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Will The Pound Keep Rising This Week?

By
Daniel Wright
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The Pound has had a fairly good week or two against most major currencies, so I thought I would look at the probability that Sterling exchange rates would continue to gain ground against them over the course of this week.

Now that the Autumn statement has passed without any huge drama, unlike Kwasi Kwarteng’s attempt, there is a feeling that there is a little more confidence in the U.K and investors are starting to head back into UK stocks and shares, thus heightening demand for the Pound and increasing its value.

The week ahead is a really tricky one to work out, this is mainly due to the fact we have a short week in the U.S, with Thanksgiving over in the States on Thursday and very limited economic data across the globe for most of the trading week.

The key focus this week for the U.K and ultimately the Pound will be Wednesday, to be honest most of the main data for the week around the globe comes out on Wednesday and you may also see a little volatility on the Wednesday afternoon session as the U.S markets close off positions before they hit their Thanksgiving break.

Overnight on Tuesday we have the RBNZ interest rate decision over in New Zealand, for those looking to buy or sell New Zealand Dollars any change to the expectation of a 75 basis point hike could lead to sharp overnight movements for the NZD, or equally any surprising comments regarding future economic policy in the press conference thereafter.

Wednesday morning sees the PMI (Purchasing Managers Index) for the U.K for both services and manufacturing, so there will be a focus on this data to see how each areas has performed, expectation is for the pace of contraction to have quickened, we have similar data for the Eurozone and US with slightly better expectations but anything that differes from expectations or surprises the market could cause movements for GBP, EUR and USD over the course of Wednesday.

Wednesday afternoon brings a host of other data for the U.S ahead of thanksgiving, with durable goods, jobless claims and the FOMC meeting minutes all due out over the course of the afternoon.

I still feel that despite the pending recession and the gloomy outlook for the U.K that there is a little confidence returning due to the plans set out by the PM and Chancellor, and the fact that Sterling exchange rates are still reasonably low so the Pound can be acquired fairly cheap at present.

It would not surprise me to see the Pound continue to hold or even increase value this week, however any regular reader of this blog will be well aware that anything can happen and even a comment from a Bank Of England member or a surprise change in economic data could alter that expectation very quickly.

In such a volatile market it really is key you are watching rates very closely, if you would like assistance in doing so along with getting a comparison on any rate you are being offered to move money internationally then you are always welcome to contact me personally.

We pride ourselves on delivering up to date market information, award winning customer service and extremely competitive exchange rates, so if you feel you may not be getting any of this from your bank or current broker, then feel free to email me (Daniel Wright) on [email protected] and I will be happy to speak to you personally with absolutely no obligation to use us.

Will the Pound rise after the Autumn Statement?

By
Tom Holian
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Autumn Statement and impact on Sterling exchange rates

The eagerly anticipated Autumn Statement was released yesterday which had the effect of calming the currency markets, much to the relief of anyone looking to buy Euros or buy US Dollars at the moment.

The statement included increased tax rates as well as a curb in public spending in an attempt to fill the void in public finances that the UK faces.

A stark warning was also given by the Office for Budget Responsibility as it warned that households could face a drop in disposable incomes by over 7% over the course of the next two years.

Clearly this is a big concern for the UK economy but compared to the disastrous mini-budget which caused a big loss for Sterling exchange rates it could be viewed as a more responsible budget as well as acknowledging a problem.

Therefore, with a more manageable statement it could be argued that this could indeed help support the Pound.

Already this morning the Pound vs the Euro and the Pound vs the US Dollar has started to see a fightback compared to a slight drop in value during yesterday’s trading session.

Chancellor Jeremy Hunt was quoted yesterday as saying ‘none of this is easy, but it’s the right thing to do’.

By the Chancellor announcing the plans as to how to tackle the next few years whilst in government we could see some further support for the Pound as we end the week.

When we turn the focus to both the continent Europe is having its own struggles with high inflation combined with lower growth.

With so many economies that the European Central Bank has to cope with it is clear that in order for them to raise interest rates as quickly as the UK and US this is much more problematic.

If you have a currency transfer to make and would like a free quote compared to using your bank then contact me directly and I look forward to hearing from you.

Tom Holian [email protected]

Pound Sterling Forecast – Sterling starts the week on the front foot

By
Daniel Wright
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Sterling exchange rates have started the week off fairly positively against most major currencies, most notably continuing the strong finish to last week against the Euro, with GBP/EUR now sat above 1.1650.

The reason this pairing in particular has moved in Sterling’s favour more than others is down to the ECB (European Central Bank) interest rate decision and press conference delivered by Christine Lagarde on Thursday.

The ECB did raise interest rates as expected, however there was a slightly dovish tone around this hike, there were suggestions that further hikes would be more data driven than nailed on, and this has led investors and speculators to perhaps hold off on Euro for the time being whilst they wait and see the tone of both the Federal Reserve and Bank of England, both of whom have interest rate decisions due out this week on Wednesday and Thursday respectively.

Expectations are for both to hike by 75 basis points, but as with the ECB meeting it will be the tone in the subsequent statements that will be of most interest to investors assuming there are no great surprises in the decisions later this week.

With the mini-budget being scrapped and a full budget being announced for Thursday 17th November it will be hard for the Bank of England to be able to fully lay out fiscal plans moving forwards as they will not know what the Government are set to do.

It does seem that the markets are seeing some stability back for the UK with Rishi Sunak as PM and Jeremy Hunt as Chancellor, so it wouldn’t surprise me to see the pound have a solid week and in fact a better few weeks ahead, it does seem that despite the circus act we have had over the past few months we do now have a safe pair of hands steering the ship and that the cabinet that is in place are giving the markets a little more confidence.

The Federal Reserve meeting is on Wednesday evening for those with an interest in USD, and the BOE meeting is at midday on Thursday, this could send the pound either way against all majors so it most certainly is one to keep an eye on.

Finally, on Friday we have the Non-Farm payroll data out in the US, you may not think this is of great significance, but it can be a big market mover for all major currencies as it measure the number of people in non-agricultural employment in the US and is taken as a barometer as to the health of the US economy. They take non agricultural measures due to the seasonality that brings so to keep the data  as realistic as possible, and straight after the release it can lead to a flood of money into or out of the Dollar, it also impacts investors and speculators risk appetite so keep a keen eye on this market information early on Friday afternoon.

If you have a currency exchange to make and you would like to get a comparative quote or to discuss your options/the markets with a highly experienced broker then feel free to contact me directly. We make sure we acts as the eyes and ears on the market for our clients which can make a huge difference to the cost of a large purchase overseas or the amount you receive when bringing a large sum back.

Feel free to email me directly on [email protected] or click here to make an enquiry directly on the site and we will be happy to get back to you personally.

Pound Sterling rises as Sunak expected to be third Prime Minister in a matter of months

By
Daniel Wright
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GBP AUD Slumps After UK Cabinet Resignations 

The pound has started off the week on the front foot against all major currencies, following another weekend of political twists and turns for the UK.

As we headed towards the end of an eventful week, news broke that ex Prime Minister Boris Johnson was heading back from a Caribbean holiday to have a crack at  regaining his position at number 10, something that seemed a million miles away only a few weeks ago.

As most readers will know, the UK is full of surprises at the moment and this news gave the pound a slight wobble as further uncertainty was cast over where the UK would head next, and with expectations of a completely broken Conservative Government should Boris get back in, the outlook led to investors and speculators shying away from the already damaged pound.

Fast-forward a few days and we have had a lot of further change, Boris has pulled out, Penny Mordaunt is struggling for numbers and there is every chance that by this evening we will have a new Prime Minister – Rishi Sunak.

Currently he is odds of 1-50 with Skybet, so it appears ever likely we will have a winner by the end of the day, and this has actually given the pound a decent boost over the days trading.

Sterling is the best performing major currency of the day at the time of writing, and it appears that Rishi Sunak is deemed as a safer pair of hands, and someone that can start to guide the U.K out of these seeming murky waters.

What this does bring are further unknowns, what will new PM Sunak have planned, how will he approach the cost of  living crisis, will we have another change to taxes? All of the above present an interesting few weeks ahead again for the pound and how it is seen by investors and speculators alike.

What is for sure, is Sunak cannot afford to have a Kwasi Kwarteng moment, which spooked investors and shot the pound down significantly in a short space of time, his plans need to be thought out, well delivered and to be run past the office for budget responsibility before thrown into the spotlight.

Expectations are that the pound could have an interesting week once again this week, depending on how this all plays out, it is clear that investors seem to back Rishi so a strengthening on the pound over the week could continue once there is clarity he has won the contest, but lets be clear he has one hell of a huge job on his hands, and all eyes will be on his every move and hanging off his every word as to what the plans are both now and in the future.

If you want to be kept up to date with the very latest market movements, or should you have a pending currency exchange to make and you want to discuss your options or to get a comparative quote then feel free to email me on [email protected] and I will be happy to have a chat with you personally.

Will the Pound to Euro improve this month?

By
Tom Holian
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Pound Euro rate improves over 2 week period

The Pound Euro rate has now improved after the mini-budget disaster almost two weeks ago caused chaos for Sterling.

The Pound Euro rate was trading above 1.15 for a brief period of time earlier this week before slowing losing some of its recent gains.

The Chancellor said on Monday that he wants to boost growth as well as cutting taxes.

With parliament due to return on 11th October we could see further movements for GBPEUR rates depending on the reaction.

The new fiscal plan is due to be announced on 23rd November. Hopefully, after some review by the Office for Budget Responsibility we could some calming of the markets later next month.

Bank of England and interest rates

The Bank of England had its hand forced by the mini-budget which meant that it had to support pension funds who were at risk following the statement made by the Chancellor.

The Bank of England are expected to keep raising interest rates for the foreseeable future in order to combat inflation which has been hitting close to 10% recently.

The target for inflation is 2% so the typical way of reducing inflation is to raise interest rates.

However, as inflation has been caused by the pandemic as well as the issues in Ukraine it will be difficult to see inflation come down as quickly as the central bank would like.

The mortgage market in the UK also came under a lot of pressure with many mortgages being pulled off the market.

This has caused problems for lots of borrowers at a time when energy prices are also rising.

Tomorrow Bank of England member David Ramsden will be speaking so keep a watch out for his comments.

This may provide further insight as to what is happening with policy and therefore GBPEUR rates.

If you would like a free quote when sending Euros then please contact me directly Tom Holian [email protected]

 

 

Will Sterling continue to recover following last week’s dramatic sell-off?

By
Joe Wright
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Pound to Dollar Rate Drops to One-month Low

Yesterday the Pound begun the week in a strong fashion, following on from its recovery towards the end of last week.

During last week’s trading session the Pound traded within an 8% range against the US Dollar and the trading range for GBP/EUR wasn’t far from this kind of dramatic trading range either. I would say that it was the most volatile week of trading since the Brexit vote took place back in June of 2016.

The Pound begun to fall in value in the fall-out from the Chancellor of the Exchequer, Kwasi Kwarteng’s mini-budget report when he announced that the government planned to scrap the higher tax bracket of 45p for higher earners. Financial markets were concerned with this plan along with a number of other announcements from Kwarteng and the Pound begun to tumble as a result.

The decision to go back on this plan, along with rumoured Bank of England buying up of long term bonds to stabilise the Pound’s value and financial markets has helped the Pound recover after it hit the lowest levels in history against the US Dollar, and the lowest level against the Euro in almost two-years.

Although the Pound has now recovered against the Euro and also recovered some of the losses against the US Dollar, moving forward there remains a number of underlying issues which could put further pressure on the Pound. The Conservative Party are facing a number of challenges as there didn’t appear to be a clear consensus between them regarding the financial announcements at the mini budget. Also, Labour is leading in the polls by a considerable margin so there could be political uncertainty in future which could put pressure on the Pounds value.

When markets are moving this quickly, and political updates are having such an impact on the value of the Pound it can be difficult to know when to make currency conversions and that’s where having a currency specialist on hand to keep you updated can be helpful. We can provide you with market updates and also help set up rate alerts to keep you informed.

For further information please feel free to contact me directly on [email protected]

Pound Sterling Weakness – Why Is The Pound Dropping So Much?

By
Daniel Wright
-

Sterling exchange rates have taken a huge hit over the course of the days trading, as the new chancellor Kwasi Kwateng’s mini-budget appears to have knocked the pound totally out of fashion.

The pound has lost over 350bps against the Dollar sitting in the 1.08 territory, whilst dropping to 1.12 against the Euro and hitting the lowest level against the Swiss Franc since 1974 sitting in the 1.06s.

There is now talk of an intervention and whether HMT will make an attempt late on Sunday night ahead of the Asian markets opening to stabilise the currency, should this not happen or not have the desired effect the Bank of England may need to step in again and look at an emergency interest rate hike less than a week after they raised rates by 50 basis points, which in all honesty wouldn’t look great.

Sterling really is taking some big blows out in the financial markets and it is tough to see how the pound will fight back, the lower Sterling exchange rates go, the more costs will spiral and the bigger the potential problem, so we are stuck in a really tricky situation of late.

I like to monitor the pound against a basket of major currencies and today was the biggest drop I can remember since the referendum, with a loss of over 10% in value against a basket of major currencies.

So where does this leave you if you have a large purchase to make be it personally or for your business overseas? The key in the coming weeks is being agile and ready to act.

We could still see a bounce back should we have an intervention or a rate hike, but you must also exercise caution that if this trend continues and you keep holding on it could be an extremely expensive decision.

If you have foreign currency to exchange back through sale of goods with your business or a personal property sale then you are probably reading this feeling pretty happy as your foreign currency has just become worth a lot more, but do be cautious not to get caught in the vicious circle of waiting and waiting then finding it bounces back and it is too late, this is a common occurrence with people in my experience.

I have been helping people move money around the world for 15 years now, if you would like to discuss the pound’s sudden loss of value or chat about a potential trade you need to carry out then feel free to email me, Daniel Wright on [email protected] and I will be happy to get in touch with you personally.

You can also set rate alerts, follow the markets, request quotes and view graphs/charts here on Pound Sterling Forecast so feel free to take a look around the site and we hope it is helpful.

Bank of England and mini budget – The impact on Sterling exchange rates

By
Daniel Wright
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 GBP EUR Higher After Inflation Hits Another High 

The Bank of England increased interest rates for the 7th time in a row by 0.5% to take the base rate up to 2.25%, which was the biggest single rate hike in years. This caused the Pound to fall briefly against both the Euro and US Dollar as there were some predictions that the Bank of England may have raised rates by as much as 0.75%. As this didn’t happen the Pound plunged almost immediately after the announcement but managed to reverse some of the earlier losses later in the afternoon.

However, as of Friday morning, the Pound has struggled against both the US Dollar and the Euro and we are due to have the announcement from the Chancellor later today which is likely to cause more movements for GBPEUR exchange rates as well as GBPUSD exchange rates.

Currently, the US Dollar is close to its strongest level in history vs the Pound highlighting the real problems that the UK economy is facing whilst in the midst of a cost of living crisis. Indeed the GBPUSD exchange rate is at its lowest level seen since 1985 creating some excellent opportunities for those people looking to exchange US Dollars into Sterling in the short term. I have personally seen a rise in enquiries of clients looking to move money from the US to both the UK and Europe

The mini-budget is due out later with Chancellor Kwasi Kwarteng due to announce online tax cuts as well as dropping the planned rise in corporation tax. The economy and currency markets will be waiting with baited breath to see the impact of the announcement so pay close attention to the statement later on today.

If you have a currency transfer to make and would like a free quote then contact me directly [email protected] I have worked in the industry for 19 years and I’m confident of being able to help you.

GBP/EUR continues to trade at annual low with BoE meeting in focus in week

By
Daniel Wright
-

In the early hours of this morning, the Pound to Euro exchange rate hit a fresh annual low of 1.1385, which is the lowest level the pair has traded at in close to 20 months.

The weak start to this week’s trading follows on from a 1.25% drop last week, after Friday’s sell-off pushed the Pound lower off the back of some concerning economic data for the UK.

UK Retail Sales were expected to have dropped by 0.5% in August, but data released on Friday showed a drop of 1.6% month on month. With the cost-of-living crisis a mainstay in the news a drop-off wasn’t a surprise but it was the size of the drop that shocked the currency markets and pushed the Pound lower across the board of major currency pairs.

The Office for National Statistics confirmed that all retail sectors were affected and economic reports such as Friday’s confirm that the economy is likely to slide into a recession.

There are hopes that the newly appointed Prime Ministers’ announcement of a two-year cap on energy prices will help ease the cost-of-living crisis and boost spending but the announcement came this month so moving forward retail sales figures are likely to be followed closely and could impact the Pound’s value as we saw on Friday.

This week both the FED Reserve in the US and the Bank of England here in the UK are expected to hike interest rates. There could be further market movements for the Pound as there is uncertainty regarding how much the Monetary Policy Committee will decide to hike interest rates by.

At the last meeting, the BoE hiked by 0.5% and although it’s likely that they will do the same again, the voting patterns haven’t been unanimous with some favouring a 25-basis point hike and others 75 basis points so this Thursday’s release is certainly worth looking out for.

Should you need assistance with a large currency conversion for the purchase or sale of a property overseas and you would like to discuss these market movements in more detail, please feel free to email me, Joseph Wright on [email protected], and I will be happy to have a chat with you.

You can also request a quote anytime you wish if you would like to compare to your bank or current broker.

Pound at its lowest against the Euro in 19 months, and 37 years against the US dollar !

By
Daniel Wright
-

The pound is notably weaker today following the release of the latest UK Retail Sales numbers showing a surprise fall of 1.6%, which makes the economic slowdown anticipated, and likely recession ahead seem much worse than thought for Britain.

As I write, GBPEUR levels have dropped to a 19-month low, with the day low at the time of writing 1.1399 on GBPEUR and 1.1350 on GBPUSD. The cable level is a 37-year low, the worst for sterling since 1985 against the US dollar. I am often asked if it is a good time today to buy or sell, today appears to be a very good day to buy the pound if you are selling US dollars or Euros, it can easily be argued.

Any sense of calm and peace we had seen following Liz Truss’ announcement over an energy price freeze recently has ultimately proved short-lived. As a matter of fact, with the weekend approaching and a very busy week next week, we could be in for a turbulent time once again for sterling, particularly with financial markets closed on Monday for Her Majesty’s funeral.

This means there is less time for markets to digest news, and it increases the urgency of decisions, knowing that time is short. Next week is a crucial week with the latest Bank of England and US Federal Reserve Interest Rate decisions, plus Liz Truss’ mini budget that could very easily shape sentiment ahead for the pound.

Going back to today’s data, the British consumer is a major component of economic growth for the UK, so the poor numbers today are quite worrying for the economic outlook ahead. And this information seems highly likely to feed into any narrative by the Bank of England next week.

The Federal Reserve in the US will absolutely be one to watch too, as markets often follow the lead of the Fed, the expectation is for rising inflation stateside to trigger further sharp rises in interest rates, which may only serve to increase volatility as traders and market participants have to react to the ever-changing story on both sides of the pond.

If you are considering any FX payments shortly or longer term involving the pound, EUR, US dollar, or any other currency, now might be a good time to assess your strategy following these latest developments and with so much out there globally to move the FX markets.

For a more detailed discussion of your requirements, please call or email me directly on [email protected] for a one-to-one over what might be best.

You can also set rate alerts, sign up for our daily rates email or request a quote via this site.

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