GBP USD Exchange Rate Forecast

The pound has fared badly against the USD losing over 5% in the last month, looking ahead at today’s releases the key market movers are likely to be non-farm payrolls and unemployment data.

 Due to the huge size of the US economy and numbers of people involved, this is always a difficult figure to predict.  As a result, expectations can vary significantly from reported figures and this can lead to market volatility.  Based on strong economic data from other areas of the US economy, some analysts may be expecting a fall in unemployment. However, if yesterday’s Jobless Claims figures are anything to go by, (showing a slightly higher than expected number of claims), we could see poor figures released today.

If like me, you are not sure how this release will move exchange rates, it may be worth filling in the enquiry form on the right to see what contract best suits your individual circumstances, and help you to protect your funds from adverse movement and still benefit from excellent exchange rates.

GBP EUR exchange rate high and forecast

The pound has made considerable gains in trading this week and currently sits close to a 19 month high against the Euro.  Spikes like this are often short-lived, and in my opinion the pound could lose ground against the Euro next week, falling back toward the 1.17 mark.

The good news is that interbank rates are currently more than 3 cents above this level.  If you are looking at buying euro’s over the course of the next month, now could be the perfect time to buy on spot, or lock into a forward contract.  It is worth taking note that EU GDP figures are released at 9:30 today, this could cause market volatility, so bearing in mind the current spike , it may be worth filling in the PSF enquiry form on the right

GBPEUR 3 Month Movement up 9.2%

 We have seen a number of positive data releases for the UK this week, from increasing house prices, to strong manufacturing figures. However, I expect the pound to fall away from current highs next week because we have a host of German data out. 

The German Economy is outperforming the rest of Europe and I think industrial production and trade balance figures next week may shift focus from EU countries like Greece and Spain, reminding investors that some European countries are performing very well.  Couple this with news that the G20 are set to agree a rescue package for the Euro today and I expect the single currency to strengthen.

On the GBP side of things, I think focus could swing from the positive data we have had this week, back to more negative issues.  The UK trade balance figure is released at 09:30 on Wed 9th.  As it is widely hoped that exports and capital inflows (from overseas investment) will help the UK fully recover from recession, this figure is very important.

Based on a poor trade balance last month, I would not be at all surprised to see another negative figure and this could lead currency speculators to question the UK’s ability to address its huge national debt and budget defect, and recover from recession.  If this does happen I would expect sterling exchange rates to fall. So, with the possibility of a strengthening euro and weakening pound next week, current trading levels look very attractive.

Sterling exchange rate forecast

Sterling exchange rates in general have had a positive day. With good gains against the Euro, Canadian Dollar, Australian Dollar and South African Rand. Although we have seen continuous losses aginst the US Dollar and YEN as investors are still looking for a safe haven with their investments.

Data out today for the UK which had most significance was the second estimate for Gross Domestic Product for the last quarter. Up in line with expectations hitting 0.3% as opposed to the prior estimate of a 0.2% increase.

The markets for the pound are reacting well over the last couple of days trade but if you have requirements to buy USD or YEN you should be wary as the more investors that turn to this safe haven will have dire affects for the pound. We could see levels dipping below the 1.40’s if this trend continues.

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.

GBP EUR and GBP USD Forecast

Inflation figures are key for sterling tomorrow, with UK, European and US figures all released.  A high or rising inflation figure may be the first indication of an interest rate hike in the future, so anyone looking to predict or indentify movement should keep a close eye on the figures.  UK inflation figures are released at 9:30, followed by EU figures at 10:00am, then US figures at 13:30. 

For the EU Trade balance figures are out at 10am, some readers may recall that UK trade balance figures last week were very negative and caused some serious sterling weakness.  The Euro figures today are expected to show a surplus, as they have done for the last three months.  This would be good news for the Euro zone and could lead to some strength for the single currency.  With the Euro having lost ground against a host of currencies recently this could present an excellent opportunity for anyone selling Euro’s.

 The other main factor for the Euro is the situation in Greece, which is still rumbling on.  There is both uncertainty and fear in some areas of financial markets that problems could spread to Spain Italy and Portugal.  An increased chance of contagion could see the Euro weaken.

Sterling Spike – been and gone?

Now that the UK has a new coalition government and the currency markets have calmed somewhat, we are starting to get an idea of how the pound is valued in world markets.  The authors here on pound sterling forecast had been predicting GBPEUR to hit 1.20 if we got a conservative majority, and GBPUSD to hold above the 1.50 mark.  Unfortunately the coalition creates a little uncertainty, (which as we know well the markets dislike) and this has led to some sterling weakness.  The question now is will this weakness continue?

In my opinion the pound may well weaken in the short term, I feel there are five main reasons for this:

1.  In the short term – uncertainty over how successful the coalition governement will be

2.  The huge budget deficit and national debt problems that the UK must overcome

3.  Austerity measures (government cuts and increased taxes)

4.  The need to keep the pound weak in order to attract investment from overseas and help UK exporters

5. A prolonged period of low interest rates in the UK

The above factors are key to the pound, as all have an effect on the potential for economic recovery in the UK.  Ultimately this will be the main driver for the pound.  If we see strong economic recovery then I expect the pound will increase in value, the issue is that economic recovery is likely to be sluggish and the factors above are either symtons or precautionary steps that will be taken as a result.

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 exchange rates remains volatile

Anyone with currency requirements over the past few weeks will no doubt have been keeping a very close eye on the markets, (and hopefully pound sterling forecast!)  The pound has seen swings of 3% and more as the election, Greek crisis and stock market volatility have all played their part in causing considerable market volatility.

Now that we have a coalition government in place the questions turn from who will be in Government?….. to how will they govern?

The basic premise of a Conservative majority in coalition with the Lib Dems has pleased the markets and the pound has spiked in value over the course of this morning.  Looking ahead the ‘how’  is now key to the UK and to the GBP.  Any uncertainty about the strength or legitimacy of the coalition could cause sterling weakness, we have in fact seen a little weakness this afternoon.  With key issues such as the budget deficit, and national debt to address there are plenty of challenges ahead.  For the pound a lot will depend on exactly how our new coalition government deal with these issues.  Clear, credible policy will be essential if the pound is to avoid taking losses.

The final point I would like to make is that anyone now hoping to see the pound to push on through the 1.20’s and toward the 1.30’s, may want to consider the fact that the Government, and Bank of England are likely to be keen on keeping the pound weak.  This will help attractinvesment from overseas and assit the economy through making exports cheaper.

The good news is that we are currently trading just below a 10 month high against the Euro, and the pound is up against the USD and CHF from last week.

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 – A volatile day ahead

GBPEUR rate remains steady as markets await the Autumn Budget

My forecast is for sterling strength today.  If you are looking to buy foreign currency I think today could be a good day to secure a rate.  If on the other hand you are selling currency, you may want to have a good think about your budget as if we do get a strong coalition in the UK you could see some further GBP Strength.

It is worth noting that if we do see any negative fallout from the talks between the major parties, then you could see some sterling weakness.  If none of the parties can come to an agreement the uncertainty that would cause would probably lead to the pound losing value.  At present we are seeing GBP strength because it looks like an agreement will be reached.

If you would lik any further info, or if you want to offer your opinion, please email me ajm@currencies.co.uk .

Sterling hits 1.18 – huge movements during election

The Pound is really volaitle tonight as speculators try to guess just which way the election will go… it has been in the 1.16s against the Euro and has now hit the 1.18s at 2am this morning….. keep your eyes peeled as in the next few hours will be huge for the Pound!!

How the election could affect GBP Exchange rates?

GBPEUR rate remains steady as markets await the Autumn Budget

The general election has caused a great deal of volatility for sterling exchange rates over the last few weeks.  Anyone with a currency requirement will have had a close eye on the market I’m sure.  While anyone selling foreign currency may not have been too happy, if you are looking to purchase foreign currency no doubt the current spike makes things a little more attractive.

IN the most basic terms I’m expecting the following GBP movement based on the election

  • Hung Parliament  – Sterling weakness, with the pound dropping 2% percent max across the board
  • Conservative Majority – Sterling strength, I don’t expect  more than 1.5% gains across the board

* My own disclaimer is that this obviously is a very crude analysis!  With all currency transfers you need to consider the other side of the transaction i.e. in GBPEUR, the issues affecting the Euro, like the Greek crisis, but as a rule of thumb it’s a good guide in my opinion.

How to manage your transfer

It is always incredibly difficult to pick the peak of a spike, especially when it is based on a general election.  In such a situation it’s best to try to take a step back and look at the return you are currently getting.  Ask yourself, “if rates move in the wrong direction, can I afford to take pay the extra?”  If you can and you are a risk taker, it may be worth seeing how things pan out with the election.  However, If you tend to be more prudent and the return on your currency at present is acceptable, it may be worth booking a rate today.

Either way, if you want to find out a little more about the contract types available, and the ways in which you can hedge your bets (book 50% today and 50% after the election for example), then email me ajm@currencies.co.uk  or fill in the enquiry form on the right of this page.

Pound Sterling Forecast – Currency Market Update

As many readers will be aware the pound has made some good gains in the last few days against a host of major currencies.  When we see a spike like this it is often useful to take a step back, to look at the trend over the last month.  For anyone holding sterling buying foreign currency it’s good reading, some of the headliners: 

GBPEUR  +2.42%                                         GBPZAR +4.21%

GBPAUD +1.53%                                          GBPCHF +2.65%

From the sterling side we’ve seen the pound make gains due to increased confidence in the UK economy as the Greek crisis has highlited a weakness in the euro zone.  Onthe Euro side we’ve seen a ‘sell off’ of Euro’s becasue of the debt problems in Portugal Italy Spain and Greece.  The inability to reach a quick and unanimous decision also damage Euro exchange rates. 

The election tomorrow is really the main focus for the pound now.  I think we have the chance of a Tory government now priced in, but only the chance.  I think if we do see a Conservative majority then you could see rate improve around 2 cent, but I would be very surprised if interbank levels push through the 1.20 mark.  On the other had if we do get a hung parliament I would expect to see some sterling weakness and the pound fall back down to interbank levels around the 1.15 mark.

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