Sterling Euro Dollar Forecast – The week ahead

This daily report focuses on key current considerations affecting the foreign currency markets, and how this may vary exchange rates which can have a big impact on the overall cost when you purchase currency and are sending money overseas.

• Dollar remains positive
• Possible strong Euro finish in March
• Creation of a European Monetary Fund gains support

What Are The Prospects For The Euro

Greece has been threatening to play its trump card by asking for assistance from the International Monetary Fund. This would at worst call into question the whole economic foundation of the EU and at least be seen as highly embarrassing for the EU as it as unable to resolve the situation internally. 

This elicited a series of supportive statements from France and Germany last week which caused a Euro rally which is unlikely to be undermined by the ZEW Current Situation survey (which gives an indication of German investor sentiment on Wednesday). 

The actual form this support will take remains vague however discussions have started regarding the formation of EMF (not the 1980’s band pictured here but instead a European Monetary Fund (a European version of the IMF the international lender of last resort) whilst this will be too late to help Greece now it indicates a recognition of the considerable strengthening of European ties required to rebuild sustainability in the Eurozone.

This will be a complex process but the willingness now to tackle it will provide increased long term strength to Euro value further challenging the pound and maybe challenging the US dollar as a world currency in 2011.  Today’s Eurozone employment change figures may stimulate an exchange rate spike if the forecast -0.5% fails to materialise.

Dollars Remains Positive

Wednesdays US interest rate decision is unlikely to increase interest rates but the dollar continued its inexorable rise on the back of US job figures which may indicate that the recovery in the US may be sustained and with Friday’s growth in retail sales from an anticipated 0.1% to an actual 0.3% the number of positive indicators are growing for the US.

Strong US results are creating demand for goods with Japan and China who are using an undervalued yen and renminbi to supply it with imported goods much to US annoyance. 

Resource rich economies like Australia are noticing increased demand for their raw materials, many of which are priced in US dollars and on the back of this demand their economy is growing and their currency is strengthening.
 
One life line that may be provided to sterling may be the housing market, a surge in demand could pull the UK economy back on track by stimulating spending however this morning’s Right Move House Price Index, based on a sample of residential property, came in below expectations at 0.1% for March

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the contact form and I will be in touch with you shortly.

Have a great day and thanks for reading!

Daniel Wright

Sterling stable in morning trading

The Pound has remained reasonably stable in early morning trading today and on a relatively thin day of data for the U.K exchange rates for the Pound against a basket of major currencies will be reliant on their data releases.

These are namely Industrial production for the Euro Zone at 10:00am and retail sales plus unemployment data for the U.S and Canada in the afternoon.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the contact form and I will be in touch with you shortly.

Pound Outlook

Sterling exchange rates have taken a hit over the course of the UK trading session weakening against all major currencies. It seems that the uncertainty about the general election and the possibility of a  hung parliament outcome is not helping the UK exchange rates at present.

It seems that the longer it takes for Gordon Brown to call the general election the longer it will be before the Pound starts to strengthen again. If we do end up with a hung parliament then it may be well into 2011 before sterling exchange rates do revise on the up.

With all the problems that are surrounding the PIGS of the Euro Zone at present we have to ask ourselves if the pound can not strengthen on the Euro now what are the chances once Greece implements their strategies to reduce their massive fiscal budget deficit?

I feel that the longer the UK’s political instability continues the once great British Pound will be the only loser!!!

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the contact form and I will be in touch with you shortly.

Sterling forecast – The week ahead

The Pound faces yet again another rocky week no doubt with a number of releases of note due out for the U.K in the next few days.

Firstly, we still have the dark cloud of a hung parliament hanging over our heads which has been one of the main factors holding Sterling back of late – this is likely to continue holding the Pound back in the lead up to the election.

Overnight tonight sees the release of retail sales data and house price balance data at 00:01am – any change to the expected releases may lead to volatility overnight for Sterling.

Tommorow morning will bring trade balance data for the U.K – I personally feel we may we this come out slightly better than expected due to the recent drop in value of the Pound which can only improve exports one would imagine.

Wednesday am brings industrial  production and manufacturing production data in early morning trading followed by the fresh GDP estimate from the NIESR (National Institute of Social and Economic research).

Both releases may lead to market movements – The last production release was actually better than analysts expected so should this be on the up again further Sterling strength may be seen.

The NIESR estimate could potentially throw the cat amongst the financial pigeons should they estimate that the U.K GDP figures are due to dip again leading towards a potential double dip recession… should this be the case the Pound may drop dramatically.

On top of all the data releases the currency markets are there to surprise us too, so be wary of any mention of QE by the Bank of England, any speeches from Alistair Darling or issues surrounding Greece over the course of the week.

If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the contact form and I will be in touch with you shortly.

Have a great day and thanks for reading!

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Bank of England to decide fate for the Pound today – Sterling forecast

Today at midday sees the Bank of England interest rate decision and although no change in interest rates is expected the focus appears to be on whether or not further QE will be put into place.

The BOE seem to like mentioning QE as a tool to talk down the value of the POund which in turn keeps our exports up and this has certainly worked in their favour again over the past week or so with the losses we have seen.

The losses as mentioned previously are due to a potential hung parliament, a large deal with Prudential and mortgage approval data being absolutely dire at the start of the week, add to that our revised GDP figures from Friday and things do not look great for Sterling.

Greece place new measures which brings minor confidence back to the Euro and minor strength – Euro forecast

Yesterday Greece announced details of their plans to conquer their huge budget deficit plans and how they would be supporting European assistance.

This was taken reasonably well for the Euro Zone and led to minor Euro strength but I am sure we have not heard the last of it.

U.S Unemployment figures set to lead to market volatility

Later this afternoon sees the release of unemployment figures for the States and it is a coin toss as to whether or not we will continue to see a further increase in jobless claims as we saw nearly 500,000 new claims in January.

The services sector appears to be improving in the U.S however whatever comes out of today’s unemployment figure is bound to cause some volatility.

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