Wednesday, 21 January 2015

GBP/USD exchange rates fall back below $1.51

Good afternoon,

The pound suffered at the hands of the Bank of England today after the minutes from their January meeting showed all nine MPC members voted in favour of keeping interest rates on hold. The minutes had an immediate impact on the pounds value with the GBP/USD cross falling around a cent from $1.5180 to $1.5080.

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For the first time since July all nine of the central bank's policymakers voted in favour of keeping the benchmark rate at its current level. With inflation in the UK falling to its lowest level in 14 years last month, MPC members Mr Weale and Mr McCafferty have now changed their stance amid fears a rate rise could cause below target inflation to continue.

An interest rate hike in 2015 now looks even less likely for the UK and leaves the U.S in pole position to act first. This doesn't necessarily mean the dollar will have everything its own way this year though. The UK economy could actually benefit in the long term as people continue to take advantage of cheap borrowing, which in turn boosts the housing and retail sectors, which in turn increases the value of the pound.

Big day for the European Central Bank.

Tomorrow will see the European Central Bank hold a press conference where it is widely anticipated Mario Draghi will announce a hefty stimulus package. It is rumoured we could see a U.S style stimulus programme which will see the ECB purchase €50 billion worth of bonds every month for the next two years.

The result of Mr Draghi's announcement is sure to have an impact on the FX markets. So if you are looking to buy or sell dollars in the coming weeks or months and want to ensure you are making the most from you transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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Monday, 19 January 2015

GBP/USD exchange rate update.

Good afternoon,

Following the shock announcement from the Swiss National Bank (SNB) last week the FX markets returned to a level of normality today. Despite the continued turmoil surrounding Switzerland and Europe the pound maintained its ground against the U.S dollar, spending most of today's session within a 40 pip range. The currency pair opened this morning at $1.5119 but quickly climbed and spend the rest of the day bouncing between $1.5180 & $1.5140.

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With the U.S markets closed for Martin Luther King day and no data releases coming from the UK today's trading session was always going to fairly quiet one. The rest of the week will be different though, with a string of economic numbers and key announcements coming from the UK, U.S. and Eurozone.
 
What to look out for this week
 
Tuesday

Another fairly quiet day in terms of data releases with nothing of note coming from the UK. Later in the afternoon there is a speech from FOMC member Jerome Powell is due to deliver a speech at an event in Washington called "Making Markets Fair and Effective for All". FOMC members public appearances are often closely monitored as their engagements are used to drop subtle hints about future monetary policy.

Wednesday

Should be a busier day for the FX markets with Average Earning and Claimant Count figures coming from the UK. The Bank of England will also release the minutes from their January meeting, though they are unlikely to provide us with any surprises. In the afternoon we will see the latest Building Permit and House Starts from the U.S.

Thursday

Potentially the biggest day of the week as the European Central Bank (ECB) are due to hold a press conference and it is widely anticipated ECB President Mario Draghi will announce a €500 billion stimulus programme. The announcement could impact the value of the pound and dollar and cause some market volatility.

Friday

A quiet end to the week with the only releases of note coming in the form of Retail figures from the UK and Flash Manufacturing from the U.S.

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

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Wednesday, 14 January 2015

GBP/USD exchange rates back over $1.52.

Good afternoon,

GBP/USD exchange rates climbed back over $1.52 during today's sessions after the latest U.S. retail figures failed to meet forecast. Just before the retail figures were released the currency pair were sitting around $1.5175 but with the retail sector contracting by 0.9% in December the pound was able to take full advantage, rising nearly a cent to reach a high of $1.5266.

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Today's rise now sees the pound sitting at its highest level against the dollar since the 6th January and means GBP/USD has now climbed over two cents from the 18 month low we witnessed last week. Any chance of the exchange rate dipping below $1.50 seem to have passed (for the time being at least) as not even yesterday's record low inflation reading from the UK could help the dollar.

With most things now priced into the market, talk of interest rate rises, low oil costs, exits from the Eurozone and extravagant quantitative easing programmes from the European Central Bank are less likely to drive exchange rates over the next few weeks.

What could move rates for the rest of this week?

There is no real data of note from the UK for the latter part of this week so the pound is going to be at the mercy of events in America. The States have a number of key releases over the next two days and as today retail figures have shown things can quickly change.

Things to look out for tomorrow include the latest U.S. Producer Price Index figures, weekly unemployment claims and Manufacturing numbers, while on Friday we will see the latest Consumer Price Index figures and Consumer Sentiment.

All have the ability to have an impact on the dollar's value, so 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.

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Monday, 12 January 2015

GBP/USD exchange rates remain at $1.51

Good afternoon,

GBP/USD remained relatively flat during today's session, spending the majority of the day within a 40 pip range. Despite U.S. job numbers improving on Friday there is still concerns over the level of wage growth, which is the main reason why the GBP/USD cross has moved away from its 18 month low and climbed back above $1.51.

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It has been a quiet start to the week in terms of economic number from the UK with nothing being released today. FOMC member Dennis Lockhart is due to speak at the Rotary Club in Atlanta later today and could lead to some movement in the FX market. When members of the Federal Reserve speak in public their comments are often scrutinised as they tend to drop subtle hints about future monetary policy.

Following the release of the Fed's minutes last week we already know an interest rate rise is unlikely to happen before April. However, if Mr Lockhart is upbeat about the state of the U.S. economy and hints at when the Fed will raise interest rates we could see the dollar strengthen.

As I have said on a number of occasions over the past few months it is a two horse race between the U.S and UK's central banks to who will raise interest rates first and at the moment the U.S are drawing clear.

Although it has been quiet start there are a number of key data releases from both sides of the pond throughout this week. I will keep you updated on how they impact exchange rates.

In the meantime, 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.

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Thursday, 8 January 2015

GBP/USD exchange rates drop to fresh 18 month low


Good afternoon,

Following the release of the latest FOMC minutes last night GBP/USD exchange rates slipped to a fresh 18 month low this morning of $1.5036. However, the pound finally managed to bring an end to its recent decline against the dollar and managed to break back above $1.51 this afternoon.

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Bank of England keep rates on hold.

As expected the Bank of England kept interest rates at the record low of 0.5%, the level the benchmark rate has been sitting at since 2009. With a slowing economy and the political uncertainty currently facing the UK ahead of this year's elections, a potential interest rate rise from the central bank now seems unlikely to happen in 2015.

The BoE's decision not to raise interest rates is the one of the key reasons behind the pound losing so much ground against the dollar in the last six months. Meanwhile the dollar is benefitting from a buoyant U.S. economy and is currently sitting at a nine year high against most of its major counterparts.

Although last night's FOMC minutes showed a rate rise is unlikely to come before April, there is every chance we will see the Federal Reserve take some action this year. If Fed Chair Janet Yellen drops some positive hints over the next few months about when a rate hike could happen there is every possibility the GBP/USD cross could fall into the mid $1.40's in the not too distant future.

If you have a requirement to buy or sell dollars and want to make the most from your transfer, it is more important than ever to know what options are available to you.

By using the link below to complete the contact or calling me directly on 0044 (0) 1442 892 065, I can talk you through different types of currency contracts which can help protect you against adverse market movements and reducing your exposure to the ever changing FX market.

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Tuesday, 6 January 2015

GBP/USD exchange rates continue to fall

Good afternoon,

The pound continued to fall against the dollar today after figures this morning showed the UK's services sector had fallen in December to its lowest levels since May 2013. The news had an immediate impact on the GBP/USD cross with exchange rates dropping to $1.5154 during todays session.

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Today's decline means the pound has lost nearly 4% against the U.S dollar since the 17th December and a staggering 12% since the six year high we witnessed back in July. With the UK economic recover slowing, investors favouring the safety of the dollar and the U.S Federal Reserve leading the race to raise interest rates, I wouldn't be surprised to see the dollar's value increase further over the next couple of months.

To put the move we have seen over the past six months into monetary terms, converting £200,000 into dollars will now see you receive nearly $41,000 less than in July and with things potentially getting worse before they get better it shows the importance of getting the timing right on your transfer.

As a dedicated currency broker I have a range of tools at my disposal that can help you on the timing side of things and reduce your exposure to the ever changing currency markets. So if you have a requirement to buy or sell dollars and want to make the most from your funds, 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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Monday, 5 January 2015

GBP/USD exchange rates close to 18 month low

Good afternoon and Happy New Year to everyone.

Today is the start of the first full weeks trading of 2015 and it has not started well for the GBP/USD cross. Trading opened this morning with GBP/USD sitting just above $1.53 but over the course of today we witnessed a surge in the dollars value which has left Cable sitting close to an 18 month low of $1.5208.

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On Friday UK manufacturing fell to its lowest levels for 3 months and with this mornings figures showing the UK's construction sector also contracted in December, the pound has found itself immediately on the back foot, unable to shake of the advances of the improving dollar.



Why has the dollar been gaining so much ground against the pound?

Its mainly down to interest rates. The U.S. economy has been performing well in recent months and with the UK struggling with poor inflation numbers and weak wage growth it looks as though the FED will start raising interest rates before the Bank of England.

The U.S. dollar is also seen as a safe-haven, with so much uncertainty in the Ukraine and Middle-East, coupled with the issues surrounding Russia and the price of oil we are witnessing a flight to safety which in turn is strengthening the greenback.

This week's data releases which could impact GBP/USD

Tuesday - A quiet day for the UK with only data of note coming in the form of Services PMI. The afternoon could see some volatility for GBP/USD with the U.S releasing it latest Factory orders and Manufacturing numbers.

Wednesday - Nothing to write home about from the UK today but in the States the Fed will release the minutes from their last meeting, there is also Trade Balance figures and Mortgage approvals.

Thursday - Potentially a big day for the UK and the Bank of England announce their latest interest rate decision, a hike is unlikely but any comments from Governor Carney could have an impact on the pounds value. In the afternoon we will see the latest jobless numbers from the States.

Friday - Probably the biggest day of the week in terms of data releases. From the UK we will get the latest Trade Balance and Industrial and Manufacturing Production figures. The U.S will provide us with their latest Non-Farm Payroll figures, there is also Unemployment numbers and a GDP estimate.

If you have an upcoming requirement to buy or sell dollars 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.