Wednesday, August 15, 2018

Sterling climbs as Bank of England may hike interest rates in August

Bank of England UK interest rate decision - August 2018

The Bank of England chose to keep interest rates on hold yesterday as expected, although the voting patterns of the BoE voting members resulted in a boost to the Pound’s value.

The markets are now expecting to see a rate hike in August, as now there are 3-voting members of the BoE that wish to see a rate hike. The Pound to Euro rate is still trading over the 1.14 mark after hitting 1.1460 yesterday, and this morning the Pound is managing to hold onto much of its gains from yesterday.

Should there be a rate hike in August, I would expect to see the Pound climb further as this isn’t the first time that we’ve expected to see thehike from the BoE. The Pound was trading a lot higher earlier in the year when their were hopes of a hike and this time the markets may be weary of buying into the Pound, in case the BoE decides against making the change which is perhaps why GBP exchange rates haven’t hit the highs of earlier this year.

There are no economic updates from the UK today, but if you’re planning on making a transfer involving the Pound and would like to updated should there be movement, do feel free to register your interest with me.

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.

Sterling Exchange Rates Volatile on Brexit Detail This Week (James Lovick)

The pound continues to hold the upper ground against the Euro after the developments last week from the European Central Bank. Rates for GBP EUR are sitting at 1.14 after the Euro dropped sharply when the ECB confirmed it will finally complete its asset purchasing scheme in the final quarter of this year. The Euro weakened further after the ECB stated that it will not look to raise interest rates until beyond December 2019. The markets had assumed that the central bank would follow more closely in the footsteps of the US and UK but that has been completely put back under a very strong dose of forward guidance.

Economic data is light this week for the UK although focus will move to Thursday’s interest rate decision at the Bank of England. Although there is not expected to be any change in rates any suggestion that there could still be a hike in August is likely to help see the pound rally. Retail sales bounced higher last week which was a much needed boost for the British economy. One set of data though is unlikely to persuade the Bank of England to take action now. In my view though the uncertainty on how Brexit will ultimately look will create a more cautious mood within the Monetary Policy Committee.

Before the meeting on Thursday though the ongoing ping pong of the Brexit withdrawal bill is likely to direct the price of sterling. The House of Lords have discussed the bill today and it will go back to the House of Commons for another vote on Wednesday. This could be a big market mover ahead of the EU summit at the end of the month.

For more information on sterling exchange rates and how to make the most of any spikes in the markets when making transfers then please email me at jll@currencies.co.uk

Pound makes gains vs the Euro and could we see further gains when the Bank of England meets on Thursday?

Canadian Dollar Strength following Bank of Canada Rate Hike

The Pound has had a good end to the week vs the Euro after much better than expected UK Retail Sales data which were published on Thursday morning.

The better weather caused Retail Sales to jump higher than the estimated figure and this in part caused the Pound to have the biggest improvement against the Euro in one day all year.

The good news was further exacerbated by the European Central Bank’s announcement to end their QE programme in December.

The previous expectation was to end it in September so to carry it on until December caused the Euro to weaken.

The further losses for the Euro came when the central bank suggested that any interest rate hike may not be coming for a very long time and this also panicked investors which caused the Euro to come under pressure against a number of different currencies including vs the Pound and the US Dollar.

With the US having raised rates twice this year and seven times since December 2015 this caused a big sell off from the Euro and into the US Dollar.

As we go into next week the big day in terms of movement is likely to come on Thursday when the Bank of England hold their latest interest rate meeting.

Previously the Bank of England kept interest rates on hold with a 7-2 split but with Retail Sales showing a massive improvement this could potentially provide some evidence in favour of hiking interest rates in the future.

I personally still think a rate hike is a long way away but if there are any hints that one may be coming then this could potentially send GBPEUR exchange rates up towards 1.15 if the news is positive next Thursday.

If you have a currency transfer to make in the future and would like to save money on exchange rates compared to using your own bank then contact me directly for further information or a free quote.

Email me Tom Holian teh@currencies.co.uk

GBP Exchange Rates Higher on Better Outlook

The pound still has the good feel factor after the impressive retail sales data this week which saw a huge boost for the high street. Retail sales arrived at 1.3% against just 0.5% which was expected providing an excellent boost for the pound a good opportunity for buying Euros in particular.

The pound has rallied by over 1% against the Euro as we end the week higher for the GBP EUR pair. After the European Central Bank (ECB) yesterday made a bold statement on maintaining interest rates in the EU at record lows until the end of 2019 and committing to ending its bond purchases by the end of this year the Euro took a sharp dive lower. Effectively the ECB gave very clear forward guidance as to future policy on when changes will take place and the market reaction was particularly strong. For clients looking to buy Euros there is a good window of opportunity whilst the markets still remain volatile with the ongoing Brexit negotiations still continuing. The economic data is finally looking a bit brighter in the UK after the cold winter and the outlook is starting to look more optimistic.

The pound is likely to see a flurry of activity over the next week after there was disagreement within government over the wording of an amendment that the House of Lords which puts forward the case for a “meaningful vote” on the final Brexit deal. It would appear that what was promised behind closed doors to rebel conservatives is not what the government is in fact prepared to offer and this is causing a headache for the Prime Minister who wants to have the option to be able to walk away from the negotiations without a deal which she feels will strengthen her hand in the negotiations. Monday will see the Brexit bill go back to the House of Lords before returning to the Commons on Wednesday. In my view this key detail will shape the negotiations and government strategy going forward and clients with a pending requirement should plan around this event.

For more information and guidance on sterling exchange rates and for assistance in making transfers at the right time then please feel free to contact me at jll@currencies.co.uk

Pound makes biggest single daily gain against the Euro this year after ECB meeting

The Pound has made some huge gains vs the Euro during today’s trading session after the latest European Central Bank meeting.

The central bank has announced that it will be ending its QE programme in December and reducing the currently monthly spend of €30bn in September to €15bn until the end of the year.

The central bank has also said that it is likely that they will be keeping interest rates on hold as the growth in the first quarter is at 0.4% and they have also downgraded growth for this year and this is why we have seen the Euro have its worst day of the year against the Pound so far.

ECB President Mario Draghi also said that the bank have not decided when they may look to raise rates owing to the rise in geopolitical tensions. However, some have suggested that a rate hike could potentially occur in a year’s time which is hardly anything to get excited about.

The Pound started the day on the front foot after a big surprise with UK Retail Sales which came out much better than expected. Figures for the year showed 3.9% year on year compared to the estimate of 2.4% and this gave the Pound an unexpected boost against a number of different currencies including vs the Euro.

Tomorrow morning the Eurozone will announce the latest set of inflation data and I think we could see further weakness for the Euro as it is likely that the ECB already have these figures.

If you are looking to buy Euros at the moment it may be worth taking advantage of these current levels as the Bank of England are due to meet next Thursday and therefore these gains for the Pound vs the Euro could be short lived.

If you would like a free quote when converting currency and would like to save money on exchange rates then contact me directly and I look forward to hearing from you. Alternatively, call me directly on 01494787478 and ask for Tom Holian when calling.

Tom Holian teh@currencies.co.uk 

 

Sterling Rates ahead of the Key Brexit Vote next Week!

Poor UK economic data and Brexit uncertainty causes the Pound to fall against the Euro

The pound is seeing considerable uncertainty this week ahead of the key vote next week in the House of Commons on the Brexit withdrawal bill. The debate commences next Tuesday and will last for two long days before the vote on Wednesday evening. This has the potential to be a major market mover for sterling exchange rates and clients with pending requirements would be wise to get in touch to plan around this event. In my view this is the event of the week for anyone with a currency requirement.

Trading prices have been choppy after much uncertainty over the agreement reached yesterday between Brexit secretary David Davis and Prime Minster Theresa May. An official Brexit backstop date has now been included in the text for leaving the EU as to when the Britain must leave the Customs Union and this is starting to shape the direction of Brexit. A white paper is also expected soon and these kind of developments are likely to see a major reaction for the pound. Clients looking to buy pounds or sell pounds should be aware of the implications from all of these developments which are likely to be the biggest drivers for market volatility.

The bottom line is that if there is any kind of political upset then the pound is likely to come under renewed and sharp pressure. If for example UK prime Minister Theresa May is defeated a number of times on these 15 amendments which have been put forward by the Lords then this could potentially result in a vote of no confidence in the Prime Minister, something the Labour Party are actively plotting. The risk of a general election at this crucial time in the midst of the Brexit negotiation could spell trouble for sterling exchange rates.

GBP EUR is sitting just below 1.14 and close to the highs seen in recent months despite the slight slowdown in the economy and postponement of the next interest rate increase. Clients would be wise to consider taking advantage of the better levels currently available to avoid any sudden drop in the rates. There is a flip side to all of this and that is if the prime Minister can win all the votes possibly by conceding a few and come out unscathed then this could prove to be beneficial for her leadership and hence the pound.

For assistance in making transfers and for guidance on the timing of an exchange then please get in touch with me at jll@currencies.co.uk and I will be happy to assist and give you my views on the markets.

Minimal data out today for the U.K – European growth and U.S employment figures the large releases of the day – Political issues in the U.K also key this week

We have minimal economic data out for the U.K today, the Pound has remained fairly flat in early morning trading.

As the day progresses we do have other economic data releases from around the world that may impact the Pound against the Dollar, Euro and Canadian Dollar along with other major currencies.

At 10:00am today we have the release of European growth figures, expectations are for the quarter on quarter figures for the first quarter of 2018 to remain at 0.4% with year on year growth unchanged at 2.5% as well. Any change to these expectations may lead to a volatile morning for the Euro, is has been mentioned in recent times that growth around the Eurozone has slowed a little so should this be shown in the figures today the Euro may weaken.

Later in the day we have jobless claims figures out from the States which of course will be important for both the Dollar and all major currencies as it will impact global attitude to risk. Non-farm payroll data, which is the number of people in non-agricultural employment came out better than expected last week so we may see further positive news for the Dollar should these figures follow suit which may push GBP/USD rates back down again in trading today.

On top of all of this we still have a huge amount of problems hanging over the head of the Government, mostly regarding Brexit and their plans going forward regarding this. There are reports that David Davis,  Secretary of state for exiting the European Union is not happy with the current plans set out by Prime Minister Theresa May and may even stand down from his position, should this happen then I would expect that uncertainty for the U.K would increase and the Pound could easily lose value fairly rapidly.

If you have a currency exchange to carry out involving either buying or selling the Pound and you would like my assistance with it then you are more than welcome to contact me personally. I would be highly confident that not only would I get you a better rate than your current provider but also a first class level of customer service too. Feel free to email me (Daniel Wright) directly on djw@currencies.co.uk with a description of your needs and I will be happy to contact you personally for a free no obligation discussion about them.

Pound makes gains against the Euro and the US Dollar but how long will this last?

Pound gains against Euro and Dollar

The Pound made some gains yesterday after much better than expected UK Services Sector data which showed a rise to 54 compared to the previous month which was 52.8.

This has given rise to a hint that interest rate rises may be discussed again but until we have a flurry of good economic data I do not foresee a rate hike coming in the near future for the UK.

The Pound is now trading above 1.14 against the Euro and also 1.34 against the US Dollar following on from the news.

Meanwhile if we look at the political landscape over the next few days the EU Withdrawal Bill will be discussed next week on June 12th. The House of Lords had made a number of amendments last month so next week’s meeting could cause a lot of movement for Sterling exchange rates this time next week.

Over in Europe things appear to have settled down slightly in Italy with New Italian Prime Minister Giuseppe Conte announcing new plans for moving the country forward including cutting tax and curbing immigration.

One real sticking point however for Italy is that they currently have a debt of 130% of GDP which is clearly a big concern and way above that expected by the European Union.

The Italian debt problem could cause a big problem in the future but at the moment things do not appear to be reflected in the value of the Euro which highlights to me the problems faced by Sterling caused by the ongoing Brexit uncertainty.

My personal opinion is that we’ll see Sterling remain in a fairly tight range as we have seen over the last few months but with a number of economic data releases over the next few days including Eurozone GDP data due out tomorrow and the latest NIESR UK GDP estimate for the last three months published on Friday we could see a volatile end to the week for the Pound.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank then contact me directky for a free quote and I look forward to hearing from you.

I work for one of the UK’s leading currency brokers and I’m confident with my 15 years experience that I can be of assistance to you.

Tom Holian teh@currencies.co.uk

Italian political issues appear to be the main driver for currencies so far this week

The week so far has seen quite a lot of volatility for Sterling exchange rates, however the reasons for the Pound moving against most major currencies are not down to political or economic data from the U.K but actually mainly driven by Italian politics, Donald Trump and North Korea.

Italian politics has been one of the main focuses for the week for investors and speculators, as news broke earlier in the week that the two big winners from the election – Five Star and The League had failed to form a Government, this instantly led to a drop in the value of the Euro and also for all of the perceived ‘riskier’ currencies, for example the Australian Dollar and the New Zealand Dollar.

As the week has progressed it does appear that the heightened uncertainty has lifted and only just this afternoon the two groups had agreed to give the matter more time and that they would once again continue talks and try to come to a positive conclusion so that they can move forward together.

Due to this we saw GBP/EUR exchange rates drop back  down into the 1.13s and the Pound also lost ground against the riskier currencies once again too.

The main key piece of data left for the U.K this week is manufacturing data due out on Friday morning at 09:30am, we do however have European unemployment and inflation figures out tomorrow morning, and also Non-Farm payroll data from the U.S on Friday lunchtime at 13:30pm.

Non-farm payroll data can impact all major currencies as it has an effect on global attitude to risk, so be sure to keep a keen eye on the market on Friday afternoon to see what impact this has had.

If you do not have time to watch the markets closely and the broker or bank you currently use does not do this for you then it may be time to change. If you would like my assistance with your exchange, both in terms of getting the best exchange rate and also helping you take advantage of the timing of the transfer when spikes occur then feel free to contact me (Daniel Wright) directly. You can email me on djw@currencies.co.uk and I will be more than happy to contact you personally for a no obligation discussion about your whole situation.

 

Could the Pound fight back vs the Australian Dollar towards the end of the week?

The Pound has made some small gains vs the Australian Dollar during today’s trading session after UK wage growth increased at an annual rate of 2.9% during the first quarter of this year.

The data outpaced inflation and the combination of falling unemployment has helped the Pound make some gains vs the Australian Dollar. With the growth in wages this may provide the Bank of England with some evidence to support an interest rate hike in the longer term.

The news is clearly a good sign for the British economy but as the central bank held rates on hold only last week with a 7-2 split I don’t think the BoE will be raising interest rates any time soon.

Tomorrow morning Australia releases its own Wage Price Index which is a measure of inflation so this could negatively affect the value of the Australian Dollar if the data shows a reason for concern.

Arguably the biggest day for anyone with an Australian Dollar requirement will come on Thursday when Australia announces the latest set of data for both the Unemployment rate as well as the participation rate which will provide a measure of how the economy is performing down under.

Having broken back past 1.80 I think we could see a few positive days ahead for the Pound vs the Australian Dollar so if you’re thinking about making a currency transfer to Australia it may be worth keeping a close eye out for what will happen during the course of this week.

My prediction is that if you’re planning a purchase of Australian Dollars it may be worth aiming to try and get 1.81.

Having worked for one of the UK’s leading currency companies for 15 years I am able to offer you bank beating exchange rates as well as helping you with the timing of your transfer when exchanging Australian Dollars

For a free quote then contact me directly by calling 01494787478 and asking for Tom Holian when calling or email me directly with a brief description of your currency requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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