Foreign Exchange Rate Forecasts

New Blog : www.CurrencyForecasts.co.uk

noreply@blogger.com (Alastair Archbold) — Wed, 25 Apr 2018 10:17:00 +0000

Hello,

You're currently subscribed to my currency updates via my old blog: ForeignExchangeRateForecasts and will have been receiving my posts by email.

We have now re-launched the blog and created new site here:

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Thank you.

What could impact sterling exchange rates this week?

noreply@blogger.com (Michael) — Tue, 03 Apr 2018 13:20:00 +0000

As we return after the Easter break sterling has had a relatively calm start to the working week but what should I be looking out for if I need to trade sterling this week?

Today, as market movements suggest, has been relatively light on the data front with little or no data of note. As a result sterling has traded between 1.1410 and 1.1440 against the Euro and 1.4025 and 1.4088 against the US dollar - a relatively small range. This trend is likely to continue for the rest of the afternoon - although anyone with an interest in the US dollar should look out for a speech from Fed member Lael Brainard this afternoon.

Heading into Wednesday and the focus for the pound will be UK PMI construction figures released at 09:30. This is forecast to show a slight decline from the previous month, down to 50.8 from 51.4. If as forecast this could set the tone for the day with sterling likely to trend downwards. For those looking at the Euro look out for inflation figures at 10:00.

On Thursday UK data is light with only Markit services PMI at 09:30 whereas there is plenty to focus on in the Euro Zone. This starts in the form of Retail Sales followed by Producer Price Index figures. Retail sales are forecast to post a strong increase from -0.1% to 0.6% and if as expected the Euro could strengthen on Thursday.

To finish off the week the main focus will be from across the pond with the important monthly non-farm payroll release. This is a key indicator as to how the US economy is performing and is one to look out for. Forecasts are for a significantly lower reading than March which would normally cause the US dollar to weaken as a result.

Should you be in the process of buying a property overseas or simply looking to make an international money exchange then we can help. As a specialist currency broker we have access to commercial exchange rates helping our clients save thousands when compared to the bank. To get a live quote for for more information please get in touch here

Pound falls away from highs

noreply@blogger.com (Alastair Archbold) — Tue, 27 Mar 2018 10:56:00 +0000

Yet again Sterling has been unable to sustain its gains after its recent rally. Last week GBP/EUR rates had hit €1.15 which was the highest this pair has been since June last year, however as has happened many times over the last 9 months, the gains have proved to be short lived and Sterling has fallen.

Today GBP/EUR has dropped back into the €1.13's. It's not much of a surprise that this has happened again. The progress with Brexit talks was welcome, but in reality it's only the end of the first chapter in what is likely to be a very long book indeed. If you look back over the charts you can see that this is a trend we've seen repeated many times.

Pound/Euro rates have been stuck in a range between around €1.12 and €1.15 but each time it reaches the top of this range, it only lasts a matter of days before the market corrects, and this is what we've seen happen again.

Clients that took advantage of our currency exchange services last week were able to freeze the rate while it was at a 9 month high. We don't just offer exceptional exchange rates that are significantly better than banks and other brokers usually offer, we also offer things like 'Forward Contracts' that allow you to freeze the exchange rate for a future date, by lodging a deposit of 10%. This is very useful for things like purchasing property overseas, as it protects you from adverse exchange rate movements and allows you to budget effectively.

If you need to buy or sell currency and would like to see what rate we can offer you, get in touch today.

Pound/Euro hits 9 month high

noreply@blogger.com (Alastair Archbold) — Thu, 22 Mar 2018 09:52:00 +0000

It's been a great week for the Pound, with Sterling ralling against nearly all major currencies. We're at the highest level against the US Dollar, AUD and NZD since the referendum. Against the Euro, exchange rates are the best they've been since June last year.

Why has the Pound/Euro rate gone up?

The main reason for the gains is renewed optimism surrounding Brexit. It's looking very likely that a transition deal will be agreed by the EU tomorrow, and this has removed much of the uncertainty that has been keeping the Pound low. Economic data from the UK also continues to impress - unemployment remains at record lows, the economy continues to grow, and this morning Retail Sales figures were significantly above forecast, pushing the Pound towards €1.15 vs the Euro.

Will it go up any further?

Today at 12pm, the Bank of England interest rate announcement. They won't raise rates, but the minutes to the meeting and any comments or hints at a rate rise in May could help the Pound further. If however they signal that inflation may come back down towards the 2% target without intervention, then the appeal of the Pound may diminish. So lunchtime today will be key to Sterling's fortunes and will dictate whether the run will continue.

Do you have a transfer to make?

Either way it's great news for those that need to convert a large volume of Pounds to Euros. The rate has gained almost 3% in the last few weeks, making a typical purchase of €250,000.00 over £6000.00 cheaper. If you have an upcoming transfer to make, then it's worth seeing what rate we can offer you.

Get in touch today for a free quote.

Sterling rallies on Brexit breakthrough

noreply@blogger.com (Michael) — Mon, 19 Mar 2018 15:34:00 +0000

Sterling has rallied to reach multi year highs against a number of currencies with notable moves being seen against the US dollar, Euro and Australian Dollar.

Moves were seen following news that the UK and the EU have made significant steps and agreed on a “large part” of the Brexit agreement that will lead to the “orderly withdrawal” of the UK. This was a significant move with Brexit Negotiators Michel Barnier and David Davis describing it as a “decisive step”. The transitional period is set to last from 29 March, 2019 to December 2020, and is intended to smooth the path to a future permanent relationship.

As a result sterling has strengthened throughout much of the day with notable moves through 1.40 for GBP/USD and 1.14 GBP/EUR. Another significant movement was seen against the Australian Dollar with the pound reaching a post-Brexit high of 1.8280 having rallied over 3.5% in less than a week.

For those looking at the Euro, a word of warning, this is now the fifth time the pound has breached 1.14 since October 2017. On the five previous occasions a breach of 1.14 has been seen, the pound has corrected quite sharply. There is no guarantee this trend will continue but with such a sharp rally for the pound today we could easily see another short term dip. If you need to make a transfer in the coming weeks, get in touch with your account manager to take advantage of this recent rally.

Should you have an upcoming international money transfer to arrange and you need assistance getting the best rate of exchange then please get in touch for a free quote

Pound rises on news of Brexit deal

noreply@blogger.com (Alastair Archbold) — Mon, 19 Mar 2018 12:03:00 +0000

Sterling has had a good start to the week, rising to €1.1420 against the Euro and $1.4071 against the US Dollar. It is also up against most other major currencies.

Why has the Pound risen against the Euro and US Dollar?

The reason for the Pound rising is news that the UK and EU have agreed to a transition deal for the period after March 2019. There is a press conference this afternoon when chief negotiator Michel Barnier and UK Brexit secretary David Davis will speak. This could shed more light on what progress has been made. It will be interesting to see what compromises have been made to get to this point, and to see if the EU side have made any, something they have been unwilling to do until now.

It will be interesting to see if the Pound can hold on to these gains. Since last summer, we have seen GBP/EUR reach the €1.14/€1.15 mark 5 or 6 times, but previously the gains have been short lived, as uncertainty drags the Pound lower again. Will this time be different? Only time will tell, but the rate has risen from €1.1150 to €1.1425 in the last few weeks, and given that we're now very close to the best Pound/Euro rates we've seen since last summer, it's certainly worth considering locking in a rate while better levels are available. If you would like a free quote to see what rate we can offer you, click here.

What else could move the Pound this week?

It's quite a busy week in terms of data releases. We have UK Retail Sales and inflation numbers tomorrow, Unemployment and wage growth figures on Wednesday, the Bank of England announces it's latest policy statement and decision on interest rates on Thursday, and a Quarterly bulletin is released by the BoE on Friday.

Lots then that could affect the Pound. The key events will be the wage growth numbers mid-week, and any gains here could increase the likelihood of the BoE raising interest rates. While we don't expect the BoE to raise rates at their next meeting this Thursday, and hints in the press conference afterwards that they intent to do so soon, could help the Pound stay above the key €1.14 mark which it has struggled to do over the last 6 months.

if you're looking for competitive FX rates, then get in touch with us today for a free quote.

Monthly Currency Focus: GBP, EUR, USD, AUD CAD

noreply@blogger.com (Alastair Archbold) — Thu, 15 Mar 2018 08:47:00 +0000

The threat of a potential global trade war has provoked significant volatility on the currency markets, although the US Dollar has failed to particularly benefit from the Trump administration’s increased protectionism. In today's post we'll take a detailed look at some major currencies including Sterling, Euro, USD, CAD and AUD. If you are looking for the best exchange rates and would like a free quote, click here.

Pound Sterling

December’s UK labour market data failed to offer any particular encouragement to the Pound, with the unemployment rate showing a surprise increase to 4.4%. This helped to overshadow a better-than-expected wage growth figure, keeping investors from betting too heavily on the prospect of the Bank of England (BoE) raising interest rates again sooner rather than later.

An unexpected downward revision to the fourth quarter UK gross domestic product put the Pound under further pressure, underlining worries over the domestic outlook. With the UK and EU still looking to be largely at odds over various key issues related to Brexit, including the Irish border, GBP exchange rates struggled to find any significant headway. Unless there are signs of progress in the next round of negotiations, beginning next week, the Pound is unlikely to see any particular uptick in demand.

If February’s UK consumer price index fails to fall back towards the BoE’s 2% target this could provoke some volatility for GBP exchange rates. While weaker inflation would be good news for domestic consumers this could still dent the Pound, as above-target price pressures would give the BoE incentive to raise interest rates further. Get a quote to convert GBP.

Euro

A surprise shift towards populism in Italy’s latest election spooked the Euro, even as the German political situation finally stabilised with the formation of a coalition government. Underwhelming German and Eurozone inflation data encouraged the European Central Bank (ECB) to maintain a generally cautious view on monetary policy, meanwhile.

Although the ECB chose to drop its explicit easing bias from its March policy statement this failed to boost EUR exchange rates for long. ECB President Mario Draghi was quick to talk down the single currency, assuring investors that the change in language was a backward-looking alteration rather than a signal of hawkish intent.

If signs continue to point towards weaker inflationary pressure within the currency union this should keep the Euro under a degree of pressure in the coming weeks. Any weakening of domestic growth could also weigh on EUR exchange rates, especially if fears of a trade war with the US continue to heat up. Get a quote to buy or sell Euros.

US Dollar

As the Trump administration shifted into a more protectionist mind-set, announcing steep tariffs on steel and aluminium, this gave markets some cause for concern. Although risk aversion picked up in the wake of the announcement this failed to particularly benefit the US Dollar, which was dented by fears over the implications this policy has for the US economy.

Steadying US inflation figures and weaker-than-expected wage growth undermined bets that the Federal Reserve will raise interest rates as many as four times over the course of 2018. With the domestic labour market showing greater slack than previously thought there appears to be less cause for the Fed to tighten monetary policy aggressively.

As the Fed is still widely expected to hike interest rates at its March meeting the impact of the move is likely to be rather limited, having already been largely priced into USD exchange rates. Political concerns could also limit the upside potential of the US Dollar in the coming weeks, with a continued push towards protectionism unlikely to encourage investors. Get a quote to buy or sell USD.

Australian Dollar

Unsurprisingly, the Reserve Bank of Australia (RBA) maintained a rather neutral stance on monetary policy at its latest policy meeting. Even so, policymakers adopted a slightly more positive outlook on domestic wage growth, helping to encourage AUD exchange rates.

As the next interest rate move is still more likely to be up than down this downside potential of the Australian Dollar was somewhat limited. While the fourth quarter Australian gross domestic product fell short of forecast this failed to drive AUD exchange rates any lower.

As Australia was quickly granted an exemption from new US tariffs on steel and aluminium this offered the Australian Dollar a rallying point, even though concerns over the global trade outlook remain. However, if the unemployment rate is found to have bounced back in February the Australian Dollar could be vulnerable to fresh losses. Get a quote to buy or sell AUD.

Canadian Dollar

Stronger-than-expected Canadian inflation data offered support to the Canadian Dollar, reversing December’s -0.4% contraction as prices accelerated 0.7% on the month. This improvement naturally encouraged hopes that the Bank of Canada (BOC) could return to a tightening bias in the coming months.

Trade concerns increasingly weighed on CAD exchange rates, however, as the Canadian economy would suffer severely in the face of a more protectionist US. Worries over oil also limited the appeal of the Canadian Dollar, with Saudi Arabia and Iran seeming increasingly at odds over the desirable price level.

If the OPEC production-limiting agreement breaks down this could put significant pressure on CAD exchange rates, which remain sensitive to the outlook of the oil market. Uncertainty over the future of NAFTA may also keep the Canadian Dollar on a softer footing, as the trade agreement still looks to be at risk of potential collapse. Get a quote to buy or sell CAD.

GBP/EUR and GBP/USD - What could impact the currency market today?

noreply@blogger.com (Michael) — Wed, 14 Mar 2018 09:49:00 +0000

Following yesterdays spring statement the pound had a relatively strong day posting gains against most of its majors. At its highest GBP/EUR peaked just shy of 1.13, up from last weeks low of 1.1150 and GBP/USD pushed back close to 1.40.

Philip Hammonds spring statement was relatively well received by the market. During his speech he upgraded projections for growth and predicted falling inflation and borrowing. He claimed the UK economy had reached a turning point and that there was "light at the end of the tunnel"

He went on to tell MP's that growth forecasts were up to 1.5% for this year, up from 1.4% as forecast by the Office for Budget Responsibility in November. Forecast for 2019 and 2020 remained the same at 1.3%

As for sterling against the US dollar, again some positive movements were seen during and after the spring statement however the biggest move came following the announcement that the US secretary of state Rex Tillerson had been sacked. The former head of ExxonMobil had a series of public disagreements with President Trump who officially fired Mr Tillerson via Twitter. This news caused a sell off for the dollar, pushing levels back towards 1.40

Should you have an upcoming international money transfer to arrange then looking at today it is relatively light on the data front from the UK's point of view but there is plenty of data this afternoon from across the pond. This comes in the form of US retail sales and business inventories at 13:30. I would also expect the market to continue to react to yesterdays political movements stateside.

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How will Spring Statement affect Sterling?

noreply@blogger.com (Alastair Archbold) — Tue, 13 Mar 2018 08:49:00 +0000

Sterling edged higher against the Euro yesterday, recovering some of last week's losses to approach the €1.13 level again. Markets expect the OBR to upgrade the UK's growth forecasts today during Chancellor Hammonds Spring statement. We don't expect any other announcements on tax and spending, and usually the Spring statement doesn't have too much of an impact on the currency markets. The Pound could head above €1.13 again however if the OBR do raise growth forecasts as expected.

The UK economy is performing quite well, and the only reason the Pound isn't higher is the failure to move forwards with Brexit negotiations. The EU are seemingly unwilling to budge and actually negotiate, and this uncertainty is keeping Sterling from trading higher. There is a summit in 10 days and I do expect the a Brexit transition agreement will be reached, and this could help the Pound gain. It won't take much to help push the Pound higher - interest rates rises are already largely priced in to the value of Sterling, so all we need is some progress with Brexit talks.

Those that need to buy Euros could see where rates lie after the Spring statement at 12:30pm today, and if the Pound does gain then it could present an opportunity to purchase Euros at a higher rate. There's not much else on the agenda today, or for the rest of the week, in terms of economic data releases, so Sterling is likely to continue being driven by political developments.

If you are looking to get the best exchange rates, then why not get in touch with us today for a free quote. Our rates are 2% to 3% better than banks would usually offer.

GBP/EUR falls below 1.12, will the pound fall further?

noreply@blogger.com (Michael) — Wed, 07 Mar 2018 17:06:00 +0000

Sterling has fallen to its lowest level against the single currency since September 2017 having fallen to a low of 1.1150/0.8969 and bring the pounds losses to over 2.2% in the last week.

Sterling's losses were felt as it would appear the EU will refuses the UK's service sector access to the continent. In a speech from Chancellor Philip Hammond he told European leaders that it is in "mutual interest" of both the UK and EU to include financial services in a free trade agreements saying it is possible to reach a deal, however following this EU president Donald Tusk flat out rejected the proposals.

This caused a significant sell off for the pound with many analysts suggesting this could just be the start, a sobering thought for anyone looking to buy Euros.

What could impact the pound for the rest of the week?

Moving away from the on-going Brexit saga, other areas to focus for those looking at GBP/EUR will include the European Central Bank (ECB) interest rate decision and accompanying statement at 12:45 and 13:30 respectively. No movement is expected in the base rate but look out for any clues as to future monetary policy from Mario Draghi, the head of the ECB.

Looking to Friday and this is set to be the busiest day data wise for sterling. At 09:30 we will see both industrial and manufacturing production figures, a key insight as to the health of the UK economy and dependent on the outcome can cause some significant movement for the pound.

Should you have an upcoming international money transfer to arrange and you would like to discuss the full currency service we provide then please get in touch by clicking here

Brexit uncertainty continues to hold back Sterling

noreply@blogger.com (Alastair Archbold) — Tue, 06 Mar 2018 10:45:00 +0000

The Pound has fallen away since last week, dropping from €1.14 down to €1.12. The reason for the drop? You've guessed it; Brexit. Since September last year, the GBP/EUR rate has been stuck in a range between around €1.12 and €1.14. This time a week ago we were at the upper end of this range, but today we're back at the lower end of the range. Seemingly this pair is stuck at these levels without able to make any progress.

Brexit uncertainty keeps downward pressure on Sterling

The reason for last week's fall is continued uncertainty about what is happening with Brexit negotiations. We saw salvos fired from both the EU and Theresa May in the last few weeks, and is not at all clear whether the UK and EU can agree a transition deal. There will have to be concessions made, and at present it seems to be that the EU are unwilling to actually negotiate, instead laying down red lines that they know will be impossible for the UK government to adhere to. This is probably simply a strategy to try and unsettle the UK side, which is in a state of disarray anyway with different factions within the Conservative party making May's job extremely difficult. This means little progress has been made, and this continued uncertainty is what sent Sterling lower last week.

Will the UK and EU agree a deal this week?

If they can agree a transition deal, which is hopefully what they will do this week, then it will remove much uncertainty and also mean it's likely the Bank of England will start to raise interest rates in the next few months. Should this happen then I would expect GBP/EUR Rates to recover back to the upper end of it's current range to as high as €1.15. If however the EU and UK don't make concessions and stay behind their 'red lines' then it's highly likely the Pound will continue to struggle until progress is made.

Personally I think that Theresa May's speech last will struck a conciliatory tone, and could pave the way to showing some flexibility which could help the break the deadlock and move talks forward. The EU are due to give some feedback this week and we could learn more about how they will approach talks. All of this will be what drives Sterling exchange rates this week, and I don't think much attention will be paid to the usual economic data releases.

Do you need to exchange currency?

In addition to regular market commentary to give insight as to what is driving rates, we are a commercial FX brokerage that can offer both Personal and Business clients exceptional rates of exchange. If you would like to get a free quote to see what rate we can offer you, make a free enquiry today.

Are you getting the best deal on your foreign exchange?

noreply@blogger.com (Michael) — Tue, 27 Feb 2018 16:03:00 +0000

With uncertainty and global risk appetite causing some significant swings in the markets it is as important as ever to shop around to ensure you are getting the best deal when sending money overseas.

Unfortunately for many the first port of call when making a large international transfer is to approach your bank and this in many cases can be a clients first mistake. When making international transfers the banks can often include a significant spread on the currency, in some cases 3-4% over and above the mid market and advertised rate commercial rate. When using the services of a specialist foreign exchange broker this spread can be significantly reduced saving clients thousands of pounds.

What is the best contract for me?

Through utilising the services of a money broker this gives clients access to more complex contracts in an attempt to safeguard your exchange rate. This could include the use of a forward contract whereby for a nominal deposit clients can pre-book an exchange rate for delivery at an agreed date in the future.

Other contracts that are also available include the use of stops and limits giving the clients an opportunity to target a desired rate but at the same time setting a worst case scenario to cover against any significant adverse market movement.

Should you wish to discuss our service in more detail then please get in touch and one of our currency specialists will contact you to discuss your requirement.

Will the Pound go up or down this week?

noreply@blogger.com (Alastair Archbold) — Mon, 26 Feb 2018 10:16:00 +0000

Sterling has started the week rather well, pushing higher against the Euro and US Dollar, to €1.14 and $1.4050 respectively. These are good buying levels for both pairs, with the GBP/EUR rate close to an 8 month high, and GBP/USD close to the best we've seen since the referendum.

The week ahead could be an interesting one. Firstly, there may well be further developments with Brexit negotiations. Labour have announced their policy would be to remain in the customs union. In reality this means the government could be defeated if Tory rebels join Labours ranks and vote down plans. It also means that if the UK were to remain in a customs union, we would not be free to strike our own trade deals, which would be the main economic benefit of leaving the EU.

Theresa May will also announce the Cabinet's approach to negotiations, and you can be sure that the EU will respond and remark. How all this plays out in terms of exchange rates largely depends on how the markets react. Anything that they perceive as political uncertainty or anything that could delay EU talks would likely send the Pound lower. If however it looks like the 2 sides are becoming more aligned, then the Pound could move higher, testing 8 month highs of €1.15+.

Alongside potential Brexit developments, will also be the scheduled economic data releases, that often move exchange rates if the numbers differ to what the markets expect. A brief outline of the week's releases are below.

If you have a transfer to make and would like to see what rate we can offer you, get in touch today for a free quote.

This week's economic data releases

Monday 26th Feb - A rather quiet day, but this evening we have speeches by the UK and US central banks, and any hints on interest rate policy could affect the Pound or the US Dollar.

Tuesday 27th Feb - We have EU industrial Confidence, Consumer Confidence and Services sentiment data today at 10am. Positive news would push GBP/EUR rates lower.

Wednesday 28th Feb - The only UK data today is a measure of consumer confidence. Elsewhere we have German unemployment figures and EU inflation. The USA releases it's preliminary GDP figures.

Thursday 1st March - UK Nationwide House prices, Inflation numbers and mortgage approvals are all released at 09:30am and could affect Sterling. EU unemployment is at 10am. US jobless numbers and Inflation figures come in the afternoon.

Friday 2nd March - Today is important for the Pound, as we have a speech by Theresa May and another one by the Bank of England. Both of these have the potential to caused significant volatility for Sterling.

For a detailed outline of what could move your currency pair, or to get a free quote, get in touch today for a free no obligation consultation.

Pound falls as UK growth lower than expected

noreply@blogger.com (Alastair Archbold) — Thu, 22 Feb 2018 16:29:00 +0000

The Pound has fallen away in the last few days, dropping back to around the €1.13 level against the Euro, and to $1.39 against the US Dollar. The drop came after the latest round of UK employment numbers and growth data.

Figures showed an unexpected rise in unemployment. Average earnings was up 2.5% as expected. UK GDP fell to 0.4% and was expected at 0.5%, so as the number was below, the Pound fell. Several Bank of England members gave speeches yesterday again saying that due to high inflation, interest rates would need to rise, however this news is nothing new so didn't help Sterling.

Over in the USA the FED again signalled that interest rates would be going up 3 times this year, and this helped to strengthen the USD, pulling GBP/USD rates back below the $1.40 mark.

Tomorrow we have EU inflation numbers, German GDP, and speeches by the ECB, all of which could affect GBP/EUR rates. Positive numbers from the EU would strengthen the Euro and pull rates lower.

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Pound moves higher on softening of EU approach to Brexit

noreply@blogger.com (Alastair Archbold) — Tue, 20 Feb 2018 11:06:00 +0000

We've seen a slight spike in Pound/Euro rates this morning to €1.1350, which is within about 1% of the best we've seen in 8 months. There have been no data releases to cause the move, and the slight strengthening is due to reports that the EU parliament will call for the UK to have privileged access to the single market.

This is a positive move, and the EU parliament will call for the EU to negotiate an agreement to give access and membership of EU agencies. This is clearly different to what Michel Barnier has been saying until now. The markets clearly like the news, with Sterling rising higher across the board.

This week we may get further clarity on the UK's position on what it wants from Brexit, in various speeches that are due to be given. Anything that signals progress and a lifting of the uncertainty surrounding this issue could send the Pound higher still.

What else could move Pound/Euro rates this week?

In terms of scheduled economic data releases, there are several important things to look out for this week if you're keeping an eye on GBP/EUR rates. Tomorrow is a very important day for Sterling, as we will see the following information released:

Average Earnings and Wage Growth data
Jobless Numbers
Unemployment rate
Public Sector net borrowing
BoE Mark Carney Speech
BoE Inflation report
Speeches by 3 other BoE members

Lots for the market to chew on, and it all relates to interest rates. If inflation is still running high then at some point, the Bank of England will have to raise interest rates. Higher interest rates would generally strengthen a currency due to the higher return on offer, and so this should send the Pound higher. What's been stopping the BoE from raising rates however, is the fact that wages are growing slower that inflation, meaning real incomes have been falling. Recently, wage growth has picked up, and if these numbers due on Wednesday confirm this again, it way well send the Pound higher. If wage growth is still stagnant however, rates may fall again as the appeal of the Pound diminishes

What the BoE members say in their speeches tomorrow will also be watched very closely as to any hints to when rates may go up.

if you would like to discuss exchange rates in more detail, discuss which way the market is moving, or simply find our what exchange rate we can offer you, make a free enquiry today.

US dollar surge halted

noreply@blogger.com (Michael) — Thu, 15 Feb 2018 14:28:00 +0000

In the past 24 hours we have seen a significant swing for cable (GBP/USD) with the high/low range from 1.4095 to 1.38 or just over a 2% spread. Much of the movement came following yesterday afternoons inflation data which in fact was stronger than expected.

Normally if you see inflation rise this would prompt the value of a currency to strengthen and indeed the initial reaction followed this trend was for dollar strength. Rising inflation would normally mean that a central bank may look to raise interest rates to stop inflation from rising too high, with yesterdays higher reading it suggested to the market that the Fed will continue its stance with regards raising interest rates throughout 2018.

Why did the dollar weaken?

Under normal circumstances the dollar should have strengthened yesterday but has now fallen nearly 3 cents since the release. This highlights how fickle the market can be.

"From a longer-term perspective markets remain uninspired by the US economic prospects and the USD. Effectively markets continue trading the end of the US economic cycle where any near-term acceleration in inflation may trigger more Fed tightening but will also bring forward the next downturn," says Manuel Oliveri, a FX strategist at Crédit Agricole in London.

In this uncertain market it is important to get as much information as you can to help limit your exposure to adverse market movement. Should you have an upcoming money transfer to arrange and you would like assistance in getting the best exchange rate for your transfer then please get in touch for a free quote

Strong US Data strengthens USD, weakens EUR

noreply@blogger.com (Alastair Archbold) — Wed, 14 Feb 2018 13:58:00 +0000

This afternoon we saw a host of US Data released, and this has caused some movements for both GBPEUR and GBPUSD rates. The data showed that inflation is higher than markets had been expecting. As a result, it's now very likely we'll see several rate increases for the USA this year.

In turn, the USD has strengthened, as the prospect of higher interest rates increases demand for a currency, increasing its value and making it more expensive to purchase. This has caused GBP/USD rates to fall further today, from $1.3925 to $1.3825.

We've seen an inverse move in GBP/EUR - this pair has risen from €1.12 to €1.1240. This is because a very common currency pair is EURUSD. As the Dollar has gained today, investors have sold Euros to buy the Dollar. As Euros are sold, they decrease in value, becoming cheaper to buy and pushing GBP/EUR rates higher.

So as you can see, despite the lack of any data today from the UK or any Brexit developments, you can still see significant moves in Sterling pairs due to other events in different countries, and the inverse relationship between some currencies.

Would you like to get the best exchange rates?

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Monthly update for GBP, EUR, USD, AUD, NZD, CAD

noreply@blogger.com (Alastair Archbold) — Mon, 12 Feb 2018 15:34:00 +0000

Monthly Currency Focus: GBP Down on Brexit Concerns, USD Boosted by Fed Hike Hopes

We’ve seen some pretty notable movement in the currency market over the last few weeks, with the Pound falling from its best levels amid ongoing Brexit concerns, the US Dollar recovering from its January downtrend and the Euro being bolstered by German coalition developments. In today's post, we'll take a look at the main currencies we trade.

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Pound Sterling (GBP)

Sterling surged in the wake of the Bank of England’s (BoE) first policy decision of 2018, with the British currency climbing against most the majors as the central bank indicated that further rate hikes are on the way. The Pound was also supported by the BoE’s decision to raise growth forecasts – but GBP’s gains weren’t to last. Sterling swiftly plummeted from its best levels after the EU’s chief negotiator Michel Barnier implied that the UK may not be granted a transitional Brexit deal. Barnier asserted; ‘I’m surprised by these disagreements and if they persist, a transition is not a given. I wasn’t talking about a threat. We have to bear in mind what the UK has said. I have some problems understanding the position.’ Shadow chancellor John McDonnell also asserted that the ongoing Brexit uncertainties could still lead to another referendum or general election. Over the next few weeks Brexit developments will keep Sterling on its toes, with further signs of divisions within the Conservative party weighing on the Pound. Other UK news to focus on includes the nation’s inflation, retail sales and employment numbers. If key ecostats support the case in favour of an interest rate hike from the BoE, it may limit the Pound’s losses.

Euro (EUR)

Positive data from the Eurozone, US Dollar weakness and developments in German coalition discussions kept the Euro elevated in January, but the common currency came under a little pressure as February got underway. EUR exchange rates stumbled as European Central Bank (ECB) President Mario Draghi defended the institution’s loose monetary policy. He stated: ‘While our confidence that inflation will converge toward our aim of below, but close to 2 percent has strengthened, we cannot yet declare victory on this front. Monetary policy will evolve in a fully data-dependent and time-consistent manner.’ The Euro also came under pressure as the US Dollar rebounded from its recent lows. If the ECB remains cautious on the subject of tightening monetary policy over the next few weeks, the Euro could give up further ground. EUR may also start feeling the pressure in the build up to the Italian election.

US Dollar (USD)

In February the US Dollar started recovering from a prolonged period of weakness as hopes that the Federal Reserve will increase interest rates in March rose. The central bank increased borrowing costs in December and indicated that they could rise a further three times over the course of 2018. If it appears that four rate hikes are more likely than three, the US Dollar could edge higher in the months ahead. With US monetary policy in focus, investors will be paying close attention to high-profile US data – including the nation’s inflation and employment figures. Any results which lower the odds of four rate hikes taking place this year would be US Dollar-negative.

Australian Dollar (AUD)

Recent hints from the Reserve Bank of Australia (RBA) have undermined demand for the Australian Dollar. The RBA indicated that it’s in no rush to increase interest rates, with Governor Philip Lowe implying that the central bank won’t be pushed into making an adjustment just because other central banks are taking action. Lowe noted: ‘We did not lower our interest rates to the extraordinarily low levels seen elsewhere after the financial crisis. Just as we did not move in lock-step on the way down, we don’t need to do so in the other direction.’ The Australian Dollar could struggle over the next few weeks as the Fed gears up to hike interest rates in March. Commodity price fluctuations and local reports (including Australia’s employment figures) could also prove influential.

New Zealand Dollar (NZD)

Although the New Zealand Dollar has been able to gain on a broadly weakening Pound, other NZD exchange rates haven’t fared so well. The Reserve Bank of New Zealand’s (RBNZ) chief economist implied that flagging NZ growth could prompt an interest rate cut. John McDermott was quoted as saying: ‘The market thinks ‘you guys are never gonna [cut]. They’ve been through almost a whole year of ‘there’ll be no chance you guys are going to cut interest rates.’ Well, that’s not true. We kept saying there’s an equal probability that the next move could be up, or the next move could be down.’ The RBNZ’s upcoming 2-year inflation expectation for the first quarter could prompt some NZD exchange rate movement, but investors will also be looking ahead to the next dairy auction. Dairy prices rose at the last auction, and the New Zealand Dollar could benefit if the price of New Zealand’s key commodity keeps rising.

Canadian Dollar (CAD)

A spate of less-than-impressive Canadian data has limited the Canadian Dollar’s upside potential in recent weeks. The most recent data to disappoint was the nation’s employment figures, with the Canadian unemployment rate unexpectedly rising to 5.9%. Stumbling oil prices have also kept the Canadian Dollar under pressure. Canadian reports are in short supply in the days ahead, so investors will now start looking ahead to the next Bank of Canada (BOC) interest rate decision on 7th March.

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Stock market correction lends support back to the pound. What could happen to sterling exchange rates?

noreply@blogger.com (Michael) — Wed, 07 Feb 2018 15:48:00 +0000

Following Mondays bleak day for global stocks in which the Dow Jones fell by 4.6%, its largest daily loss since 2011, markets have made some what of a recovery lending support back to the pound.

In particular we have seen the pound make a good recovery against the US dollar up from yesterdays low of 1.38 to reach a day high of 1.3950 although this current market volatility we are seeing could easily continue for the rest of the week.

Looking away from stock market fluctuations and anyone with an interest in the pound should focus on tomorrows Bank of England interest rate meeting and accompanying statement. Again we are not expecting to see any action from Mark Carney but his accompanying statement is the area to focus on. With many of the major central banks, in particular the Fed hinting at future interest rate hikes the markets is looking for clues as to when the UK may follow suit. Indeed the prospect of future interest rate hikes in the US was much of the reason the stock markets have seen such a turbulent run.

Why have the markets reacted?

We have been through an era of central banks printing more money in a bid to make money more freely available to get people spending in order to help economies grow, this has been supported by historically low interest rates. In recent days investors have looked at rising bond yields, higher wage growth and higher commodity prices, all key indicators to rising inflation. By the central banks moving away from this period of printing money and low interest rates and removing this stimulus, investors have been spooked and created this sell off.

Some could argue the market needed a correction, indeed the Dow Jones had gained over 25% during 2017. This growth was not sustainable and the bubble was due to burst and the market is now very finely balanced. Personally I wouldn't be surprised to see more losses and a further drive into the safe have currencies like the US dollar. With on going Brexit concerns the pound is certainly not a safe bet and I wouldn't be surprised to see the pound suffer further in the coming days.

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Risk appetite hits the pound, what is in store for sterling this week?

noreply@blogger.com (Michael) — Tue, 06 Feb 2018 10:42:00 +0000

Sterling has posted some losses to start the week following yesterdays poor service data as the the service sector clocked its slowest rate of expansion since September 2016 in January.

As a result, the Pound (GBP) trended lower across the board on Monday, with its weakness exacerbated by the latest signs of division over Brexit within the Conservative government.

Sterling is a currency that many see as risky option due to concerns surrounding Brexit. As a result, and following a significant shift in global risk appetite, sterling has been one of the biggest losers.

Yesterday global shares took a tumble, with the US market taking a particularly big hit. In fact Monday was brutal for stocks with the Dow Jones index falling 4.6%, it largest fall since August 2011 and the aftermath of "Black Monday" when Standard and Poor's (the US credit rating agency) downgraded the US.

This sentiment was felt in European and Asian markets creating a huge market sell off. As a result sterling was to lose significant ground against both the US dollar and Euro. It did post gains against the Australian Dollar however, often regarded as a risky currency due to hits high yields, which to me suggests much of yesterdays market movement has been risk based.

What can we expect for the pound?

The biggest losses for the pound were seen against the US dollar, interesting considering the Dow Jones took such a beating. Recently we have seen some positive data from the US which has heightened speculation that the Federal Reserve will look to raise interest rates in the short/medium term. For this reason we could easily see GBP/USD trend lower and whilst rates are still close to 1.40 any buyers of the US dollar may wish to look at their positions.

Any one looking at sterling should also look out for the major release of the week (from the pounds point of view) in the form of the Bank of England interest rate decision at 12:00 on Thursday. No movement is expected however the accompanying press conference from Mark Carney should be viewed for any future insight to the central banks monetary policy.

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Leaked Government Brexit analysis stops sterling in its tracks

noreply@blogger.com (Michael) — Tue, 30 Jan 2018 10:08:00 +0000

Yesterdays leaked Government document surrounding Brexit suggested that in every scenario the UK will be in a worse off position. In the document released on website Buzzfeed, it suggested the UK growth could be as much as 8% worse off depending on what is agreed with our European counterparts.

This release has firmly halted sterling in its tracks and once again the elusive 1.15 seems to be a hurdle too far for the pound to consistently surpass. This is now the 6th occasion in the last 6 months the pound has reached 1.15 and once again a quick sharp correction has been seen.

Other significant moves have been seen against other majors such as the US dollar. At its peak last week GBP/USD traded at 1.4325 and this morning, albeit very briefly, it fell below 1.40, a fall of 2.3% in just over three trading days. Again highlighting how volatile this current market is.

For anyone looking at EUR or USD positions, particularly those buying euros and dollars, don't be too disheartened. In the last three months we have seen GBP/EUR as low as 1.07 and GBP/USD in min January sat at 1.3450 (we are now at 1.4070). We are still someway above the lows but it shows me how vulnerable sterling is, particularity where Brexit is involved.

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The week ahead for Sterling exchange rates

noreply@blogger.com (Alastair Archbold) — Mon, 29 Jan 2018 10:24:00 +0000

True to recent form, the Pound fell towards the end of last week, dropping from an 18 month high against the USD and from a 7 month high against the Euro. Given the strong run Sterling has had recently, it's not surprising to see it's rally run out of steam. Currently Pound/Dollar is still quite good at $1.41. Pound/Euro has dropped into the mid €1.13's. (view live graphs here).

Many clients that got in touch with us last week managed to freeze their rate at the high, with some opting to do so with a 'Forward Contract'. This allows you to lock in the current rate for up to 2 years, thus protecting you from rates dropping and allowing you to budget effectively. This is key when you need to transfer a large sum, for a property purchase for example. If you would like to get a free quote or just find out more about the currency services we offer, then make an enquiry today or send me an email.

What could move exchange rates this week?

As usual for a Monday, in today's post I'll outline what economic data releases are in store for the week ahead and how I think they may affect the currency markets.

Monday 29th January 2018 - We've already seen German trade balance numbers this morning which bettered forecasts. This strengthened the Euro and caused GBP/EUR to fall slightly. There is also a speech by 2 ECB members today, and if these mirrors the upbeat tone of last weeks ECB meeting, the Euro could make further gains against Sterling. There is nothing of note from the UK today , however GBP/USD could move on US inflation numbers, and GBP/NZD could be affected by trade balance numbers from the land of the long white cloud tonight.

Tuesday 30th January 2018 - Quite a bit today that could move Pound/Euro. From the UK we have the latest mortgage numbers and a speech by BoE governor Mark Carney. His comments usually send the Pound lower as he'll usually rather pessimistic about the UK economy. Also of note will be EU GDP numbers and various measures of confidence. If growth matches or exceeds the 0.6% forecast, then expect GBP/EUR to move lower.

Wednesday 31st January 2018 - German Retail Sales and German/EU unemployment numbers are the main release today that could move GBPEUR. The EU's largest economy is doing ok, and if today's figures confirm this then the Euro could gain. EU unemployment though is rather high at nearly 9%, so these numbers could take limit the single currency gaining too much. Over in the states we have the latet FED rate decision with interest rates expected to remain at 1.5%. The accompanying statement however could move GBP/USD rates.

Thursday 1st February 2018 - UK data is thin on the ground today, with only House Prices and manufacturing PMI numbers to watch out for. The latter could send the pound higher if this sector continues to show robust expansion which of late, it has. Elsewhere US Jobs numbers and Manufacturing figures will be the main release for the USA.

Friday 2nd February 2018 - Again not much that will move GBP/EUR unless there are any developments with regards to Brexit negotiations. there are some EU Inflation numbers at 10am but I'm not expecting much movement from this. the USA however releases it's non-farm payrolls at 13:30pm - these are notoriously difficult to forecast and so the actual result is often way off the expected. Currently markets are pricing in a number of +175k new jobs - more than this would move GBP/USD lower. Less than this would move GBP/USD higher.

To discuss this report in more detail, get a quote, or just find out more about the foreign exchange services we offer, contact us today.

Sterling posts losses to end the trading week

noreply@blogger.com (Michael) — Fri, 26 Jan 2018 16:23:00 +0000

Sterling has ended the week on negative note following some multi year highs experienced earlier in the week. In fact some of the ground sterling has made has been pretty significant having rallied, at one point, over 4.5% against the US dollar in just over a week to reach a post Brexit high of 1.4325.

A strong run had also been seen against the euro with sterling pushing to a near 6 month high on Wednesday. As with the GBP/USD this rally was not to last and sterling has tailed off to finish the working week. With on-going Brexit negotiations likely to keep the pound in check, particularly against the Euro one could argue these current levels may not last for long. Interestingly the pound has breached 1.14 five times in the last six months and on every occasion has fallen sharply. Should this trend continue then these current levels may not last for long.

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Pound falls from recent multi-month highs

noreply@blogger.com (Alastair Archbold) — Thu, 25 Jan 2018 16:52:00 +0000

This week Pound/Euro rates broke through €1.15 to hit the highest levels since June last year. Pound/Dollar broke through $1.43 earlier which is the highest since the EU referendum. This afternoon rates have slipped back slightly. Let's look at why rates rose, what has caused the drop, and the forecast for where GBP/EUR could go in 2018.

Pound/Euro hits highs of €1.15

Earlier this week I outlined the UK employment data as a key event that could move rates higher. As predicted we saw wage growth come in slightly above forecast, and this was the main catalyst that sent Sterling higher to multi-month highs against the Euro and USD. Average wages came in at +2.4% which was more than the markets had been expected. As I explained in my recent post, a higher number increases the likelihood of an interest rate rise and would probably cause the rate to rise, which it duly did.

The rise in Pound/Euro was halted in it's tracks however at lunchtime today following the European Central bank policy announcement and comments from the ECB president Mario Draghi. His comments were taken as Euro positive and the single currency fought back, gaining some strength and causing GBP/EUR to retreat back towards €1.14.

Will Pound/Euro go back up to €1.20 again?

It's worth noting that if you look at the graphs of how GBP/EUR has moved over the last 6 months or so, we've seen it reach these levels 5 or 6 times. Each time it's dropped back away again rather quickly and it looks like this has been the case again. Brexit uncertainty is keeping Sterling in check and I suspect this will continue to be the case.

The UK economy is actually performing very well, with unemployment at record lows, steady growth, and a general uptick in confidence surrounding the economy. These are all reasons the Pound has risen recently. Before we see a continued rise back to €1.20 however, we need further details on what a UK/EU trade agreement will look like. While this is lacking, I think it's unlikely we'll see rates back at €1.20 in the short term. Longer term should the UK economy continue to perform well, then it is very likely that we'll see a recovery, but that is quite a way off.

Tomorrow we have GDP figures (expected at +0.4%) that could provide further direction for the Pound. If you need to move Pounds to Euros, USD or any other currency, then it is worth considering getting a rate fixed while it's at much higher levels than it has been. We can offer rates that are very close to the actual rates you see on-line. We also offer the facility to freeze the current rate for a future date, so even if you don't need to transfer your funds for a while but don't want to miss out on the current levels, we offer a facility to do just that.

To get a quote or find out more then make an enquiry or drop me an email.

Sterling rallies through 1.41

noreply@blogger.com (Michael) — Wed, 24 Jan 2018 10:34:00 +0000

This morning sterling has rallied to a fresh post Brexit high of 1.4120. It has come back a little to settle in the high 1.40s but still a significant move. We have now seen the pound rally nearly 4.5% in just over a week, this makes a huge difference when transferring a significant sum of money.

To highlight this on a £300k money exchange over the last 10 days would have secured anywhere from $404k to $423k - a huge difference of $19k. This shows how important it can be to make sure you are kept up to date with market trends to try and maximise your exchange and limit your exposure to adverse market movement. As the pound has now rallied against the dollar for the best part of 10 days I would urge caution for any USD buyers as I do feel we could easily see a short term correction.

It is not just against the dollar that he pound has seen some success as we are also close to a two month high against the Euro creating some great opportunities for Euro buyers. Should you need to make an international money transfer and you would like assistance in getting the best exchange rate then please get in touch. Alternatively please email for a live quote.