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European bank stress tests out tonight…. Watch this space!! (Daniel Wright)

By
Daniel Wright
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GBP USD Exchange Rate Bounces Off Yet Another Two-Year Low

Tonight we have a fairly important night for all banks in Europe as the latest banking stress tests are released.

What I find a little concerning is that the results of these stress tests are not being released until outside of trading hours at 9pm, this may be because this is when they are ready or more like that we may hear some fairly interesting news from them.

It is very rare that an economic data release from Europe comes out late on a Friday night and I feel that the reason they are doing this may be that they have some bad news to bring to the market and they do not want investors and speculators to react on it straight away.

By releasing data late at night on a Friday this gives ample time for statements to be released afterwards to settle the markets and two days for investors and speculators to calm down before the market sees large knee jerk reactions.

It is fairly common knowledge that banks in a number of areas are in quite a lot of trouble, most notably the Italian banks at present. Should the stress tests back this theory up then the Euro may find trouble and be down on Monday morning.

If you are in the position where you have a large Euro transaction to carry out then it may be prudent to keep an eye on the rates when the Asian markets open on Sunday night.

To be honest, these results may impact global attitude to risk so all major currencies may see volatility so it is key that you are on the ball and ready to react as your currency exchange may become thousands of Pounds cheaper or more expensive very quickly.

Here at Pound Sterling Forecast we do not only write up to date and important market information for you but we all work for one of the largest currency brokerages in the U.K so can also help you with your currency transfer. If you have a transaction to carry out involving buying or selling the Pound then feel free to get in touch with me (Daniel Wright) the owner and creator of this site and I will be more than happy to contact you personally to discuss your requirements. You can email me directly on [email protected] and I look forward to speaking with you.

 

GBP Forecast – Where Next for Sterling Exchange Rates? (Matthew Vassallo)

By
Matthew Vassallo
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Those clients with upcoming Sterling currency positions to execute, will be keeping a close eye on tomorrow’s UK Gross Domestic Product (GDP) figures.

With little economic data of note for the UK this week the markets will be focused on tomorrow’s key release, which could be key in shaping Sterling’s value as we head into the Easter break.

Investors have likely priced in the expected result of 0.4% growth, so any figure released outside of this remit will cause an increased market reaction, with additional volatility on Sterling exchange rates a likely result.

Sterling has gained plenty of support over the past week with a strong run of UK economic data helping to boost investor confidence, with the Pound benefiting as a result. Positive Unemployment figures, strong Retail Sales numbers and an indication from the Bank of England (BoE) that they may look to raise interest rates over the coming months, all helped to drive Stirling’s value higher against the majority of the major currencies.

This positive feeling was cemented as reports regarding a Brexit transitional deal surfaced. These reports were confirmed, with the UK & EUR all but agreeing the terms of the deal, which included access for the UK to the single market & customs union during the two year period.

It was for these reasons, rather than a drop in confidence in the EU, which was the catalyst for last week’s downturn in my opinion. Similarly it seems as though a sell of Sterling position has caused today’s realignment, with little Eurozone data of note to drive investor confidence in the single currency.

Looking at GBP/USD rates and the Pound has seemed to have gained a foothold above 1.40. Cable rates touched 1.42004 today and although the greenback found support around this level, the Pound can is still trading around 1.41 on the exchange.

Despite this recent upturn there are still many unanswered questions around Brexit and as such, I would be tempted to take advantage of the current spike and avoid another potential downturn.

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 winning 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 [email protected] to find out all the options available to you ahead of your currency transfer.

Sterling Hits Fresh Highs! Will the pound continue to rise this week?

By
Jonathan Watson
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GBPEUR Forecast – Internal Market Bill Drives GBP Lower

The pound has reached fresh highs against both the Euro and the US dollar in the last week, as weeks of general malaise and negativity for the pound seem to evaporate. The key question for many will be, is this going to continue?

GBPEUR levels have risen to three-week highs of 1.1582 in the last 24 hours, where we had seen a low of 1.1326 two weeks ago. The move on GBPUSD is more impressive, with the near 1.20 hit recently, the highest since August, a three-month high.

The pound was weaker as many of us will know because of many issues, most fundamentally the policies of the Liz Truss and Kwasi Kwarteng administration in the UK which led to markets rejecting the pound in protest.

Sterling had clawed its way back as the Bank of England made clear they would be there to manage inflation through higher interest rates, although the prospect of interest rates rising too sharply was also sterling negative, in creating uncertainty and fear over the damage interest rates being too high would cause to economic growth.

Looking to the last couple of weeks, Rishi Sunak and Jeremy Hunt’s plans seem to be much better received although there is still plenty of caution. Rather than everything suddenly being rosy, it is more that their more measured and careful approach to public finances has calmed markets, where the previous Prime Minister and Chancellor combination scarred them.

Looking to the reasons behind the rise for the pound, we can return to some of the earlier points in my post, namely the big rise for GBPUSD. The US dollar accounts for over 60% of globally traded foreign exchange, and where we see large movements and changes in sentiment on the US dollar itself, it can influence movements on other USD pairings, including GBPUSD, which can then influence that paired currency against other currencies, ie GBPEUR.

The pound has therefore risen against the Euro and other currencies in part because of a broad weakening of the US dollar, which has dragged the pound up against other currencies, leading to its rise against other currencies like the Euro.

In answer to the question will the pound keep rising, it may well do. But it can be argued the UK fundamentals are the same they were a week or so ago, when the pound was weaker. The UK is still likely headed for a deep recession, the Bank of England has predicted that this could last for much of 2023.

Yes, the pound has risen, and yes, this might well continue. But it should be noted that the move higher is not because all of a sudden markets are much more positive over the UK’s economic outlook, it is also to do with more global factors. The risk of a move lower is therefore very present, and a majority of the FX forecasts we had surveyed did predict this over the coming months.

Understanding fully the reasons behind movements in the FX markets can lead to better information and in principle better more informed decisions. We can provide guidance as to what is happening, and in combination with a range of tools and options, help ensure you can approach the FX markets and any payments you need to make, with more confidence.

To discuss any strategy relating to a currency exchange and what lies ahead next for the UK and the pound, please contact me directly on [email protected]

I have worked as an FX dealer for 13 years, and helped thousands of private individuals and businesses plan and mitigate their foreign exchange risk.

Busy day for the pound! Will sterling rise or fall?

By
Jonathan Watson
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Sterling is likely to really struggle in the current environment with lots of pressure over expectations the Bank of England will cut growth and inflation forecasts for the UK. There has been immense uncertainty surrounding the UK’s Brexit expected to be finalised in the coming months. The Bank of England is likely to discuss today the uncertainty relating to this event and this will in my opinion undoubtedly lead to GBP weakness. The EU Referendum is just another worry to lump on the back of the pound which has had one of its worst ever starts to a year.

Falling Inflation has removed any need for an interest rate hike and expectations for a hike which seemed so likely only a few months ago are now being price well into 2017. The main trigger for the pound to rise should be an interest rate rise or signs of an improving economy. With little sign of the right conditions arising for an interest rate rise I would expect the pound will really struggle in the coming weeks and months. From an investors point of view I think sterling is really likely to struggle to maintain composure in this market and today’s data is key to highlighting the extent to which uncertainty is rife.

For more information on the latest tends and themes to impact your exchange rate please speak to me Jonathan by emailing [email protected]. In my role as a foreign exchange specialist I am very confident I can offer you some useful facts and information to help you get a better deal.

Pound Sterling Forecast – The Week Ahead for Sterling Exchange Rates

By
Daniel Wright
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GBP EUR Could Head Lower After Growth Revisions

First and foremost it has been a tough start to the week in terms of economic data, which has led to a drop-off against most majors.

Growth figures for the month came out at 0.2% instead of the predicted 0.5%, Industrial and Manufacturing production figures also missed the mark, which again just adds more fuel to the fire that a long and challenging recession is fast approaching for the U.K.

Our condolences to the Royal family after the terrible news that Her Majesty had passed on Thursday of last week, I personally popped to Buckingham palace after a day at the test match on Saturday to pay my respects and the atmosphere there was really something to take in, what a fantastic lady and a real inspiration on how to conduct yourself through both good times and bad.

It is important to note from a currency perspective, that there are a few changes that readers should be aware of, first and foremost we will have a Bank Holiday in the UK on Monday 19th September for the funeral, and secondly, the Bank of England have now postponed their interest rate decision, so it will take place on Thursday 22nd July as opposed to this coming Thursday.

Economic data this week

Even with the BOE moving the interest rate decision we still have plenty of important data out this week, starting with unemployment and average earnings figures tomorrow morning.

Unemployment is expected to remain at 3.8%, however, should this data also miss the mark it could cause another testing start to the day for the pound.

For those with an interest in the Dollar, we have US inflation figures out tomorrow afternoon which may impact the Federal Reserve’s next move on interest rates.

Wednesday is an important day for inflation in the UK, with all inflation figures coming out first thing in the morning. The sheer level of inflation is having much wider implications on the U.K economy and is also being pushed up by the weakness of the pound.

Expectations are for a small rise but anything different from that not only could impact how the Bank of England acts next week but could also cause an extremely volatile morning for Sterling exchange rates.

The BOE is currently expected to progress with a 75 basis point hike at next Thursday’s meeting, anything to firm that up more or to potentially alter expectations will move the pound accordingly.

Thursday is now a little quieter with the BOE decision being moved, we have US retail sales in the afternoon for those following the Dollar.

Rounding off the week we have UK Retail Sales on Friday, with energy prices rising and the general cost of living being such a big problem in the U.K it is unlikely consumers have been out spending too much so expectations are for another drop-off in Retail Sales which might give the pound a poor end to the week.

If you have a pending currency exchange to carry out and you would like to speak to one of our traders about upcoming news that may impact the cost of your transaction, feel free to email me (Daniel Wright) directly at [email protected] or click here to make an enquiry on our website and we will be in touch with you shortly.

How do I protect my currency position over QE

By
Daniel Wright
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Pound Sterling Forecasts are rather changeable at the moment all in the build-up to tomorrow events, plus the movement expected over the weekend with the Greek election.  Remember that markets will move on rumour as well as fact so the change in order numbers for currency are also impacting costs.  Today we have seen traders put in their positions and we have seen GBPEUR rates drop by nearly ½ a cent. This could be the poor Unemployment figures for the UK which were released earlier but could also be traders hedging their bets before the release tomorrow. In either case if you have exposure to the GBPEUR rates in the next 7 days you NEED to be putting a protective net over the market. This is through LIMIT ORDERS and STOP LOSS ORDERS. These put in automatic buy orders below and above the current trade price, therefore protecting you from any move outside of these levels. It is a tool that most business users utilise all the time on large volumes over small events but are equally valuable on small figures on large events. What I am saying is that these are available to most through ourselves here so feel free to use them for Free to protect your currency exposure.

Contact myself, Steve Eakins, via email if you would like more information about it through [email protected] for a personal response.

Sterling data set to improve? (Steve Eakins)

By
Daniel Wright
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Yesterday there were 15 economic reports released for the UK and most came out as expected, resulting in little movement for the strength of sterling in early trading.

There was a surprise improvement from the Retail sector which has increased forecasts for the Retail Figures which are released on Thursday at 9:30 (Retail equates to over 60% of the GDP for the UK). Pound sellers may wish to wait for this release as it may provide a better picture.

Longer term I agree with most financial analysts that there is a real risk of a Triple Dip Recession in the UK. Only yesterday we saw another retailer, HMV fail, which follows Jessops
making a total of nearly 6,000 people unemployed this year already. Put this with sluggish industrial performance, shrinking manufacturing and I really struggle to see anything better than near zero growth in 2013.

Here we provide a pro-active service helping people time transfers while being their eyes and ears in the market to secure high prices. ALL while giving our clients access to award winning exchange rates.  If you need to move money, make your New Year resolution to check you are getting the best deal.  Contact us today for a comparison or to register your
interest for market updates – [email protected] – PLUS we can provide a pro-active personal strategy with bearing on the trade you need to make, the availability of funds and when the purchased funds are needed.  Want more information? Please just ask.

GBP forecast for the coming week or so – strength or weakness?

By
Daniel Wright
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Global Shares fall most notably the banks

The FTSE fell by the highest amount in 12 years yesterday, bank shares and indeed many others tumbled worldwide as investors continued to seem worried about the current worldwide situation. In cases like this you tend to see investors head for a ‘safe haven’. Currently gold (priced in Dollars) and the Swiss Franc are favourites, and both gained further ground yesterday. Interestingly, the Pound had a fairly good day too against the Euro and many other majors, it appears although the best of a bad bunch, heads are turning towards the pound leading to spikes in the market on days such as yesterday, I’m sure it will only take a few poor data releases for investors to shy away again, so in the current market taking advantage of a spike is key.

Overview and forecast for Sterling against the majors

With a reasonably quiet day ahead on the data front I thought I would give you a brief update on what is going on in the volatile markets and what we may see ahead.

GBP/EUR – The Sterling-Euro pairing has been relatively range bound of late, however this doesn’t mean this will be the case going forward. There are just so many factors affecting both sides at the moment that it is hard to know just where we will be in a few weeks time let alone the next hours trading. It appears that the ECB are willing to throw everything inclusive of the kitchen sink into helping the Euro survive and stay strong, whilst the BOE are in no rush to be raising interest rates for quite some time, Barclays in fact changed their rate hike expectations to August 2012 yesterday. In short, I don’t expect major movements for this pairing however there will no doubt be some great buying and selling opportunities in the coming weeks. In order to ensure you are in the best possible position you should make us aware of your requirements on 01494 787 462 so we can explain the various options available to you inclusive of limit and stop orders.

GBP/USD – The Pound came close to TWO YEAR HIGHS against the Dollar this week following some hawkish dissent from one of the Federal Reserve policy makers on Wednesday. He had mentioned that he felt the U.S would have to raise rates before mid 2013 and that growth forecasts should not be as high as they are. This led to a short term spike on Wednesday afternoon and a great chance for clients with an open trading facility with us to lock in to a fantastic level of exchange. America isn’t in great shape but as the saying goes when the U.S sneezes the U.K catches a cold so be aware we could have just as many problems around the corner too.

GBP/AUD/NZD/ZAR – The pound has seen great gains against all three of these more volatile currencies, as the risk appetite for investor’s decreases and they seek to unwind carry trades. Carry trades are where an investor borrows money in a currency with a very low interest rate (GBP,JPY) and shifts the funds to a currency with a very high interest rate (AUD,NZD,ZAR) making their return on the interest differential. When we see the unwinding of carry trades, you can see a snowball effect like we did in the past two weeks and very large movements over a period of days. Sterling is around 10 cents better now against the AUD and NZD and also roughly 7% better against ZAR than a few weeks back.. That is £14,000 difference on a £200,000 purchase!!

Once again this highlights the importance of letting us know your intentions, we can watch the markets for you and highlight movements like this meaning you do not need to have your own eye on these volatile markets all the time as I’m sure you have plenty to do all day yourself. make an enquiry  today and one of our friendly and experienced brokers will call you bac, more than likely me personally.

GBP/CHF – Without a doubt the most volatile currency against the Pound on the markets at present… I have many clients who have Swiss Franc mortgages and are finding each month increasingly harder as payments soar alongside the Swiss Franc. The last week or so has been a little better for you with the Swiss national Bank stepping in to devalue the currency however be aware this may not last too long… this is why. The Swiss lost CHF21 Billion last year trying to devalue their currency, and cannot afford to keep on throwing money down the drain like this, there comes a point where they have to realize that the only thing to save the Francs increasing strength is a better risk environment and investors being more prepared to take on riskier propositions. We should still see increasingly volatile movements as the ongoing attempt to devalue continues, and the momentum of the CHF keeps pushing it back.

Public sector net borrowing today

This morning sees the release of Net Borrowing figures in the U.K and this can indeed be a key release. It essentially confirms exactly how much new debt is held by the Government and predictions can be quite a way out. This morning expectations are for £0.2Billion compared to £11Billion last month, a lower figure may be seen as positive for the pound and a higher one negative, it would not surprise me to see slightly higher than expected and the Pound to lose a little ground in early morning trading so it may be prudent to contact me on [email protected]  first thing if you have an upcoming transaction to carry out.

If you have any questions or queries regarding anything in this report then please do feel free to email me [email protected] or call 01494 787462 

 

Why has the Pound begun to improve against the Euro this week?

By
Tom Holian
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Major economic data releases helping the Pound, and causing disruption for other major currencies

This week we have seen the Pound benefit from several economic data releases, surprising the market with more positive than expected readings, as well as some weaker data coming out of the European bloc.

The Purchasing Manager’s Index reading, which is a great indicator of the UK services sector’s economic position, posted above 50 to signal that this sector is now expanding in the latest month, as well as the manufacturing and composite sectors releasing positive data too.

The GBPEUR rate now sits at 1.135 at time of writing, reaching 1.1382 at the highest point and 1.8cents higher than the lows of the week, and GBPUSD up from 1.192 to 1.213.

The Bank of England had previously almost guaranteed a UK recession for 2023 but, couple these releases with the positive Retail Sales figures from the previous week, that stance may begin to change in the weeks to come.

As mentioned above, we have seen the Euro lose ground this week against major currencies, losing nearly 2 cents on the Pound and just over 1 to the greenback, bringing the EURUSD rate to 1.059 at time of writing.

After the Consumer Price Index released displaying that inflation was decreasing at a quicker than expected pace, there were doubts within the market that the European Central Bank could keep up with its bullish stance in terms of its monetary policy, previously signalling another 50 basis point hike at the next meeting in March.

This week’s release of services data might support those doubts as the Manufacturing PMI data released lower than expected at 48.5, and this reading gives us an indication of the overall economic condition of the bloc as the manufacturing sector takes up the majority of the Gross Domestic Product reading.

The next monetary policy meeting for the ECB will take place on the 16th March and any announcements from officials along the way will give us a better idea of what to expect moving forward.

US Dollar News

The US Dollar has also benefitted from recent surprise reading in economic data releases, which has caused a slight U-turn on expectation of their monetary policy.

The expectation was for the Federal Reserve to slow down interest rate hikes in the coming months as inflation continues to slide, and start to cut them by the end of the year.

Recently, we have seen the inflation slowing at much slower pace than expected, recently release was 0.2% higher than the expected reading, as well as the Non-farm payrolls/labour data displaying 330,000 more new jobs than the market priced in for.

This week saw positive PMI releases across the board to support this further, so could we see the Fed change their stance at their next monetary policy the week after the ECB have doubts over their decision?

If you would like a free quote when buying currency compared to using your own bank then contact me directly and I look forward to hearing from you.

Tom Holian [email protected]

How Far Can Sterling Go – Will the Pound Continue on it’s Upwards Trend? (Matthew Vassallo)

By
Matthew Vassallo
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The Pound has gone from strength to strength over the past 10 days, with significant gains most of the major currencies.

GBP/EUR is now putting pressure on 1.18, gaining almost five cents since Theresa May’s Brexit speech last week. This positive move was cemented following Tuesday’s supreme Court ruling, which means Article 50 cannot be triggered until the decision has been ratified by Parliament.

This result had been priced into the market and was viewed as a positive for the UK economy by investors, due to the fact it may lead to a softer Brexit stance than many had envisaged.

Personally, I still do not think that there is enough information to hand to make a firm decision either way and whilst the Pound has certainly gained a foothold, there are still many unanswered questions. Until Article 50 has been approved and we have clearer picture of how we will actually facilitate our exit from the EU, investors are likely to remain sceptical.

For example what trade deals will be negotiated once we have exited the single market? What immigration rights will skilled workers have? What real plan is in place to drive the UK economy forward?

It may well be that the government have answers to these questions but words alone will not be enough to help the Pound recover to pre Brexit highs and I still feel that sustainable Sterling strength is unlikely under the current market conditions.

I do feel that there are many economic and political issues inside the Eurozone that will manifest themselves as we move through 2017 and this in turn could inadvertently boost Sterling’s value, but for the time being I do not envisage GBP/EUR rates breaching 1.20 whilst market conditions remain as they are.

Looking at GBP/USD rates and the Pound has also found support, helping boost the pair back above 1.26. Considering the greenback was putting pressure on 1.20 only a couple of weeks ago, this is an extremely advantageous position for those clients holding GBP.

The improvement seen over the past 10 days would equate to an extra $5000 on a £100,000 GBP/USD currency exchange and with the markets seemingly reacting well to the new President’s economic plans, we may see the USD recover some of this ground over the coming weeks.

Looking at key economic data this week and this morning’s UK Gross Domestic Product (GDP) figures will hold weight for investors and any figure outside of the expected 0.5% growth is likely to cause additional volatility on Sterling exchange rates.

Personally, I would not be gambling on what is still a fragile UK economy and with so many unanswered questions remaining regarding our future economic outlook following Brexit, I would be following the current spike very closely. Any slowdown could be the trigger for those clients holding Sterling to move, as I do not feel this spike will continue on the same upwards aggressive trend for long.

If you have an upcoming currency transfer to make and are concerned about the current market instability, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact us on 0044 1494 725 353 and ask one of the team for Matt.

Alternatively, I can be emailed directly on [email protected] and can answer any queries you have about the current market trends & forecasts.

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