Sterling slips slightly ahead of key inflationary data

GBP EUR Edges Higher After Recent Rates Sell-Off

The Pound has lost a minor bit of ground against a basket of major currencies in early morning trading as investors anticipate Mervyn King to have to send a letter to the government for the 8th month running – He has to do this to explain himself when inflation is above 3%.

Although higher inflation generally leads to a higher chance of interest rate hikes in this case it may not always be seen as postiive as the higher inflation gets effectively the general public in the U.K are taking a pay cut as everything costs more yet wages are highly unlikely to be increased.

Unless there is a major change to the expected data then I do not forsee huge changes to the value of the Pound today however as regular readers will be aware absolutely anything can happen on the currency markets and surprises are no surprise these days!

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

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The Pound has had a mixed day against most major currencies, losing even further ground against the Dollar yet still holding up in the high 1.21s against the Euro.

No major data has been released today and it appears that the markets are moving very much off the back of risk appetite.

Do you fancy yourself to be able to predict what the GBP/EUR rate will be on 31st August at close of play?? Our friends at Foreign Currency Direct are running a competition which is completely free to enter and takes just a minute of your time… I have guessed 1.2297 but feel free to comment on this post and see if you can get closer than me….. If anyone gets it spot on from this site then I may offer a bonus prize as it shows the high calibre of Pound Sterling Forecast readers!

Don’t delay – have a go today and feel free to tell everyone you work with and all of your friends!!!

Inflation report & unemployment data could damage the pound

Today could be an extremely important day for anyone with sterling requirements. Should you be selling or buying the pound, today we have the quarterly inflation report by the bank of England.  Now when when Mervyn King normally speaks on matters of the economy, he  has a tendency to talk the pound down. It is likely that the Bank will have to raise its inflation forecasts, and cut its growth forecasts for 2011 and 2012.

We also have some unemployment data out for the UK too. I am sure there will be movement on sterling exchange rates after the data is released to the market at 9.30 AM.

I feel that over the next few months the pound could slip away from its current spike against a host of currencies. I believe that we could see significant public sector unemployment. This could lead to a dip in consumer confidence and reduced spending in the economy which could have a knock on effect to the growth of the UK economy and weakening our GDP.

For these reasons I would not be surprised that if over the next few months the pound could could slip back down to the early teens against the Euro and back into the 1.40’s against the USD.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Sterling US Dollar Exchange Rates Close to 6 Month High

Sterling dollar exchange rates have hit a six month high in the last few days. At the time of writing the pound is down marginally for today, but overall holding relatively firm v’s the dollar.  A lack of action from the Bank of England today (keeping interest rates on hold), has meant the market has been relatively stable with only a 1 cent movement from high to low.

Looking a head it’s difficult to predict cable movement (GBPUSD) but it is worth bearing that we are at a six month high if you do need to buy USD! Sometimes it’s best not to gamble and I think now is the time, sterling is up 4.5% in the last month, and around 11% from the lows of 2010 in May.  

In terms of a forecast, I think it really depends how the UK economy fairs.  We have a slowdown in the US priced into current rates, so the main issue for sterling is that the budget cuts and public spending reductions are coming in to force in the next few months.  These could have a very negative effect on exchange rates as it may lead to:

  • Reduced consumer confidence
  • Reduced consumer spending
  • Higher public sector unemployment
  • Lower levels of GDP growth, and possibly GDP contraction

At present there isn’t a great deal of focus on these cuts, which is why the pound has held up around a six month high recently.  I personally think we could see things head back toward the low 1.50’s, so my overall feeling would be not to hold on too long if you need to buy USD.  For more information, fill in the form on the right.

Sterling continues strength against Dollar and Swiss Franc – holding steady on Euro

The Pound has made yet again further gains on the Dollar as it heads onwards and upwards towards the 1.60 mark.

It appears investors are now starting to pull their funds out of the so called safer havens of the Swiss Franc and U.S Dollar and take a punt of perceived ‘riskier’ currencies such as Sterling following better than expected GDP (Gross Domestic Product) data out just over a week ago.

The economy grew by 1.1% in the second quarter of 2010 and this has pushed the possibility of a double dip recession that little bit further away where as it appears to be geting closer and closer in the U.S

Be aware though that a common saying on the currency market is that when the U.S sneezes the U.K catches a cold – So my personal opinion is that Sterling may climb a little further over the Dollar and push through 1.60 however it may find it hard to push on much further following that and could be range bound from 1.55 to 1.65 for quite a long time now.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Currency forecast and how a broker can help you

Sterling has made gains against the Australian Dollar and Kiwi Dollar this morning following some less favourable news from down under.  Interest rates in NZ were expected to go up 0.25% this month but that now looks less likely which has weakened the NZ Dollar.  In Australia  consumer price index (inflation) can out below expectations.  This reduces the chance of an interest rate hike (rise) and there fore has weakened the Aussie Dollar.

Against the US Dollar and Euro sterling has lost a small amount but is holding relatively firm at present despite Mervyn King (BoE Governor) speaking to the Treasury select committee at the moment.  King has tended to have had a negative effect on the pound in the last 18 months as he has been quite negative when discussing the outlook for the UK and sterling.

The pound sterling forecast website has been running for just over a quarter of a year now and we have built up a big following in that time.  I have also spoken with many people who have been following the site and subsequently saved them money on their currency transactions.  I would imagine that most people reading out posts and forecasts will be carrying out a currency exchange, or at least considering one.  If this is the case, then to find out how you can make a substantial saving on your transfer, do fill in the enquiry form on the right of the page.  One of the PSF currency dealers will be in touch to explain more about the service, it may even be me!

Pound Sterling Strength GDP Figure for the U.K much better than expected

A quick update from me as I have plenty of clients to call and trade due to the U.K GDP figures coming out much better than expected.

Analysts had thought a figure of 0.6% would be released however the actual figure was 1.1% – a lot higher than expected and this has led to Sterling gains accross the board.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the form on the right hand side and one of the experienced traders that write on this blog will be in touch shortly.

Pound Sterling Forecast and update for the week so far – interesting news on Canadian and Australian Dollar

Sterling has had a reasonably positive start to the week as predicted in my previous post gaining ground against a variety of major currencies, however losing against the Canadian Dollar.

The losses against the CAD were surprising, as during the week they did raise interest rates over there by 0.25% (however this was widely expected therefore didn’t lead to much strength) but at the same time they also revised their expected GDP (economic growth forecast) down for the rest of the year.

In Australia, the wheels are now fully in motion for an election over there expected on the 21st August  – we are all aware just how important the election was for the U.K and indeed the Pound so I would imagine we should see the same volatility for the Australian Dollar over the next 6 weeks.

Should they head for a hung Parliament then we could see the AUD weaken leading up to the election or should things lead to a majority victory then the AUD may gain much more strength as political certainty is one of the main drivers for the strength of a currency.

Once again there are important economic releases for the U.K every morning this week so if you have an upcoming transaction to do then it is imperative you let one of the currency experts here at Pound Sterling Forecast know so they can keep you up to date with what is happening in the markets – Just fill in the form on the right hand side of this page and someone will contact you shortly.

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