GBP Forecast – Sterling Under pressure Following Leaked Brexit report (Matthew Vassallo)

Sterling’s recent run seems to have slowed this week, with the Pound struggling to make any further inroads against the EUR and some of the other major currencies.

GBP/EUR rates have fallen away from the 8 month high seen last week, following a leaked Government report, which indicated that the UK will be worse off after Brexit. The report covered all three Brexit scenarios, including a free trade agreement, access to the single market, or the worst case scenario of no deal being reached at all.

The Government were quick to react and said the findings were only a preliminary assessment but the news is hardly likely to inspire confidence amongst investors. As such the Pound quickly fell back below 1.14 against the EUR, although maybe somewhat surprisingly has made further inroads against the USD this morning.

GBP/USD rates moved back above 1.42 after initially falling yesterday. Despite the greenback finding some market support around this level, it seems as through investors have started to pull funds away from the USD, which has struggled to make any significant impact against the Pound since the turn of the year.

Despite this seemingly positive spike, the Pound could come under further pressure over the coming days as Brexit talks starting to dominate the headlines once more.

With phase two talks not under way and trade discussions starting in March, it is a key point in the transition.

The EU have already outlined their position and it did make for positive reading for those driving the UK’s negotiations and with Brexit secretary David Davis already claiming the UK would be opposing many of the suggestions put forward.

The uncertainty of the outcome is likely to put further pressure on the Pound over the coming weeks and beyond and as such, I would be looking to protect any short to medium-term GBP currency positions if feasible.

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 inning 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.

 

Is the brand Britain feel good factor rubbing off on the Pound? Sterling exchange rates on the up (Daniel Wright)

So it appears that the doom and gloom merchants may well have got it slightly wrong regarding how a leave vote would impact the economy… Certainly so far anyway.

The Pound completed a hat trick of solid data this morning when the U.K services sector showed a much stronger than expected figure for July.

All in all, despite the initial drop off and the current uncertainty still holding Sterling back we are seeing the Pound start to gather momentum and investors and speculators are starting to get a little more confidence around it.

We do have a fairly busy week ahead of us for other economies around the globe so maybe it is time for others to take their turn in the headlines and the Pound to start fighting back.

Tonight we have the RBA (Reserve Bank of Australia) interest rate decision and rate statement which may give us a fairly volatile evening for AUD exchange rates. There is no imminent cut expected, but should we see a surprise cut or a nod to a cut in the near future the Pound could push higher against the Australian Dollar.

On Wednesday we have the inflation report hearings from Bank of England Governor Mark Carney, followed by a speech from MPC member Cunliffe so keep a keen eye on the markets mid morning on Wednesday in case any alterations to future predictions are made.

Thursday may well be the most important day of the week, especially for those with a Euro requirement. We have the ECB (European Central Bank) Interest rate decision and press conference and there is a chance we may see further addictions and changes to fiscal policy, this may include adding to QE (Quantitative Easing) which in turn would more than likely weaken the Euro off.

The press conference after it at 13:30pm can throw up quite a lot of volatility too as head of the ECB Mario Draghi answers questions and queries from the press. The rates can move off of his every word so ensure you are ready for action on Thursday should you need to buy or sell Euros. We have known to see swings of over 4 cents during the press conference which is a difference of £6000 on a €200,000 purchase.

If you are looking to buy or sell any major currency and you would like assistance both in terms of getting a top exchange rate along with a supremely smooth and personal service then I can help you. Not only do we write about what is going on in the market but we all work for one of the longest standing and top brokers in the country. We can help people from all over the world and deal with bank to bank exchanges from £2000 upwards with no higher limit.

If you feel that you would appreciate my personal assistance then feel free to email me (Daniel Wright) the creator of this site on djw@currencies.co.uk or fill in the form below and I will get in touch as soon as I can.

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Has the pound bottomed out? I wouldn’t bet on it…

GBPEUR rate remains steady as markets await the Autumn Budget

With the pound finally finding some support after a very challenging couple of weeks a very valid question at present is whether or not the pound has now bottomed out. The first reflections following the flash crash which saw GBPEUR hit 1.09 and GBPUSD 1.18 indicated we would see a move lower to perhaps parity on GBPEUR and 1.10 on GBPUSD. Will this now start to materialise or will the rate gently rise as market spotlights focus elsewhere?

Sterling has dropped almost 20% on its TWI (Trade Weighted Index) since the Referendum vote. Billions of pounds of value of the UK economy has been written down as investors fears over the UK’s future relationship with its biggest trading partner manifest on the currency markets. Yesterday’s news on Unemployment shows the economy is still creating jobs, we finally saw some rises in Inflation too this week. A welcome knock on effect from the weakness of sterling versus the deflationary situation only a few months ago.

With the political developments remaining the big driver on sterling we have to be preparing for further losses for the pound. Whilst the Brexit seems to some of us like it has been going on for ages it has only been 4 months since the vote. When we step back from this situation and perhaps reflect on the vote in further months and years to come we will view now as the very infant stages of what is going to be a very long and drawn out process. In such an environment it is difficult to be overly positive for the pound and whilst we might have some small bounces like we have seen this week to help anyone holding the pound, I would not suggest this will be indicative of a move much higher in the short term. Buying on such spikes is I believe a very worthy strategy to avoid being caught off should we see further big challenges on the markets.

Key information for anyone buying or selling the pound comes this morning with UK Retail Sales and then in the afternoon today we have the latest ECB (European Central Bank meeting) where we may learn of any fresh approach by the Eurozone to manage their economy. Any suggestions on future policy direction may cause volatility on GBPEUR rates as well as GBPUSD since swings on EURUSD impact both of these pairs.

I wouldn’t be betting that the pound has now bottomed out since there are still many huge challenges ahead for the UK both politically and economically. The weak pound itself whilst helping Inflation could become more of a problem as it exacerbates the gap between wage growth and prices. I don’t think anyone voted for Brexit to be poorer and one way or another a chronically low pound does make the UK as a net importer worse off.

Sterling is enjoying some of its best news in October with some big improvements particularly against the Euro and US Dollar but it has improved by a small percentage against the Australian dollar and New Zealand dollar too. If you are making a transfer in the future understanding all of your options and the market in advance can really help you to make informed choices about when and how to make your currency exchange. I cannot tell you exactly what to do or what will happen but with nearly ten years experience helping private and business clients plan and manage their FX exposure in a friendly yet professional manner I am sure I can add value with a better rate and some sound analysis.

For more information please contact me using the form below or email directly using jmw@currencies.co.uk. Ideally please leave a number so we can speak or please call me on 00 44 (0) 1494 787 478.

The author is Chief Analyst and Associate Director of the UK’s largest private currency brokerage with nearly ten years experience helping private clients and business plan and manage their FX exposure.

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1.40 Breached once more! (Joshua Privett)

Today saw incredible gains for Sterling across the board against all major currencies.  Sterling is now back and comfortably inside 1.40 against the Euro, as well as above 1.50 against the USD. The presence of rates like this to purchase, particularly with our election now only a few weeks away is staggering. The uncertainty of such a closely fought election will become telling on rates in the near future. The fact that the SNP is becoming a major player in this, with the Scottish Referendum just a short time ago causing Sterling to crash, is making Sterling weakness during the election more and more certain.

Historically, this is the period when the rates start to tumble slightly. Two weeks or so before citizens head to the polls. Today the rates moved up across the board due to positive minutes from the recent Bank of England meeting.  Their apparent surprise at the sudden representation of poor data in the American economy is why the Pound’s gains against the USD were larger other major currencies.

What some financial forecasters are beginning to ponder however, is that these rises indicate an even larger drop to follow. Frankly, these rates don’t make sense in a logical market. The certainty of no clear front runner, a necessary coalition, and the inability to forecast British financial policy beyond May, makes all this flight into Sterling from other currencies an indication of more unconventional investment policies.

The currency markets are mainly moved by banks, who speculate billions daily on shifts in currency value. Buying at the low and selling at the high to make their profit. Once thing they can do is ‘go short’. This is a term where a currency is borrowed, like Sterling, with the promise that it would have to be repayed back later. However, if Sterling loses value later, then this debt would be very cheap to pay back. The election looming makes this a very safe bet. So when these investors do decide to sell off their Sterling for profit, the snap-back in the markets will likely be extreme to say the least.

As I said these current rates are an incredible opportunity. Personally, if I had a requirement to use Sterling as a purchasing currency for Euros, Dollars, etc, then I would not hesitate a moment longer. Waiting any longer will be a gamble that could only have a small pay off, or a large loss. The rates can be pegged at these historic levels for up to 12 months, call through to the trading floor on 01494 787 478 and ask for Joshua, or email me overnight on jjp@currencies.co.uk to discuss your situation in more detail.

GBP/EUR trickles down after yesterday’s gains (Joshua Privett)

Yesterday saw some favourable movements for buying Euros to offset their recent and sustained losses since the middle of December.

The gains between Monday and Tuesday were a full 2 cents higher as a result of two consecutive days with disappointing inflation reports for the Eurozone.

As with all countries, global economic stagnation is causing inflation issues simply through a lack of buying and selling. As this problem is not a unique feature of the Eurozone, and because the UK by comparison are actually faring worse than their neighbours on the European mainland, this is why those poor figures only translated into single-cent gains each day.

However, rates have already begun to tail off, which suggests this was more of an anomaly than the start of a new trend for GBP/EUR rates of exchange. 

The Euro is the only currency which Sterling has made gains against since the start of the year (except the Australian Dollar which is suffering from poor news coming out of China). Sterling itself is actually weakening on the markets as flooding in the country is still persisting and is causing concerns about public debt levels.

So it seems the weakening trend on GBP/EUR is set to continue. I strongly recommend that anyone with Euros to buy in the short-term should contact me on 01494 787 478 and ask the reception here for Joshua. We can discuss a strategy for your transfer in order to maximise your currency return, and these recent gains for Euro buyers can actually be fixed if you do not require your currency until a later date.

I have never had an issue beating the rates of exchange offered elsewhere. Sterling buyers can do the same, and I can explain how best to ride these recent movements in your favour until their peak within the time frame you have to complete your transfer. jjp@currencies.co.uk

 

Greek Bailout Sorted? (Tom Holian)

Will the Pound manage to break 1.30 against the US Dollar this week?

Sterling Euro exchange rates have fallen for the last 6 out of 7 trading sessions falling by as much as 6 cents during this time.

The weekend before last the Greek interior minister claimed that there is no money left to give in Greece but since then Greek finance minister Varoufakis has settled the markets.

Recent Eurozone data has been very positive with the release of inflation coming out a lot higher than expected.

With inflation rising on the continent this is good news for the Eurozone as it provides evidence that the QE introduced earlier in the year has started to work or so it seems.

UK manufacturing and industrial production data is due out tomorrow and I think this could be negative as Services & Manufacturing PMI last week showed a fall.

US Retail Sales are due tomorrow afternoon and if positive we could see Dollar strength resulting in Euro weakness providing a short term opportunity to buy Euros at a better rate.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

 

Interest Rate Decisions, ‘Brexit’ News, Sterling forecast for the week ahead (Dayle Littlejohn)

It was a good end to the week for Sterling exchange rates. From mid afternoon Wednesday, to the close on Friday, the Pound made 4 1/2 cents against the US Dollar and 2 cents against the Euro. 

On Wednesday Janet Yellen from the Federal Reserve kept Interest Rates on hold at 0.5% as expected and stated the US are more likely to hike Interest Rates two times this year and not four as was predicted at the beginning of the year. Her dovish tone significantly weakened the US Dollar and speculators sold off their Dollars and transferred them into other currencies that would provide higher returns on their investments. Sterling benefited from the news.

The latest Interest Rate decision for the UK on Thursday was a non event as expected. However Mark Carneys speech shortly after kept the momentum going in Sterlings favour as he announced, in the future the UK are more likely to hike Interest Rates instead of cut. 

This weekend UK Pensions Secretary Ian Duncan Smith has resigned from his position in protest the cuts made by Chancellor George Osborne to the disability budget are not acceptable. However I believe similar to Mayor of London Boris Johnson, Ian Duncan Smith has a secret agenda and actually he has left his position due to his views in regards to remaining in the EU.

The former Pension Secretary is a strong believer that we should leave the ‘Brexit’ come June 23rd and by leaving his post now this is putting pressure on the Conservative Party, something they don’t need with a referendum less than 100 days away. As I have stated in previous articles the closer we get to the referendum volatility will rise and therefore exchange rates will fall. If you have a foreign currency to purchase with the Pound before June 23rd todays the day to get in touch to put a strategy in place to maximise your returns.

I expect sterling to lose value throughout Monday mornings trading period due the news of the resignation.

Wednesday morning the UK release their latest Inflation numbers. Inflation has been a worry globally due to the plummeting petrol prices. 0.3% is expected and this is the figure I believe will be released, therefore the numbers could be a non-event.

Retail Sales numbers are released on Friday and we are expecting to see a big fall from the previous month. If you need to buy a foreign currency with the Pound this week, I certainly would trade before Fridays release at 9.30am.

The currency company I work for enables me to achieve clients up to 5% better exchange rates than the high street banks and other brokerages. I specialise in property purchases and sales within the Eurozone. Therefore if you are buying or selling a property in Europe this year and want to save money by achieving the best possible exchange rates but also want help in timing your transfer, get in touch by emailing me on drl@currencies.co.uk. The more information you provide me, the more information I can provide you, below is a list of what I require:

  • Your name
  • Brief description of requirement (buying a house in France)
  • Amount in Euros
  • Your budget
  • Timescales
  • Telephone number and convenient time to call (please note I will not be back in the office until Monday morning).

Enjoy the rest of your weekend and I look forward to speaking with you Monday morning.

 

Will the last one selling the pound turn out the lights!

Pound to US Dollar rate today: GBP/USD Finds Support above 1.30

Sterling has had another torrid day suffering losses against most currencies. Against a basket of currencies we have seen a 2.9% fall in sterling across the board in 2013. The main reasons are the reversal of the view of the UK as a safe haven. In anticipation of a bad year for the pound investors are selling up and getting much better returns elsewhere.

Is there worse to come? I would expect so. In 3 months time we will find out if we are in the triple dip recession. January is probably not going to be the best month due to the snow and flooding affecting business. Retail results for supermarkets were disappointing and the closing of Jessops, Blockbusters and HMV is bad in itself but also surely a reflection of the poor state of the high street. It is important to remember that the money we used to spend in these places on a Saturday’s shopping trip is now probably being spent online with companies that pay little or no contribution to the UK. There is a huge knock on effect as money then goes outside the UK rather than in UK tax coffers. It does not filter down as wages which in turn is then spent again in the UK economy.

In or Out? The economic damage of the EU referendum is impossible to quantify but is this really the right time? We will now face months and years of uncertainty over what will happen. If the UK does leave it will surely be disastrous in the short term. This is not a message to the world that we are open for business and hence investment and the economy will struggle.

At some point in the future the pound will of course rebound but the current trend seems likely to persist for the next few weeks and months. With the economy struggling, increased political uncertainty and a world generally more optimistic about Europe it is the UK and sterling taking the brunt of market pressures.

Complacency is the worst thing on exchange rates and making sure you are up to speed on developments is key to getting the best deal. The pound could easily gain say a cent against most currencies in the next few weeks but is more than likely to lose slightly. If you are considering a transfer (even just a once off) I can assist you in developing a strategy, please email me on jmw@currencies.co.uk

Friday we have UK PMI data for Manufacturing and then next week a whole host of new economic data. Without doubt the markets are pricing in more negative sterling news so it will be interesting to see how the pound reacts to economic data in February. I expect it will be very sensitive to the data and would expect the trend will be downward against most currencies.

For February I expect therefore the pound to lose a further couple of cents against most currencies. If you are considering a transfer involving the pound or any other currencies an awareness of what is driving rates plus understanding upcoming market data could save you money. Even if your transfer is just a one off and you think everything is all taken care of, getting a second opinion could save you money. Only this week I saved a new client of ours nearly £750 on a €200k exchange.

For a free no obligation discussion of everything you need to know including an unbeatable rate of exchange, please feel free to make some direct contact. We offer a highly personal service designed to ensure you get the most from the market. My name is Jonathan, feel free to email me on jmw@currencies.co.uk or call 01494 787 478 and ask to speak with me.

I look forward to hearing from and assisting you with a better deal!

Should sterling buyers take advantage of current exchange rates?

Within my recent article published on the 3rd December, my thoughts were that this week would be an extremely volatile week for sterling exchange rates and the markets haven’t disappointing. The pound made substantial gains against all of the major currencies throughout Monday morning and early afternoon. Reports were suggesting that the UK and EU were close to agreeing the three key topics which would pave the way for trade talks early next year.

However a press conference by Theresa May and a statement by the DUP confirmed the UK still need to overcome the Irish border problems before trade negotiations begin. My opinion has not changed I still believe the UK will paper over the crack (Irish border in this instance), and therefore an announcement will be released in the upcoming week confirming trade negotiations will begin early next year.

It is likely the announcement will be made at the EU summit on the 14th and 15th December, therefore if you are buying or selling the pound short term formulating a plan now is your best option. If I were buying the pound over the next three months, I would be making arrangements now as I believe a period of considerable sterling strength is on the horizon.

Clients buying sterling are still receiving what I like to call the ‘Brexit discount’. Did you know on a €200,000 transfer now compared to Pre Brexit levels you are receiving an additional £25,000. 

For clients that are transferring a foreign currency into the pound but are awaiting for their foreign currency to become available, an option available is to use a forward contract. A forward contract allows clients to secure rates now and pay later for it.

If you are making a currency conversion in the upcoming weeks or months and want to save money on exchange rates, I would recommend emailing me with the currency pair you are converting (GBPEUR, GBPUSD) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company drl@currencies.co.uk.

Pound Sterling Information – A good end to the week for GBP? What may the Jackson Hole summit bring?

Pound to US Dollar rate today: GBP/USD Finds Support above 1.30

The pound has had a mixed week again, gaining ground against the Dollar and the ‘riskier’ currencies such as the Australian Dollar, New Zealand Dollar and South African Rand  yet finding it tough against the hard to knock down Euro.

With the once again increasing speculation of a fully blown Spanish bailout due to numerous areas within Spain needing assistance of late I would have thought the Euro would have experienced a tough week yet we have seen quite the opposite – Personally I feel there is no smoke without fire and there is an awful lot of smoke over Europe at present so there is certainly a storm brewing in my opinion and we could see problems come to light on a much larger scale than we have seen before in these next few weeks and months.

We also have the Jackson Hole meeting over the weekend which may throw up absolutely anything, it is a meeting of Central bankers, policy experts and academics and may lead to a movement from Central banks at some point in the future putting new measures in place together in an attempt to assist the markets in this global crisis. This kind of activity could lead to huge volatility so please be aware if you have a pending currency transaction to carry out you need to have a proactive and efficient currency broker on your side assisting you all the way.

 

For a free, no obligation full discussion of your options and more detailed forecast relevant to your particular situation feel free to email me directly on  djw@currencies.co.uk

It is always worth a second opinion and I have never had any trouble getting my clients the very best rate and I offer an extremely efficient service.

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