Wednesday, 16 April 2014

GBP/USD exchange rates break $1.68 again

Good afternoon,

For the second time in a week GBP/USD exchange rates broke through the $1.68 barrier. Trading opened this morning with the currency pair sitting just above $1.6725 but that all changed following the latest UK unemployment numbers being released. Unemployment fell to 6.9% this morning, its lowest levels in nearly five years and the news had an immediate impact on the currency markets. Sterling's value rose across the board, pushing GBP/USD to a high of $1.6814.

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With UK unemployment now below the Bank of England's target rate of 7%, which was part of the central banks forward guidance policy that was issued last year, I am sure speculation will mount as to when the BoE will raise interest rates.

The BoE have always said the 7% target rate would not automatically trigger a rate hike but now that level has been reached it will be interesting to see how Mr Carney and the MPC members approach the subject.

How could this effect exchange rates?

A rise in interest rates will make the pound more attractive for investors, especially with the U.S and Eurozone base rate at 0.25%. With money flooding into the UK the pounds value could potentially rise, pushing Sterling up against the majority of its major counterparts.

So will rates break $1.70?

Potentially yes, any hints of a rate hike or a clear indication of when a rise will take place will add support to the UK and the pound. The U.S. dollar is showing little sign of clawing back any of the ground it has lost in recent months and the UK recovery seems to be back on track.

However, the Bank of England may not let the pound become that strong. The last thing they want is for UK exports to be affected by the rising cost of the pound. The central bank mentioned last week they were happy with where exchange rates were currently sitting but if rates continue to rise they will look to intervene.

As I have said the next couple of weeks are going to be very interesting and we could see rates move in either direct. A lot will depend on what course of action the BoE take but if you need to buy dollars in the coming weeks it is a fantastic time to do so. If you would like more information on the rates I can offer or the different ways you can buy currency, use the link below and complete the contact form or call me directly on 0044 (0) 1442 892 065.

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Monday, 14 April 2014

GBP/USD Monday update

Good afternoon,

It has been a relatively quite day for the GBP/USD cross with exchange rates staying within a 40 pip range. Rates have fallen slightly since last Thursdays high of $1.6820 but with the currency pair trading between $1.6700 and $1.6740 it is still an extremely good time to purchase U.S. dollars.

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There was little to influence sterling/dollar in terms of economic data releases today with only house price figures from the UK and retail sale figures from the States the only numbers of note. Both readings came in slightly higher than forecast but ended up cancelling each other out.  So what could swing rates this week?

 Tuesday The latest UK inflation figures are released today, which historically can impact future UK interest rate policy and has been a key driver for Sterling in the past few months. Stateside. we get inflation numbers and a speech by Fed Chair Janet Yellen. 

Wednesday UK unemployment figures are the main release today, forecast to come in around the 7.1% mark. A lower figure could cause Sterling to rise. In the US we will see the latest industrial production figures and Fed chair Janet Yellen gives another speech.
 
Thursday It’s a quiet end to the week with US jobless claims the only release of note. There is nothing from the UK.

Friday markets are closed for Easter Friday which means there are no major market releases.
 
As I have already said, it is a great time to buy dollars at the moment with rates just below the highest levels we have seen for nearly five years. Will the rates continue to climb? It is impossible to predict but one of the forecasts I got from my brokers this morning hinted at GBP/USD dropping towards $1.63 in the next few months. 
 
This maybe a little optimistic especially as it looks like a interest rate rise in the U.S. has been put on the back burner. If rates do drop though it can make a massive difference to the amount of dollars you would receive, that is why it is so important to know what tools are available to help make the most from your transfer.
 
If you need to buy or sell dollars in the coming weeks or months and want to ensure you are protected from any adverse market movements, use the link below and complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.
 
 
 
 

Thursday, 10 April 2014

GBP/USD exchange rates hit fresh high

Good afternoon,

Sterling has continued to rise against the dollar in the last 48 hours following dovish comments from the U.S. Federal Reserve. GBP/USD exchange rates surged last night from $1.6730 to $1.6820 taking the currency pair to its highest level since August 2009. The latest rise in rates mean the cross has now gained over 1.5% in the last seven days making it an extremely attractive time to purchase U.S. dollars.

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What did the FED say?

A couple of weeks ago I mentioned the FED had hinted at an interest rate rise once the on-going stimulus package comes to an end. If the FED continue to taper at their current rate, the bond buying programme will finish in October and the news of a rate hike looked very appealing to investors.

Any chance of a rate rise this year seem to have be scrapped following comments last night. It now looks like the earliest we will see any movement will be the end of 2015. This news lead to investors pulling out of the dollar and looking at alternatives such as Sterling, Yen and Swiss Franc.

The dollar did recover slightly during trading today as better than expected unemployment claims help boost the U.S. economy. Claims fell by 32K from last week but the good news only helped   bring the GBP/USD cross back to $1.6775.

If you have a requirement to buy or sell dollars in the coming months and want to make the most of currency, 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.

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Tuesday, 8 April 2014

GBP/USD exchange rates break $1.6750

Good afternoon,

Well, what a difference a day makes. In yesterday's post I mentioned the GBP/USD cross had remained between $1.65 and $1.66 for the last few weeks as the UK and U.S. economies had failed to deliver on what had been forecast. That all changed this morning and the result had an immediate impact on the rate of exchange, both UK manufacturing & industrial production beat their initial forecasts by 0.7% and 0.6% respectively. On the back of the releases GBP/USD rose from $1.6610 to $1.6753, a gain of almost 0.9% leaving the cross at its highest levels since 7th March.

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The gains for the pound could continue tomorrow as the Bank of England (BoE) hold their latest monetary policy meeting. If Mark Carney and his fellow MPC members offer any indication that the UK economy is performing better than expected and maybe hint at an interest rate rise, we could see investor confidence push Sterling up across the board.

A positive message from the BoE means rates could rise back towards the highs we witnessed in February when GBP/USD was knocking on the door of $1.68. It is not only the BoE statement that could swing rates though, tomorrow afternoon we will see the latest U.S. unemployment claims and the numbers tend to cause some volatility to the currency pair.

I will keep updated with what happens but in the meantime if you have a requirement to buy or sell dollars in the coming weeks and want to make the most from your transfer, 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, 7 April 2014

GBP/USD exchange rate update

Good afternoon,

It has been a relatively quite day in terms of economic releases, with no data from at all coming from the UK, U.S. or Eurozone. That being said Sterling still managed to climb back over $1.66 this afternoon following a late rally from the dollar on Friday afternoon which saw GBP/USD exchange slip back to $1.6570.

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Over the last couple of weeks the GBP/USD cross has remained relatively flat, in fact, since 25th March Cable has been trading between $1.65 and $1.66. The UK economy as been growing steadily, though the recovery has slowed in recent weeks, meanwhile, the U.S. are still failing to deliver a string of positive data releases and this was highlighted on Friday by the weaker then expected job numbers.

Based on the recent results it is hard to see when and how the dollar will find the strength to fight back. As I have said before the dollar lost around 13% against the pound in the last nine months and unless things improve quickly I cannot see rates pushing back towards $1.60 anytime soon.

Even last months efforts by the FED failed to leave a lasting impression, another round of tapering and talk of a rise in interest rates helped the dollar for all of about 48 hours before the pound managed to recover.

It will be interesting to see how the FED approach monetary policy when they meet again towards the end of the month. Could the FED announce another cut to stimulus and be give a clearer indication of when a rise in rates may take place? Lets hope so, as the last few months have not been the best for anyone looking to sell the U.S dollar.

Do you have a requirement to buy or sell dollars in the coming months and want to ensure you are getting the best rate of exchange? If the answer is yes, use the link below to complete the contact form or contact me directly on 0044 (0) 1442 892 065 for a free, no-obligation currency consultation.

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Friday, 4 April 2014

Sterling fights back after weaker U.S. job numbers

Good afternoon,

Sterling staged a mini fight back today as the GBP/USD cross climbed back to $1.66 this afternoon. With no economic data releases of any note coming from the UK the pound was at the mercy of events is the U.S. Luckily for Sterling, the U.S job numbers and unemployment figures failed to meet expectations forcing exchange rates from $1.6557 to $1.6603 in a matter of seconds.

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Once again the U.S job numbers (non-farm payroll) caused instant movement in the FX market. Analysts had been hoping the warmer weather would lead to more jobs being created in March and with a forecast number of 199K there were high hopes the reading would come in even higher. When the report was released at 13.30 GMT it showed the actual figure was 191K meaning the jobs sector has now missed its target three times in the last four months.

Today's figures will be another dent in the armour of the U.S. Federal Reserve who are looking for continued improvements in the U.S. economy in order to keep up with their current tapering efforts. A positive reading today could have easily seen GBP/USD back into the $1.64's but once again the dollar was unable to take advantage.

What could impact rates next week?

Monday – A quiet start to the week with no major releases from the U.S or UK.

Tuesday Manufacturing data and a GDP estimate from the NIESR for the UK. New job openings and talks from two of the FOMC members from the U.S

Wednesday Trade balance data from the UK. Crude oil inventories, a treasury auction and minutes from the latest FOMC meeting from the US.
 
Thursday The BOE announce their latest decisions on interest rates and quantitative easing followed by a rate statement from the MPC. Unemployment data, import prices and a monthly treasury statement from the US. The G20 meeting begins in Washington DC attended by central bankers and financial ministers from 20 countries their initiatives can have an effect on currency markets.    

Friday Again, no major releases from the UK. Inflation data and a consumer sentiment survey from the US. The G20 meetings conclude 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 you currency transfer, 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.

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Thursday, 3 April 2014

U.S. dollar strengthens following comments by ECB


Good afternoon,

After recovering slightly overnight Sterling lost more ground against the dollar as comments from the European Central Bank (ECB) Chairman Mario Draghi caused investors to seek the safety of the greenback. When trading opened this morning GBP/USD exchange rates were sitting around $1.6660 (recovering from $1.6627 yesterday afternoon) but ended the day trading almost a cent lower at $1.6571.

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What caused todays fall?

The day did not start well for the UK or the pound as the latest Services PMI figures failed to meet expectations, forcing sterling to lose ground across the board. On the back of the news Sterling fell around 40 pips, falling to $1.6620 and the decline
 did not stop there. The dollar took full advantage of the comments made by Mr Draghi, he indicated the ECB would not rule out further monetary policy easing and that interest rates will remain at their current or lower levels for the foreseeable future.

The comments lead investors to seek the safety of the dollar which in turn strengthened the currency, pushing the GBP/USD cross back under $1.66. Todays gains by the dollar could have be seen as fortunate, if it had not been for Mr Draghi's comments we may have seen Sterling claw back the ground it lost this morning as the U.S. unemployment claims unexpectedly rose and the trade balance figure widened.

However, that's all if's and but's, which is often the case when it comes to the FX market. All eyes will now turn to tomorrows U.S. job numbers and if the number is positive I wouldn't be surprised if we saw the GBP/USD cross back into the $1.64s.

If you have a requirement to buy or sell dollars in the coming weeks and would like to make the most of your transfer then there are a couple of ways to contact me. Use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation currency consultation.

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