Thursday, 20 November 2014

Positive day for the pound


Good afternoon,

As I mentioned in yesterday's post today was fairly heavy on the data front and as a result the releases led to another choppy day for the GBP/USD cross.

For a free currency consultation click here.


After opening today's session at $1.5637 the pound got off to a good start as French, German and Euro Manufacturing all missed target, with the news sending sterling/dollar up around a quarter of a cent. The pound was then given another boost as UK retail figures came in at 0.8% against a predicted level of 0.4%, giving the pound some much needed support following last week's inflation report.

The gains for sterling did not stop there though as this afternoon saw a number of key releases from the States. To start we had U.S. unemployment claims and core CPI figures. Unemployment claims came in 5K higher than forecast and there was no change to the CPI numbers which came in on forecast at 0.2%. The weaker figures had an immediate impact on the dollar's value and pushed GBP/USD exchange rates over $1.57 for the first time since Monday, reaching a high of $1.5731.

However, any gains for the pound were extremely short-lived as later this afternoon saw the release of the Philly FED Manufacturing index. The manufacturing sector is seen as leading indicator of overall economic health and with today's figure coming in at 40.8 against a predicted level of 18.9 the dollar was able to fight back and push exchange rates back below $1.57, settling around $1.5680 at the time of writing.

The UK and U.S. economies seem to be neck and neck at the moment and unless something drastic happens it is difficult to see rates moving massively in either direction. As I have said before I think a lot will depend on which central bank acts first in regards to interest rates but that won't be until the middle of 2015 at the earliest. As a result we may see GBP/USD rates bounce between $1.56 and $1.59 for the next few week's, reacting to the daily economic data releases just like today.

If you have a requirement to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.

Wednesday, 19 November 2014

Bank of England minutes save Sterling


Good afternoon,

It looked like Sterling was in for another difficult trading session this morning as GBP/USD exchange rates hit a fresh low of $1.5593 in the build up to the release of the Bank of England meeting minutes.

For a free currency consultation click here.

Fortunately for Sterling the minutes showed that two of the Monetary Policy Members (MPC), Ian McCafferty and Martin Weale, voted to raise interest rates in the UK for the third straight month. The announcement had an immediate impact on the currency markets and helped push the GBP/USD cross up by a cent over the course of the day, reaching a high of $1.5694 before settling around $1.5670.


As I mentioned yesterday, if there had been a change to the overall vote the knock-on effect to Sterling could have been huge. Over the last three months the vote on interest rates has remained at 7-2 in favour of keeping interest rates at their current level.  Those two votes to raise interest rates have given the pound a boost in recent months and if this morning's minutes had shown Mr McCafferty or Mr Weale had jumped back on the bandwagon to keep rates on hold, the pound would have suffered massively.

What could impact exchange rates tomorrow?

Tomorrow is pretty heavy on the data front with a number of economic data releases coming from either side of the pond. In the UK we will see the latest retail figures, while from the U.S. we will get manufacturing numbers, inflation figures, unemployment claims and existing home sales. There are also a number of manufacturing numbers coming from the Eurozone. All of the above the ability to cause some volatility in the currency markets depending on the results.

If you have a requirement to buy or sell dollars and want to ensure you are making the most of your transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.

Tuesday, 18 November 2014

GBP/USD avoids further losses.

Good afternoon,

With UK inflation figures coming in higher than forecast this morning the GBP/USD cross finally put a stop to its recent decline. Over the past week the pound has lost over 2% against the dollar with exchange rates sliding from 1.5932 to 1.5609 but with CPI figures coming in 0.1% higher than anticipated at 1.3% there was finally some good news for the UK and Sterling.

For a free currency consultation click here.


As you can see from the graph above today's trading session has been fairly choppy with GBP/USD exchange rates bouncing between $1.5635 and 1.5680. The pound initially found some support following the UK inflation figures but was unable to sustain the gains throughout the afternoon as the U.S produced some positive economic figures to help boost the value of the dollar.

Better than forecast PPI month on month, Core PPI and an improvement to the NHAB housing market index, meant the gains made from by the pound this morning were quickly wiped out.

What could impact rates tomorrow?

It is another big day for the UK and Sterling tomorrow as the Bank of England release the minutes from their MPC meeting two weeks ago. We know the central bank left interest rates at 0.5% but if there is any change to the 7-2 vote we have seen over the last few months we could witness some volatility to the currency markets.

I think its unlikely we will see any change to the number of MPC members voting in favour of rate hike, especially after Mark Carneys comments last week. However, if the vote changes to 8-1 or 9-0 in favour of keeping rates on hold the pound could come under some serious pressure tomorrow morning.

If you have a requirement to buy or sell dollars in the coming weeks or months and want to ensure you are making the most from your transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.



Monday, 17 November 2014

Sterling still dropping

Good afternoon,

Since my post on Thursday the pound has continued to fall against the U.S. dollar leaving the cross hovering around $1.5650. The Bank of England's inflation report last week is still having an impact on Sterling's value and it could get worse tomorrow morning when the UK's latest inflation figures are released.

For a free currency consultation click here.


At 9:30 GMT tomorrow the office of National Statistics will release the latest CPI (Consumer Price Index) year on year figures. Over the past few months inflation in the UK has been steadily declining, putting an end to any chance of an interest rate rise from the BoE in the immediate future. All eyes will be on tomorrow's inflation number and the UK will be looking to avoid a decline for the fourth straight month.

Inflation in the UK currently stands at 1.2%, 0.8% off of the BoE target figure of 2% and if we see a drop tomorrow the value of pound is going to be seriously affected. Last week BoE Governor Mark Carney hinted the central bank are anticipating that inflation will drop below 1% in the next six months so a drop could be partly priced into the market already. The danger for Sterling though is if we see inflation below 1% less than a week after Mr Carney's comments, the pound could easily go into free fall.

If you are thinking of buying or selling dollars in the coming weeks and are worried about economic events impacting the value of your transfer get in touch today for a free, no-obligation consultation. We can then put in place a strategy to protect you against adverse market movements and target a rate that might not be currently available.

To contact me today use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.

Thursday, 13 November 2014

Sterling still reeling from Bank of England annocument

Good afternoon,

It has been another difficult day for Sterling with the pound still feeling the force of yesterdays inflation report and comments from Bank of England Governor Mark Carney. Since my post yesterday the GBP/USD cross has fallen another cent and this afternoon reached a low of $1.5702, the lowest we have seen the currency pair since the 10th September 2013.

For a free currency consultation click here.


What does todays move mean for my transfer?

A cent drop might not sound like much but it can certainly make a big difference to your transfer, especially if you are purchasing dollars. To put the move into monetary terms a transfer of £200,000 will now see you receive around $1,900 less compared to the same trade 24 hours ago.

With exchange rates now sitting at their lowest level for fourteen months it is also a great opportunity for anyone looking to sell dollars, since the end of June rates have fallen from $1.72 which now means converting $200,000 back into Sterling will see you receive over £11,000 extra.

Unfortunately no one has a crystal ball when it comes to the currency markets and the last few months have shown just how quickly things can change. The one thing I try to tell people who are thinking or buying or selling dollars is - make sure you know what tools are available to help you make the most from you transfer.

So in today's post I am going to give you a run down of the different types of currency contract that could help save you thousands of pounds.

1. Spot contract

The spot contract is the quickest, easiest and most popular way to buy and sell currency.  You simply exchange one currency for another, whenever you need it.

2. Forward contract

forward contract can help protect you from market volatility and is useful for managing your budget.  You can set the price now for a transaction that will take place up to two years in the future, allowing you to fix the exact value of the currency to be paid regardless of market fluctuations.

3. Limit order

With a limit order you specify the exchange rate you are hoping to achieve – a price that may not be currently available.  Your currency will automatically be purchased if the market exceeds this rate, meaning you get the price you want.

4. Stop loss order

stop loss order instructs your broker to buy if the exchange rate goes down to a pre-determined level.  When combined with a limit order, you can hold out for a better rate while protecting yourself from a sudden fall in the market.

For more information about the types of contract or to find out what rates of exchange I can offer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.

Wednesday, 12 November 2014

GBP/USD exchange rates drop to fresh low

Good afternoon,

Following comments this morning from Bank of England (BoE) Governor Mark Carney the pound fell across the board and left the GBP/USD cross at its lowest level since September 2013. During this mornings quarterly inflation report Mr Carney announced the BoE expect inflation in the UK to drop below 1% in the next six months and gave a three year window for inflation to get back to their target level of 2%.

For a free currency consultation click here.


The news has an immediate impact on the currency markets with GBP/USD falling nearly a cent and half and to leave the currency pair trading at $1.5812 the lowest we have seen exchange rates for well over a year.

Sterling could have suffered from further loses had it not been for some positive news in relation to wage growth and employment numbers in the UK. For the first time in five years growth in pay for the UK workforce overtook inflation and with unemployment down by 115,000 on the previous quarter it may give the BoE the support it needs to justify an interest rate rates at some point next year.

With GBP/USD dropping today it means the pound has now lost around 8% against the dollar in the past few months which is great news for anyone looking to convert dollars back into Sterling. The next few months are going to be very interesting for GBP/USD as investors try to gauge who out of the BoE and Federal Reserve will raise interest rates first.

I am sure we are going to see some swings in the exchange rate until a rate hike is announced, so if you are thinking of buying or selling dollars in the coming months it is important to know what your options are. To ensure you are making the most from your transfer and protecting yourself against adverse market movements, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.

Click here to complete the contact form.
 
 

Monday, 10 November 2014

GBP/USD exchange rates remain close to one year low


Good afternoon,

It has been a quiet start to the week in terms of economic data releases and as a result there were no major surprises in the currency market today. However, that didn't stop the dollar gaining against the pound and over the course of today's session GBP/USD exchange rates fell over half a cent, leaving the currency pair perilously close to a fresh one year low.

For a free currency consultation click here.


What to watch out for this week.

There are a number of key releases and speeches later in the week that could have an impact on the value of the pound and dollar. The first release of any real note will come from the UK on Wednesday when we see the Bank of England (BoE) inflation report and a speech from BoE Governor Mark Carney.

The inflation report will be monitored closely as it provides the BoEs projections for economic growth and inflation for the next two years and ultimately influences their interest rate decision. With the UK's last inflation reading coming in at 1.2% we have already seen a potential rate hike pushed back until the middle of next year but if Mr Carney provides any clues on Wednesday about when the rate rise will take place it could give the pound a little push.

Over in the States, the first real data of note comes on Friday in the form of manufacturing and core retail sales, both have ability to sway the value of the dollar and with improvements expected in both sectors we could see the dollar make further gains against the pound.

If you have a requirement to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

Click here to complete the contact form.