interest rates.

Sticking to the subject of yields, many economists are predicting that the Pound is set to climb against other currencies such as the Euro this year, as the Bank of England is predicted to raise interest rates next month and then there’s a chance there could be another hike later in the year.

With the European Central Bank not predicted to amend interest rates until next year the Pound could offer a much higher return than the Euro, making it a more attractive currency to hold and therefore we could see the Pound gain in value throughout the year.

Tomorrow could be a busy day for GBP exchange rates, especially against the Euro as the European Central Bank President, Mario Draghi will be speaking around lunchtime. Inflation levels within the Eurozone are low, and I think that if this subject is focused on we could see the Euro weaken and therefore see the Pound to Euro rate gain further value.

If you would like to be updated in the event of a spike for the Pound against another major currency pair, do feel free to get in touch with me to register your interest.

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.

 

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

Live updates: Will Parliament vote to press on with a no deal Brexit?

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.

The Pound fails to hold on to its recent gains, will the sell-off continue due to Inflation fears? (Joseph Wright)

The rate of Inflation in the UK (the Consumer Prices Index) rose to 2.7% in April, an increase from the figure of 2.3% in March. This is the fastest increase since September 2013 which just shows how quickly the rate is increasing.

This Inflation update comes after it was announced last week that wage growth in the UK isn’t increasing at the rate of Inflation and this has spooked the markets, resulting in a sell-off of the Pound.

Under usual circumstances the financial markets would expect the Bank of England to raise interest rates to try and counter the steep rise, but due to the fact there’s a general election next month in the UK this has been generally ruled out and the Pound is paying the price.

The Pound to Euro exchange rate prior to these updates was trading comfortably towards the top of its current trading range just below the 1.20 mark, whereas this morning the sell-off has continued pushing the GBP/EUR rate as low as 1.1603 at one stage.

The Pound has been dipping against all major currency pairs over the past few days with this morning being the first time the Pound has got some rest-bite as it’s trading more or less flat across the board at the time of writing.

Economic data releases are playing an important role in the Pound’s price movements at the moment so do feel free to get in touch if you wish to be kept updated.

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.

UK Manufacturing figures and the NIESR GDP estimate could set the tone for the pound for the rest of the week (Mike Vaughan)

Prior to last Thursday’s slight correction the general movements for the pound over the last month have been very positive. We have hit a near 2 ½ year high against the greenback having shifted 3.3% since mid-November. A similar trend has been seen against a number of currencies, most notably just shy of 7% against the AUD (a near four year high), 8% against the ZAR (five year high) and in excess of 4% against the CAD (four year high) all since the start of November. This has created some unexpected opportunities and shows how important keeping in touch with your account manager can be.

GBP/EUR

Sterling had rallied up past 1.21 mid last week but following the ECB interest rate decision to keep rates on hold and the subsequent post decision press conference, the Euro rallied back towards 1.19 – showing how quickly levels can move. For me I believe this trend could be a real opportunity for Euro sellers as I personally believe longer term with the positive sentiment coming from the UK that we are likely to see a sustained period of GBP/EUR sitting above 1.20.

Looking at data this week today’s UK industrial production and manufacturing figures at 09:30 on along with NIESR UK GDP estimates at 15:00 will be a key area to focus on should you have an interest in the pound. Heading towards the latter stages of the week and we have the ECB monthly report at 09:00 Thursday and to finish off the week employment data from the euro zone on Friday.

Strong rates on cable

As mentioned the pound is currently sitting just shy of a 2 ½ year high against the greenback. Following Fridays non-farm payroll figures (slightly better than forecast) the pound has remained range bound between 1.63-1.64 – some attractive buy levels in my view.

This week again UK industrial and manufacturing and GDP data today will be key for anyone looking at cable, something which could push levels back towards the 1.64 mark. Other important data will include the US budget statement at 19:00, with Thursday looking the busiest day for the dollar with initial jobless claims and monthly retail sales figures due for release at 13:30

A good time to buy AUD and CAD?

Sterling’s recent run against the AUD and CAD has been considerable. Since August the pound has rallied over 10% against the Canadian dollar, a huge shift considering that GBP/CAD rates are usually relatively stable. In fact during a three year period (Aug 2010 to Aug 2103) the high low range was only 6% and with levels at a four year high, for me it is a very good time to buy CAD.

Looking at the AUD, rates have dramatically improved since the lows of 1.445 in April pushing through 1.81 last week. This is over a 20% increase and a near four year high, again an opportunity for AUD buyers. This week is a relatively quiet week with the major data set in Australia being unemployment figures on Thursday – expected to increase from 5.7% to 5.8% and could lead to further losses for the dollar.

To dicsuss my market views and to get a full overview of the currency service we provide then please contact the office on 01494 787478 or email me with your query and currency requirement and I will happily run through the various contract types available. Email Mike at mgv@currencies.co.uk

GBPUSD surges above 1.46 and GBP/EUR heads for 1.30 as Brexit risk falls ( Daniel Wright)

If you wanted proof that the EU referendum was creating a volatile market look no further than the current GBPUSD rates. Cable exchange rates have moved almost 3 ½ cents up in the last 24 hours owing thanks to the pollsters boosting the remain probability.

The latest poll indicated a 3-point lead for the Remain camp which has cushioned Sterling ahead of Friday’s results. Despite confidence in a remain vote it is worth noting that the last few polls have all put Leave in the lead, therefore I would still exercise caution in the event you have an outstanding currency exchange requirement.

I am still of the opinion that the Remain camp will pull through. In this event I would predict GBPUSD exchange rates to push through the 1.50’s, levels not seen since Janet Yellen announced her 4 rate hikes back in December of 2015. With a remain vote I expect GBPUSD rates to continue to follow a positive trend until the FED fulfill their promise.

The next question is when will the FED hike rates? As we know the potential for a Brexit turned Yellen away from a hike in June although US economic releases have been mixed and inflation still sits well below the 2% target. Pound to US Dollar exchange rates could remain attractive until a hike decision in September possibly later due to the US election.

In the event the UK withdraw from the EU I envisage this to be negative for many economies due in most part to the uncertainty and impact it may have on commodity prices. If investment moves away from the UK to safe-haven currencies such as the US Dollar, we could see unwarranted strength for the Dollar which would impact commodity economies. This in turn could also impact the odds of a FED hike this year. Another factor to consider is the impact it may have on the Eurozone, the UK leaving the EU is likely to negatively impact the Euro, if the UK withdraw from the EU, further budget would be required from the remaining EU nations to fill the financial hole the UK has left behind.

We wait with anticipation for the results on Friday but hope that a Remain unfolds, those looking to purchase currency with Sterling may be in for a treat.

We here at Pound Sterling Forecast all work for one of the largest currency brokerages in the U.K with access to exceedingly competitive and rarely beaten rates of exchange, along with awards for our customer service.

If you feel that we may be beneficial to you then feel free to get in touch with me (Daniel Wright) the creator of this site many years ago and I will be more than happy to help you personally. We deal with bank to bank transfers ranging from £1000 to multi-million pound exchanges and will be able to explain all of the options to you in clear and easy to understand terms. Email me today on djw@currencies.co.uk with a description of what you need to do and a contact number and I will contact you at the earliest opportunity. You can also call our trading floor hotline during trading hours on 01494 787 478.

The impact of an interest rate hike on buying Euros with Pounds (Tom Holian)

We are now just one day away from the Bank of England’s latest interest rate decision with the expectation that we’ll see the first UK interest rate hike since 2007.

The Pound has seen some very positive gains vs the Euro hitting the highest level since June which is excellent news for anyone looking to buy Euros with Pounds.

The primary aim of the Bank of England is to control inflation but with the figures rising to as high as 3% recently this has put pressure on the central bank to consider raising interest rates at tomorrow’s meeting.

The most recent poll has the chances of 84% of a rate hike and this is why we’ve seen such positive gains for the Pound vs the single currency.

Whether we’ll see further gains when/if the Bank of England raise rates tomorrow is debatable but I think as this will be the first rate hike in a decade this is arguably such a momentous event that I think we could see further gains vs the Euro and all major currencies during tomorrow afternoon.

Therefore, if you’re in the position of needing to buy a foreign currency with Sterling it will be worth keeping a close eye out on what happens tomorrow. For a free quote call me directly on 01494787478 and ask for Tom Holian when calling.

If you have a 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 (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as I can.

Pound to Euro rate hits 6-month high as Brexit text is agreed

Pound to Euro rate hits 6-month high as Brexit text is agreed, what could happen next to GBP/EUR

Yesterday the Pound to Euro exchange rate climbed to its best levels in 6 months. This level was within half a cent from the best Pound to Euro rate in 15 months, making it a good time for Sterling sellers when recent trade levels are considered.

Brexit news positive for Pound to Euro exchange rate

The reason for the spike in Sterling’s value is due to the announcement that a Brexit text has been agreed upon by Prime Minister Theresa May and her EU counterparts. The upside movement so far has been limited as the arrangements need to be agreed upon by May’s Cabinet before being passed through Parliament. This morning there is a lot of talk about whether there will be any further resignations by Cabinet members that are unhappy with the proposed deal. I think that if any members do step down the gains for Sterling over the past 24 hours would most likely be wiped out.

There is also a chance that the Cabinet will reject the proposed Brexit deal and this could be another reason for a drop in the Pound to Euro exchange rate.

Cabinet meeting set for 2pm today

At 14.00 GMT today the UK Cabinet is expected to meet to discuss the future relationship between the UK and EU along with the draft withdrawal agreement. If talks go well and progress is made there is talk of the previously cancelled November EU Summit being re-instated around the 25th of this month. This could be another potential market mover as it would signal positive strides being made by May in her quest to appease everyone in what seems like an impossible task at the moment.

Positive economic data for the UK

The Pound may have also been helped by the strong wage growth data released yesterday, which showed a further rise in regular pay growth to a decade high of 3.2%. Economic data is playing second fiddle to Brexit updates at the moment but it’s worth knowing that there is October’s inflation data being released later today which could impact the Pound to Euro rate depending on the release.

Another key topic at the moment that could impact the Pound to Euro exchange rate is the Italian Budget. The Italian coalition Government is in disagreement with the EU regarding its budget allowance, and the pair appear to be at loggerheads as this issue has been rumbling on for a while now.

If you wish to be updated in the event of a major Pound to Euro movement, do feel free to send me a message. You can send me a message directly using the form below, to ask me any questions you may have about the Pound to Euro rate. I will respond to you personally.


Pound to Euro Rates Hover below 1.14 Despite UK Government Defeat

Brexit votes in House of Commons; the impact on the pound against the euro

Pound to Euro rates have climbed today despite taking a significant drop yesterday ahead of the Parliamentary vote in the House of Commons which took place late yesterday.

UK Prime Minister Theresa May suffered another defeat in the House of Commons which was lost by 303 votes to 258. Brexit remains the major driver for Pound to Euro rates and these coming weeks ahead of March 29th are likely to create major volatility for the pair. Although the Government lost the vote last night, Downing Street has stated that the defeat would not change the negotiating approach to talks with the EU.

Pound to Euro rates: Big decisions ahead for Brexit talks

With time running out as the deadline draws closer there will need to be some big decisions made at this final juncture. Whatever decisions are made and the outcome of the Brexit negotiations will likely create a major reaction as one path will ultimately need to be decided upon. Put simply a deal agreed should see the pound make some healthy gains and a no deal outcome will likely see the pound drop sharply. In the meantime the markets are trying to second guess the outcome which is seeing the pound trading on a lower footing against the Euro.

If a deal is reached then there are likely to be material gains for Pound to Euro rates. Investment in my view would flood back into the UK and with economic worries in France, Spain, Italy and Germany the Euro is likely to come under renewed pressure.

The outlook for the Euro

Germany may find itself in a technical recession like Italy has already done. This would raise concerns over future growth in the EU bloc. There are a number of political issues at present, not just the unrest in France with Gilets Jaunes demonstrations, but also in Italy and Spain all of which point to an uncertain outlook for the economic health of the EU.

UK Retail Sales data expected today

UK retail sales numbers for January are released this morning and may provide some support for the pound on a bigger number. Early indications suggest that sales were healthy although much of this is due to strong discounting which was seen in January so next month’s data may provide a more realistic snapshot of the health of the high street.

Please do feel free to use the form below if you’d like to ask me a question or discuss Pound to Euro rates. I’ll be happy to contact you personally.


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