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Sterling forecasts – How to play the markets

EU summit to influence the Sterling to Euro rates this weekend

GBPEUR rates has returned back to a volatile trading pattern as the new month has started. This is due to the economic data cycle starting again with a lot of updates on the economic health of the countries around the world. We have already had PMI data sets for the UK’s manufacturing sector and Service sector. These were mixed with manufacturing worse than expected and the service sector exceeding what had been expected. This is one of the reasons why the GBPEUR rates have now moved by over 2 cents between the high and the low this week already.  It shows and highlights how quickly things can change making a dramatic difference to the cost of anything from a holiday to a holiday home. Here we provide a service helping our clients through the currency maze. Informing them of information pending, forecasts, and expectations for the market so they can make an educated decision on when to trade. PLUS with access to award winning exchange rates you can be sure to save money compared to your current provider; both bank or broker. Simply put if that was not the case we would not be in business!  Feel free to test our service by getting in contact with STEVE EAKINS via hse@currencies.co.uk

So what is expected for the rest of the week.  Well today we have potentially the largest data sets for the month with interest rate decisions being published by the banks on both sides of the channel.  Any change here could be hugely significant changing prices not just for this week but for the months ahead, so if you are readying this and don’t need to look at markets for a few weeks or months it is still worth following these releases. Personally I don’t expect any change in policy at a central level but we could quite happily see commentary from the Europeans this afternoon change market values. Mario Draghi, the head of the bank follows the release with a press conference which is when this could happen. With data missing expectation across the single currency, a large Portuguese bank needing a bail out along with 3 Greek banks in the last 30 days.

If you would like an update when this hits the press please register your interest by emailing hse@currencies.co.uk with a summary of your situation and contact details.

Happy trading!

Sterling rate movements yesterday Pound forecast going forward against Dollar, Euro, New Zealand Dollar, Australian Dollar

Halfway to recession?

Yesterday morning saw the release of U.K GDP (Gross Domestic Product) figures for the fourth quarter of 2011 released and unfortunately they did not make great reading for the U.K. Gross Domestic Product figuresshow how much an economy grew or contracted in that particular period and the prediction was for the U.K economy to have shrunk by 0.1%

The figure actually came out at -0.2% which doesn’t sound a lot but it does however mean we are indeed closer to a recession than many had first thought.

An economy is officially in a recession when it has two consecutive quarters of negative growth and with the U.K ending the year with one there is every chance now we could start the year with our second and the Pound may drop accordingly.

We will not find out the results for Q1 2012 until April – but if indications are there that this may be negative then Sterling exchange rates may find the next few months very tough – So far in the U.K we have managed to dodge any serious winter conditions, such as the weather we saw this time last year however should it come back and the economy take a hit accordingly then this may be enough to tip the balance.

Of course there are various problems globally that will no doubt hold back many other major currencies, The Euro Zone is also expected to drop back into recession territory as a whole at points this year so there will no doubt be various buying and selling opportunities along the way. Call us today on 0044 1494 725353 should you have an upcoming requirement and let us be that extra pair of eyes and ears on the market for you.

BOE Minutes – How will further QE affect the Pound?

The Bank of England minutes were also released yesterday and the results of which are probably why the Pound did not take a nosedive yesterday. All nine members of the BOE voted in favour of interest rates staying on hold and also, which is key the (QE) stimulus plan to be left on hold for the time being. It looks like the market had slightly priced in further QE in the near term and the fact that not one member was in favour right now should delay further stimulus for another month or two.

When more money is pumped into the economy it generally does weaken the Pound, and regular readers will be aware the mere mention of this does lead to weakness for the Pound, so be aware this will be a hot topic in the coming months.

Federal Reserve minutes and Dollar Exchange rates

Last night the Federal Reserve released their minutes from the first interest rate decision of the year in the U.S. They also tend to comment on economic conditions and how they plan to tackle their economic problems going forward.

In a Statement the Fed state that they expect interest rates to remain extremely low until late 2014 which did weaken the Dollar slightly shortly after the release. Interest rate hikes generally make a currency more attractive to investors and the fact they are planning to keep this low for quite some time may put investors off of putting their money into the USD.

I personally still expect the Dollar to perform well this year due to the problems globally, if you have Dollars to purchase this could be a great opportunity for you as it wouldn’t surprise me to see the GBP-USD rates below 1.50 in the next six weeks.

However, in a press conference later on last night some slightly positive news for Dollar buyers was the fact that Ben Bernanke had stated that the Fed would still be prepared to inject financial stimulus in the near term, which has opened up the door for QE3 in the U.S. This has been expected for some time though so I do not expect this to weigh too heavily on the Dollar.

KEY DATA WATCH: U.S  GDP Data Tomorrow at 13:30pmThis data could lead to a volatile end to the week as it is a key indicator as to how the U.S economy is performing. Expectations are for a reasonable jump in the right direction which could round off the week on a high for the Dollar.

RBNZ Interest Rate decision

The Reserve Bank of New Zealand kept interest rates on hold last night, giving the NZD a little more strength overnight. NZD rates are (like the AUD) closing in on the lowest we have seen in years and there is no guarantee they will be shooting back up again soon, with interest rates staying high and economic data fairly solid you may have quite a wait on your hands if you are awaiting a large movement back.

Data that may affect the Pound Today

Today is extremely quiet on the data front for the Pound and most majors, however do be aware that at any point we could hear news on the Greek debt talks. If so called ‘positive’ news comes from the talks then going on previous movements we could see some Euro strength pushing the Pound back below 1.19 and back out of arms reach of 1.20.

To give you a quick background, we are currency brokers and have been in the industry for years, this site was set up set up two years ago to give clients simple but informative information and now have 20,000 people a month stop by for information.

Last year we had thousands of people get in touch with us through the site, of which hundreds have already used us and we have saved them money over their high street bank or current broker, you can get in touch with us by clicking here and setting up a free, no obligation trading facility to get a quote within minutes….

There is no harm in comparing rates even if you have used someone else for years – Just like buying car insurance you need to always shop around. You can also email me directly djw@currencies.co.uk with any questions or queries.

I look forward to speaking with you.

Sterling hits record high against the US Dollar, but is trouble on the horizon? (Daniel Johnson)

Carillion to enter liquidation

Sterling has had a very impressive week against the US dollar hitting pre-Brexit vote highs of 1.38 yesterday. We have also seen GBP/EUR remain in the 1.12s despite the recent formation of a coalition government in Germany.

However things are not all rosy. Carillion, Britain’s second largest construction firm could go into liquidation which could cause thousands of job losses.The government has received criticism for awarding contracts despite knowing the company was in trouble. Carillion are currently working in public services schools including running prisons and schools, not to mention their involvement in HS2.

With Carillion’s links with other firms working on this project this could have a detrimental, wide spreading impact. There is also a huge amount of pension money tied up with the firm, let us hope it does not mimic the situation with BHS.

Phase Two of Brexit talks could create GBP weakness.

Phase Two of Brexit negotiations will still be the biggest factor in the Pound’s value. At present things do not bode well. Both parties are at loggerheads before talks even begin. Trade will be one of the most difficult issues to overcome and talks are expected to be far tougher than phase one. A target has been set for October to have negotiations completed , a target that I feel may well be extended. I think short to medium term the pound will remain under pressure. I am of the opinion a deal will eventually be struck however and Sterling will have the opportunity to have a significant rally. I would not expect this occur until late 2018.

If you have to move before this date it is vital to be in touch with an experienced broker to keep you up to date with what is happening in the markets and to make sure you are aware of a any spikes in your favour.

If you have a currency requirement, I will be happy to assist personally. I will do my utmost to make sure you get the highest return on your trade. I am also in a position where I can confidently say I am in a position to beat any Bank or competitor’s rate of exchange and would be happy to perform a comparison to demonstrate this. I work for Foreign Currency Direct PLC, a firm registered with the FCA and one that has been trading in excess of 16yrs, you can trade in safety.  If you would like my help I can be contacted at dcj@currencies.co.uk. Thank you for reading.

Will the Budget cause volatility for the Pound? (Daniel Johnson)

Hammond under pressure to deliver optimistic budget

Philip Hammond, Chancellor of the Exchequer, is facing under pressure by Conservative Euro skeptics to be positive about the UK’s exit from the EU and utilise the budget to put forward an ambitious policy change in the form of tax reductions and an increase in spending.

Hammond has told fellow MPs he intends to stick to his plans and keep with his fiscal rules. He is confident he can reassure the markets that he has a firm handle on public finances during such an uncertain period.

Many conservative members who are in favor of Brexit have been critical Hammond for his negative opinions on Brexit. It is felt he is not embracing the opportunities created by the UK’s exit from the EU. I am of the opinion it is right to be cautious looking at the damage that has been caused so far.

I would not expect great shakes from Hammond, I would expect a rather constrained budget. I wouldn’t being hanging fire considering the improvements for the pound we have seen against the majority of major currencies.

Is an Exit Deal on the cards?

Britain was given a two week ultimatum buy Michael Barnier and has reminded negotiators an exit bill must be agreed in order for trade deals to progress.

An offer of €20bn has been put forward by the UK, but there is expectation that May will offer an improved offer of €38bn in December. If an offer of this size is accepted I would expect Sterling to strengthen as this would pave the way for negotiations to commence.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

 

Sterling gains vs the Australian Dollar owing to Brexit and the Australian property market

GBPAUD Forecast - Is the pound likely to make a move back towards 1.85?

As predicted in my previous article over the weekend the Pound briefly touched 1.80 against the Australian Dollar but has failed to maintain the levels just yet.

However, I think it is simply a matter of time as in the short term I think the Pound will be able to make a concerted effort to break past 1.80. This is good news for anyone looking to buy Australian Dollars with Pounds.

Brexit latest news

Prime Minister Theresa May has been speaking this afternoon about the latest update on Brexit and as yet has said little to spark any excitement in the foreign exchange markets.

Theresa May will be going back to the European Union to try and get some amendments to the current deal on offer but is this her just going through the motions?

The likelihood of extending Article 50 is one of the main reasons for Sterling’s strength in the last few days and this is why I think the Pound will be able to break past 1.80.

Problems with the Australian property market

Another reason why I think the Australian Dollar could be struggling is down to the problems in the housing market in Australia. Property prices in both Sydney and Melbourne have seen a fall in recent months. As a lot of Australians’ wealth is tied up in their homes, could this start to adversely affect consumer spending and then have a negative knock on effect on Australian GDP data?

With Australian unemployment coming out on Thursday morning, if this comes out lower than expected this could be the catalyst to see the Pound improve against the Australian Dollar.

Having worked in the foreign exchange industry for 16 years I am confident that not only can I save you money on exchange rates compared to using your own bank, but also help you with the timing of your transfer. If you would like a free quote when buying or selling Australian Dollars then contact me directly for a free quote using the form below. I look forward to hearing from you.


When is the best time to Transfer your Currency? (Daniel Johnson)

Pound to Dollar Rates Fall Below 1.30 as US Economy Performs

Sterling is looking very weak at present having fallen in value against all major currency pairings. The pound is suffering due to a series of poor data releases. There has been poor manufacturing, industrial and retail figures of late, not to mention the shocking trade deficit data. The main factor in Sterling’s weakness however is the EU referendum. Current FT polls show 44% of the UK population wish to remain in the EU, 41% wish to leave and 15% remain undecided. It is an extremely tight call, which will have major bearings on the UK economy. Personally I feel it would be madness to leave, it would strain trade relationships with those in the EU and hit our already dwindling exports hard. If we were to leave I would not be surprised to see Sterling fall significantly against a host of currency pairings.

I think we will remain in the EU, Cameron has simply been posturing in order to get what he wants, fingers crossed his reliance on a sensible vote from the UK population is not misplaced. Until the EU referendum is concluded I do not think there is much hope of significant Sterling gains.

GBP/EUR

When should I buy Euros?

If you are a Euro buyer and you have to move short term it may be wise to move sooner rather than later, As mentioned above I don’t think we will see any big swings in Sterling favor until after the EU referendum unless Draghi implements further QE. (see below)

When should I sell Euros?

Euro Sellers, Despite the current situation looking very rosy for the Euro at present, Mario Draghi the head of the European Central Bank has indicated he is willing to to increase monthly increments in the Quantitative Easing (QE) program as early as March. QE is essentially pumping money into an economy in order to stimulate growth. The last time this occurred Sterling rose in value upward of five cents.

GBP/USD

Janet Yellen the Head of the Federal Reserve had previously stated there could be several rate hikes in 2016. She has however recently said that this is now unlikely due to global economic uncertainty. GBP/USD is very difficult to predict at present. Sterling’s weakness is obviously justified at present due to the factors listed above, but on the US side you have to take into account the Presidential election. During times of political  uncertainty the currency in question generally weakens. Although I think we will have to get much closer to election time to see it have a significant affect. With the possibility of the EU referendum taking place possibly as early as June and the US election due in November we could well see a Sterling rally.

Moving short term however is a tricky task, for both Sterling and Greenback buyers I would suggest trying to time your trade on a Spike to maximise your trade. this is indeed a very difficult skill and I would advise getting in touch with a Broker can keep their eyes and ears ion the market for you.

GBP/AUD

GBP/AUD yesterday fell through the 2.00 resistance barrier, although I can’t see much further gains for the Aussie. I feel it is over valued. It has rallied due to a recent speech by Reserve Bank of Australia governor Glenn Stevens. Stevens had a bullish tone, stating there has been an increase in house building and consumer spending quelling fears of a drop in interest rates. However, I think a rate drop could still be on the cards, China could well change monetary policy in order to try and stimulate their current dwindling growth levels in which case the Australians could well to follow suit.

When should I buy Australian Dollars?

I think we will see some Sterling strength in the short to medium term, however I would set a realistic target rate. I do not think we will be seeing 2.06 + any time soon.

When should I sell Australian Dollars?

With the GBP/AUD exchange rate currently sitting at 1.99, Australian Dollar sellers are at some of the best trading levels in the last six months. It was not long ago the GBP/AUD rate sat above 2.20, a gain of 20 cents is definitely not to be sniffed at. A trade for AUD 100,000 between now and the is more than £4000 difference.You could hang on for the chance of small gains at the risk the procrastination could prove costly.

If you have a currency requirement I will be more than happy to assist. I will look at your trade individually and not only guarantee the best rates of exchange against any competitor but also time your trade to maximize your return. We have various contact options which I can talk you through to help-your individual needs. I specialise in Commercial and Property transfers so pleased o get in touch if I can be of assistance. You can contact me at  dcj@currencies.co.uk. Thank you for reading my blog it is appreciated and I look forward to hearing from you.

A new month tomorrow brings a host of economic data to round off the week

Following a reasonably flat February we enter a new month tomorrow and with that we will have a flurry of economic data along with a speech by Theresa May which will round off the week.

Today those looking to buy foreign currency with Sterling or to bring foreign currency back into the Pound may wish to be wary of month end flows today, the final trading day of the month can lead to fairly large movements as traders, funds and financial institutions look to balance their portfolios as the month enters a close.

Tomorrow we see the start of economic data to show how the U.K performed throughout February as we have the release of Manufacturing data at 09:30am along with mortgage approvals figures at the same time. Analysts are expecting a slight drop off in manufacturing and a slight rise in mortgage approvals, so as long as these expectations are correct the two may cancel each other out.

Friday has the possibility of being a really volatile day, with U.K Construction figures starting the ball rolling at 09:30am, followed by 10:00am by a speech by the Governor of the Bank of England Mark Carney. Carney’s current stance still appears to be heading towards another interest rate hike for the U.K, possibly in May so should he hint at any change to this stance then Sterling may move quite rapidly off the back of this, I would expect investors and speculators to be hanging off of his every word.

Finally, to round off the week we have Prime Minister Theresa May due to deliver a speech to the U.K regarding Brexit. Markets will once again be looking for hints on any progress and the delivery of the speech will be key for Sterling’s performance as the week nears an end.

We have seen a minor lift recently for the Pound due to a heightened chance of a rate hike and the fact that Brexit talks both here and with the EU are seeming to go well, any confirmation of this by May would more than likely give the Pound a boost but any hint of negativity could lead to the Pound dropping off as the week nears a close.

If you are in the position that you need to exchange Sterling in the coming days or weeks then it is imperative that you make us aware of it, so that we can make you aware of any buying or selling opportunities that arise.

You can contact me (Daniel Wright) the creator of this site almost ten years ago by emailing me on djw@currencies.co.uk and I will be more than happy to speak with you personally to explain how I can help you achieve the best rates of exchange which could potentially save you thousands of pounds.

 

Sterling spikes against most majors – A good week for the Pound but will it continue?

Sterling spiked against all major currencies in trading yesterday afternoon, hitting the highest point since June 2017 against the Euro and offering those looking to buy foreign currency in the near future a fantastic opportunity.

The Pound has been on a slow rise this year and yesterday’s further boost shows once again that confidence in the U.K economy and indeed the Pound, is rising, but we do still need to be cautious that it would only take one bad piece of economic or Brexit news to stop it in its tracks.

For those who are regular followers of our website you will more than likely be aware that these spikes in the market do not seem to stick around for long – well they certainly haven’t since the EU Referendum anyway!

Sterling has remained fairly steady throughout the course of the trading day, if anything losing a little ground which is more than likely due to profit taking following the recent spike we have seen.

next week we have a lot of economic data out for the U.K including unemployment, average earnings, inflation and retail sales data all due out between Tuesday and Thursday. Depending on how good or bad this data is, Sterling may continue its charge or this could see the end of the spike we have seen recently.

I personally still feel that Sterling is undervalued against most major currencies and that there is plenty of room for the Pound to climb higher assuming there are no blips with brexit talks and the proposed interest rate hike still goes ahead in May.

If you have a large currency exchange to make involving buying foreign currency with the Pound or selling foreign currency back and buying Pounds then it is well worth you contacting me directly. You can get in touch with me by emailing me (Daniel Wright) directly on djw@currencies.co.uk and I will be more than happy to contact you personally to see how I can help you. We offer highly competitive exchange rates along with help on timing your transaction and would like to think our customer service is way above and beyond elsewhere. I look forward to speaking with you.

How will the pound perform in April?

Well what a difference a year makes. A year ago sterling was trading at a low of 1.16 and economists were lining up to explain a possible triple dip recession. Most of the UK was also enjoying a nice thick blanket of snow too!  Since then the pound has made a solid recovery and we are predicted one of the hottest summers in years, although just like forecasting currency movements, forecasting weather can be unreliable.

The advantage of forecasting currency however is market knowledge and understanding of what is actually driving exchange rates. 80% of currency transactions and therefore 80% of the reasoning behind currency movements is speculative. That is investors buying and selling foreign exchange to make a profit. Once you understand some of the key things they are looking for, you can begin to understand and forecast what may happen in the future.

This week there are a range of data releases which could affect sterling and also the currency pairs it trades against. One important thing to point out at this stage is interest rates. Interest rates affect currency in a similar way to the way a higher or lower interest rate affects a bank account. So as a central bank (the Bank of England, European Central Bank, Federal Reserve) seek to raise or lower their base interest rate investors (remember most currency movements are speculative) move money around according to where they feel it will offer the best return. To learn what will affect your transaction this month email me jmw@currencies.co.uk. This may be of interest for anyone buying or selling an overseas property, anyone who needs to move a large volume of currency and wants to get the best deal.

The UK is looking at raising interest rates well ahead of other leading economies which is an underlying reason why sterling is stronger against a range of currencies. Having been set at 0.5% for close to 5 years now there is an expectation interest rates will rise in 2015. As we are slowly coming out of this abnormal period of low interest rates (and it will be slow and gradual) we will start to see sterling exchange rates rise.

Getting the best exchange rate involves looking at the timescales that you have and assessing the market in that period. This website has directly assisted 1000’s of clients and is also read by many more who I am sure appreciate our expert opinion and knowledge. If you are considering a currency exchange buying or selling the pound understanding what is likely to happen on the market is the best way to maximise your return. We offer a personal proactive service to maximise your exchange rate through careful monitoring and analysis of the market and your unique position.

As we buy direct into the currency market we would never have real trouble undercutting other sources of currency such as and including currency brokers and banks. Making a comparison on a large volume of currency could potentially save you hundreds if not thousands of pounds. If you would like to learn more please contact me Jonathan on jmw@currencies.co.uk or please call 01494 787 478

Sterling Euro rates close to 3 month high (Tom Holian)

During the course of the week Sterling has been rising against the Euro and steadily against the US Dollar which has seen GBPEUR rates hit their best exchange rate in weeks.

The Brexit issue has continued to dominate exchange rates recently but with one of the Bank of England policy members claiming that the Brexit has not had the negative impact that was predicted this has helped the Pound to make gains vs all major currencies.

The government appears to have now got the power to trigger Article 50 but the final agreement will still need to be agreed before the negotiations will be allowed to take place.

Over the next few weeks the Pound is likely to be affected by the discussions and in my opinion it is unlikely that we’ll see any real significant gains for the Pound against either the Euro or the US Dollar.

However, as the government gets closer to getting its own way this could support the Pound as it provides the certainty going forward.

UK manufacturing and industrial production figures as well as GDP for the UK came out positively yesterday which helped support the Pound and the reason for such improvement is likely down to the Pound’s weakness recently and the realisation that the Brexit vote hasn’t caused the problems that some predicted.

If we look longer in to the future as the elections begin in Netherlands and France in March and April respectively I think we could see some problems ahead for the single currency as both countries are likely to demonstrate some political uncertainty during this period.

Indeed, there is a real voice for change in Netherlands so if they look at voting for a party in favour of a ‘Nexit’ this could see Euro weakness as it suggests further problems ahead for the Eurozone.

In summary I think long term we’ll see the Pound go up against the Euro but prior to Article 50 I think the Pound will remain under pressure.

If you are looking to buy or sell Euros and would like further information or for a free quote then contact me directly and I look forward to hearing from you. Having worked for one of the UK’s leading currency brokers since 2003 I am confident of being able to offer you bank beating exchange rates as well as helping with the timing of your transfer.

Tom Holian teh@currencies.co.uk

 

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