Sterling exchange rates drop once again as hopes of a ‘soft brexit’ fade, so where will the Pound go from here? (Joseph Wright)

The Pound is facing increasing pressure at the moment as the impact of the UK’s upcoming exit from the EU is unsettling financial markets.

Sterling exchange rates dropped substantially as soon as it was announced that the UK electorate had voted to leave the EU, with the GBP to USD exchange rate dropping to a 31 year low, and the GBP to EUR exchange rate dropping to a 3 year low along with many other major currency pairs.

There was a slight rebound as a number of particularly positive business surveys within key UK industries showed that a weaker Pound had actually boosted economic output within the UK in it’s new post-brexit-vote environment. That rebound has now been reversed as we edge closer to those 52 week lows, and I think it’s worth noting that cable (GBP/USD) has now dropped back below the key psychological level of 1.30 which may trigger further falls for the pair.

Now that it’s common knowledge that UK Prime Minister Theresa May will likely invoke Article 50 towards the beginning of next year, hopes of a prolonged ‘soft exit’ have dwindled and this is being reflected within currency markets as the Pound weakens pretty much on a daily basis at the moment.

Those with an upcoming currency exchange requirement which involves converting pounds into another major currency, may wish to consider moving on that sooner rather than later as many economists have predicted parity for GBP/EUR, our clients are still comfortably in excess of 10 cents from this level so moving now may be a wise decision come later in the year/next year.

Today’s major news release will be the most recent Fed Reserve Bank Interest Rate decision, and although no change is expected a move by the Fed is likely to create volatile trading conditions which we would usually trade around with our clients, as sensitive news releases such as this one can widen exchange rates and our sole purpose is to obtain great rates for our clients.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on [email protected] and I will be more than happy to contact you personally to discuss the various options we have available to you.

What can you expect this weekend with the Greek elections? Personally I feel we may not see the volatility many expect now – But we may well do in the coming weeks! Greek election effect on the currency market

I have had hundreds of calls from my regular clients in the past few weeks in panic about the pending elections and quite frankly this is unprecedented therefor it is extremely hard to know just what state or position the currency market will be in following the weekend elections.

Any of the following may happen:

The Anti Austerity party win, the Euro weakens as it suggests Greece may leave the Euro and the Dollar gains strength. Riskier currencies such as AUD, NZD and ZAR lose strength as global economic concerns are high.

The Anti austerity party win, the Euro strengthens as it is seen as one of the bad parts of the apple that may be due to be cut out. The Dollar weaknes and the riskier currencies strengthen.

The Pro austerity party wins the Euro strengthens the Dollar weakens and riskier currencies gain strength as it would suggest Greece may be willing to carry on with their austerity measures and although potentially this could easily change a little further down the line it may look like Greece will stay in the Euro for the time being.

Either side wins, the markets are a little jumpy but we don’t see any major movements – personally I think this is the most likely, the key for me will be what we actually see come out in the days following the elections… What comments are made and which actions are put in place, this will be the real bread and butter information for investors and this will be the key to where the markets may head in my opinion.

Of course anything can happen so do not take my work for it. and there is no doubt we are about to engage in one very rocky ride, I hope whichever way you need the currency markets to move for you they head in the right direction and I will try and come back to you all with updates throughout Sunday evening.. I am however away for the weekend so no promises!

If you have a currency transaction to carry out next week or in the next few months or carry out regular transfers and you want to have an experienced currency broker on your side then I can help you both in terms of getting you the best rate of exchange when you do carry out your transfer alongside helping you make the decision as to when to book out a rate of exchange which may save you a huge amount of money too. Email me directly [email protected] with a brief description of what you need to do and a contact number and I shall be happy to get in touch with you personally.

 

Pound Sterling exchange rates steady ahead of key interest rate decisions due out tomorrow

GBP EUR Exchange Rate: The Week Ahead August 15th

Sterling exchange rates have remained reasonably steady in trading today as we await a number of key economic data releases towards the end of this week.

The one big mover was once again against the Australian Dollar where once again we saw comments overnight from the RBA (Reserve bank of Australia) that the strong Australian Dollar was still a problem for the Australian economy opening the door for some type of weakening in the coming months. markets do move on speculation as well as fact and this led to the GBP-AUD rate going over 1.80 for the first time in two and a half years.

Tomorrow we have the interest rate decisions from both the U.K and Eurozone and although no major rate movements are expected, any comments from the BOE (Bank of England) or ECB ( European Central bank will be jumped on immediately which may lead to a volatile Sterling Euro rate in trading tomorrow.

The main market mover will be the press conference at 13:30pm from the European Central bank assuming no surprises crop up in the earlier rate decisions.

Investors hang off of every word that comes out of Head of the European Central Bank’s mouth so if you have a pending currency transfer to carry out involving wither buying or selling the Euro it may be prudent to keep a very close eye on exchange rates at that point.

If you are looking to exchange foreign currency in the near future involving either buying or selling the Pound against any major currency then it is well worth getting in touch with me directly. Not only can I keep you up to date with the very latest market movements but when it comes to buying your currency I can also help you get the very best rate of exchange.

You can email me (Daniel Wright) directly on  [email protected] and I will be more than happy to get in touch personally.

Sterling on the front foot following UK inflation data

Sterling on the front foot following UK inflation data

Sterling is back on the front foot against the euro and dollar following yesterdays release of inflation data. The pound is trading within 0.5% of the 11-month for GBPEUR making it an opportune time for euro buyers. Cable rates (GBPUSD) have risen from the 6-week low seen on Monday and pairing is trading comfortably above the 1.27 handle at the time of writing.

Yesterday’s data confirmed core inflation remains sticky coming out at 6.9% vs expectations of 6.8%. Core inflation excludes volatile products such as food and energy and is seen as the more important reading when the Bank of England considers the impact of rising prices.

UK interest rates currently sit at 5.25% and have been rising since December 2021 when they sat at 0.1%. Sticky core inflation suggests that they will have to continue rising for the time being to bring inflation close to the BoE’s target level of 2%.

The future interest rate expectations are buoying the pounds value at the moment; however, the economy could be squeezed if interest rates stay higher for longer in the UK.

Household disposable income is likely to reduce as mortgage holders re-mortgage and rent prices rise as landlords re-mortgage at higher rates and pass on the cost increases to their tenants.

Retail sales data released tomorrow will be a key reading for the BoE and sterling exchange rates. A sharp drop-off in sales could signal that interest rates are having a negative effect on the economy and could concern the Bank. A positive reading could fuel sterling further.

Please reach out to us below for market analysis on your upcoming exchange.

GBPEUR rates highest since January 2013 (Tom Holian)

GBP EUR Exchange Rate: Weekly Review July 16  
Tom Holian
Tom Holian

Following the release of this morning’s UK Claimant Count which showed UK unemployment is now at 7.1% this has sent Sterling Euro rates to their highest level since January 2013. Coupled with the release last week of UK Retail Sales which were the highest since 2004 optimism is now surrounding the British economy.

Indeed, with the Bank of England having commented previously that UK interest rates are unlikely to be changed until we see unemployment lower than 7% this could see an interest rate rise needed sooner than first predicted.

The previous prediction for putting up interest rates according to a recent BBC poll was for no earlier than 2015 but personally I’ve felt a predicted on previous posts that I think we’ll see an interest rate rise before the end of 2014.

The news this morning also sent GBPUSD rates to their highest level in three weeks breaking through 1.65 on the mid-market level. The Bank of England minutes which were also published this morning showed a 9-0 vote against raising rates.

With inflation having hit the government target of 2%, UK house prices rising and unemployment falling this is all leading to Sterling’s strength. However, do be cautious as if GBPEUR exchange rates continue to rise at their current trend this could have a negative effect on the UK economy which is heavily reliant on its export market. This time last year when GBPEUR rates were similar we saw a big fall within a matter of weeks. the move was as much as 8 cents or the difference of £5,600 on a currency transfer of €100,000.

If you are worried about exchange rates and want to save money compared to using a bank then contact me directly Tom Holian [email protected]

When is the Supreme Court case in the UK and how will this affect the pound?

GBP EUR Exchange Rate: Weekly Review July 16  

The pending UK Supreme Court case in the UK is critical to the short term movements on sterling exchange rates and clients with a requirement to buy or sell the pound should be making plans around this. Expectations for the initial reaction to the decision are reasonably clear but once the decision is made we will then be faced with a whole new set of questions over the next direction for the Brexit vote. Markets have loosely priced in the expectation the previous decision will be upheld but there are no guarantees!

If the previous decision is upheld then the pound should rise. GBPEUR could hit 1.17-1.18, GBPUSD upper end would be 1.25, GBPAUD 1.70 and GBPNZD towards 1.80. The pound could easily fall up to 4% if the court case does not go the way markets have been predicting. There is a very strong chance we could be looking at rates on GBPEUR retesting 1.10-1.12 territory whilst on GBPUSD we could slip below 1.20. GBPAUD may drop below 1.60 and GBPNZD below 1.70.

The biggest problem is knowing when this case will be decided. With the Supreme Court reopening tomorrow from their recess period the news could come as early as tomorrow. I expect it will be between tomorrow and next week which gives clients looking to buy or sell sterling a small window of opportunity to plan in.

In order to maximise such an opportunity the best strategy in such a market is number one to be prepared and number two to understand your options. My order book is currently very high with ‘Limit’ and ‘Stop / Loss’ orders. A ‘Limit’ order allows you trade at a higher level whilst a ‘Stop / Loss’ order allows you to protect your rate should the market fall. In such an uncertain and potentially volatile market I feel the best way forward is to use a combination of the above tools to help limit your exposure and trade on any improvements.

If you have a transaction to consider and wish for some assistance with the timing and planning of any exchanges please feel free to contact me Jonathan by emailing [email protected] with an overview of your position and preferably a phone number so I can quickly contact you.

Thank you for reading this post and I look forward to answering any questions on the markets or the services we can provide.

Jonathan Watson

 

GBPEUR rates – 1 week from the BREXIT vote

Sterling exchange rates have started to climb once more but is this a short term lift up?

With all the talk and debates plus the political fall out and economic concerns Sterling rates have been falling over the last week, but one week on the FTSE is actually higher than it was before the LEAVE result. Currency markets have unfortunately not shown the same gains but are higher than the bottom levels seen at the beginning of the week. GBPEUR levels are now over 1.21 a cent higher than yesterday morning when there was a real threat of markets falling under 1.20.

The BREXIT doom and gloom has been strong out there but please remember that these rates are actually a lot higher than many had expected. Some banks suggest parity on a leave which is a distant from where market levels sit this morning.  In fact the average rate seen over the last decade is only 4 cents higher than where we stand now, not bad considering the talk of the UK falling apart and the EU concept under stress.

The British divide

As the ramifications of the LEAVE result starts to take shape it seems clear that some parts of the UK are wanting to remain as part of the EU. Northern Ireland, Scotland and Gibraltar have already made their claim.; All had rather large REMAIN results from the vote only 1 week ago so perhaps this is no surprise.  If this story develops watch out for significant fluctuations on the currency market as the Pound takes a dive. I can certainty see these questions lasting a while as the uncertainty remains. Make sure to contact us here if you would like more information, with over 17 years’ service we have helped clients through many major events like this. In each occasion helping them save money, simply put if that was not the case we would not be in business. Contact myself STEVE EAKINS at [email protected] if you would like more information.

Why are rates so high?

Well the concerns stand around contagion and the risk of further right wing parties across Europe taking hold. Plus the fact that UK is the third largest contributor to the EU raise concerns about what the EU could look like without the UK being part of it.  These questions are rather large and the implications on the currency market could equally be as big.  Answers to these questions however are probably at least 6 months away as the UK decide political leadership, then issue the Article 50 which starts the ball rolling on the negotiations of the leave and therefore what Europe will look like thereafter.

Lots of questions remain about what the future will hold but it is incredibly unlikely that these will be answered within the next 3 months.  Therefore rates are expected to remain under threat with GBPEUR rates especially volatile. If you are buying a house in Europe a boat or indeed emigrating these events are unlikely to impact the rate of exchange you achieve if moving within the next three months.

If you would like more information please feel free to contact myself STEVE EAKINS – email me at [email protected]

 

Sterling exchange rates flat as the week begins – Bank stress tests and Carney to speak tomorrow (Daniel Wright)

Pound to Euro Exchange Rate: Hammond Criticizes ‘Extravagant’ Spending

The Pound has had a fairly flat day to start off the trading week, seeing minimal movement against most major currencies.

Generally at the end of a calendar month you do tend to find that economic data does quieten down, however that is not to say that we are set for the rest of the week to remain flat.

The major issue as many regular readers will be aware is the on going Brexit talks. As it stands the talks are not exactly going smoothly and there are a number of obstacles that we still need to overcome just to get things started, the longer we struggle to get things moving in a positive direction the more Sterling will struggle to make gains.

Tomorrow morning does bring a few interesting and important releases for the U.K and indeed Sterling exchange rates, and we may be in for a much more volatile day of trading because of this.

At 8am we have the release of banking stress tests along with the financial stability report for the U.K. The bank stress tests will focus on a number of key areas that involve risk, such as credit risk, market risk and liquidity risk and will essentially give an overall summary of the financial health of each bank should there be a financial crisis situation.

Terms of banks have been tightened up in recent years, so you would hope that the results will not be too bad, however be poised that if there are negative results tomorrow morning the Pound may struggle.

The Financial Stability report, also released at 8am is published twice a year by the Bank of England and this equally will give an assessment of the outlook for stability and resilience of the financial sector at the time or preparing the report. A negative outlook may also bring Sterling weakness and a glowing report Sterling strength.

Later in the morning Bank of England Governor Mark Carney speaks at 08:30am and he will give an overview of the results and any plans to combat problems that have arisen from the results.

The rest of the day is fairly quiet for Sterling exchange rates so this may set the scene for the rest of the trading day, so if you have a large currency exchange to carry out then you may need to get up early just in case there is an opportunity that arises.

If you are in the position that you need to carry out a currency exchange in the coming days, weeks or months and you would like assistance then you are more than welcome to contact us here directly and we can help you. We do not only offer up to date market information but all writers on this site also work for one of the largest currency brokerages in the U.K, having been in operation for almost 18 years now.

We are confident that we cannot only get you a better rate than your bank or current choice of broker, but we can also offer you a better, more personalised level of service too.

If this is of interest then feel free to contact me (Daniel Wright) by emailing [email protected] or by calling our trading floor on 01494 725353 and asking for me (Daniel Wright) personally and I will be happy to speak with you.

 

Exchange Rate Forecast – GBP USD EUR – When to BUY or SELL? ( Andrew Bromley )

GBP EUR Exchange Rate: Weekly Review July 16  

US Retail Sales dominated the currency market movements today, coming in again lower than expected. Generally speaking the rates have been poor for the entirety of 2015, as bad weather on the East Coast hampered shoppers desire to head downtown to Macey’s!  The general overview for the Dollar is in line with the Interest Rate outlook. We may get further indication tomorrow at 7pm when the Federal Reserve releases its ‘Beige Book’. The Beige Book is a collection of essentially market sentiment from all Fed members, with some being a lot more ‘bullish’ (positive) than others. The key to the recent USD strength is on the back of Fed member ‘Lacker’s’ comments, as he feels that the economy could support an Interest Rate increase in June / July. I wouldn’t be surprised to see either another Fed member, or the Fed Chair Janet Yellen make a statement to the contrary. This could push GBP USD exchange rates up to the 1.49s – what I feel is the top of the current trading range. I feel that the next key limit for GBP-USD is 1.45 which is achievable with further positive market commentary.

On the other side of the Atlantic, Sterling holders are selling their positions quickly as the impending UK General Election will bring weakness. The overwhelming expectation is for Pound weakness as realistically we will see a ‘hung parliament’. This situation of no majority government is bad news for the UK with the pound likely to suffer. If I were buying a currency with Sterling I’d be moving sooner rather than later!

The Eurozone are STILL trying to sort out the Greek debt, with the proposal now for an amendment to the bailout. The Greek government are looking to repay the IMF (International Monetary Fund) loans as they are expensive, and then renegotiate the loans from the Eurozone. The Eurozone loans are at high rates of exchange as they were agreed at a period of more prosperity. Bringing the interest rates in line could provide a monumental cut to payments. Greece is the key factor for the Euro staying so weak – realistically EUR should have moved back closer to 1.30 as the UK goes in to Election mode. It is worth also paying attention to any announcements from the Swiss. In January we saw the largest peacetime currency move (for Major currencies), when the CHF-EUR trading peg was abolished. The Swiss National Bank have hinted at yet further change to policy – Euro sellers should pay particular note!!

If you have an exchange requirement, please feel free to get in touch. I can assist you in achieving award winning exchange rates, but also making available facilities to ‘forward buy’ your currency. For just a small deposit you can secure your entire exchange, helping large currency exchanges (e.g. house purchase) much easier to budget.

Andrew Bromley

[email protected]

01494 787 478

 

Euro Rises Ahead of Potential Deal Over Greek Funding (Matthew Vassallo)

“With Greece in line for further monetary assistance many will be feeling an unnerving case of déjà vu”

The euro strengthened during yesterday’s trading amid rumours that Greece will receive further funding, to meet its repayment targets. These targets were set by the International Monetary Fund (IMF) and were seen as a key to Greece’s long-term standing within the eurozone. Many will ask why so much weight is put on Greece’s stature within this circle and surely the money spent on its seemingly fruitless efforts of recovery could be better spent elsewhere?

The answer is because the precedent set by allowing Greece to default on their debt, made worse by the impossibility of combining ever harsher austerity measures with economic growth, is still very much an unknown and the knock on effect it may have on other peripheral nations could be catastrophic. There has been so much talk by European Central Bank president Mario Draghi and other key eurozone leaders about how they will not allow Greece to fail, that any decision that now goes against this could be political
suicide for those involved.

The EUR strengthened by over half a cent against GBP during Monday’s trading and was starting to put pressure on the 1.24 level. Any decision to extend Greece’s funding could be met by differences of opinion on how much they should receive. The IMF is believed to be reluctant to extend Greece’s debt programme by much, if any at all, whilst eurozone leaders, in general, feel Greece need to be given what is needed, to pull them back into line.

UK Business Secretary Vince Cable stated that UK businesses are showing ‘reassuring’ signs of recovery and that there is clearly a ‘more upbeat mood’ amongst the business community. This bold statement follows a mixed set of economic data for the UK of late, with poor Service Sector, Construction and Manufacturing figures dampening the mood, despite the positive Gross Domestic
Product (GDP) figures that recently pulled the UK out of recession.

Key to this week could be tomorrow’s Bank of England minutes, which will indicate how many members, if any, felt another round of Quantitative Easing was necessary or likely to be needed over the coming months. Any sign that we will see further QE could see the Pound lose market value.

The USD has shown signs of recovery of late, particularly against GBP. The greenback has found life tough going against the Pound for much of the summer, so its move back below 1.60 will certainly be seen as a positive by investors as we head into the last
weeks of 2012.

I feel a move a move towards 1.55 over the coming months is the most likely scenario, as the US moves forward from the elections with new hope.

The Pound has rebounded somewhat against the AUD over the past week, with levels in the mid 1.53’s ahead of last night’s RBA minutes. Much of the focus of these minutes was on whether the RBA will cut interest rates further in December and the chance was greatly increased after the minutes indicated further room for monetary easing.

Here at FCD we have various contract types all tailored specifically towards our client’s needs, so for more information please contact me directly at [email protected] or call us today on 0044 1494 787 478 or visit and sign up to  your free, no obligation trading account.

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