Tuesday, 19 May 2015

GBP/USD exchange rates fall after poor inflation reading


Good afternoon,

After briefly breaking through $1.58 last week the pound has suffered against the U.S. dollar with GBP/USD exchange rates dropping to $1.5452 during today's session.

The pound fell across the board this morning following the latest UK CPI reading with figures showing that UK inflation has now fallen into a negative state for the first time since 1960.

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However, it is not all doom and gloom for the UK as Bank of England governor Mark Carney still expects the inflation figure to improve and push towards the central bank's target of 2% over the course of the year.

With the current inflation level still seen as only a temporary dip, it shouldn't have much of an impact on investor confidence and if we see some positive numbers from other sectors within the UK, we could easily see the pound recover the ground it has lost over the past few days.

Despite the recent drop for GBP/USD the pound has recovered remarkably well in the last month with rates climbing from $1.45 in April.

In recent weeks most of the gains can be put down to dollar weakness, if the U.S. economy continues to underperform, which in turn pushes back the chances of the Federal Reserve raising interest rates this year I still believe we could see GBP/USD climb back towards the $1.60 mark.

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Tuesday, 12 May 2015

GBP/USD exchange rates break $1.57

Good afternoon,

Following Fridays surge the pound has continued to rise against the dollar this week with GBP/USD exchange rates breaking through the $1.57 barrier for the first time this year.

Last week's surprise UK Election result is still helping Sterling across the board and with the dollar's value dropping this morning after German Bund yields rose 22 basis points, demand for European currencies seems to be rising.

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GBP/USD exchange rate forecast.


During today's session alone the pound has risen nearly a cent and a half, with GBP/USD climbing from $1.5561 to a high of $1.5707.

We have not seen the currency pair at this level since December 2014 and the turnaround we have seen in the past few weeks has been nothing short of amazing.

Since the 13th April (when GBP/USD was sitting at $1.4577) the pound has gained 7.75% against the dollar and the move looks even more impressive when put into monetary terms.

Converting £200,000 into dollars will now see you receive over $22,600 more compared to the same trade last month and highlights just how important timing can be when it comes to moving money overseas.

A couple of weeks ago I said we would see rates push back above $1.55 and with that rate now in the bag I think there is potential for GBP/USD to go even higher.

If the U.S. economy continues to underperform and talk of a September rate hike is shelved I think there is every chance we could see GBP/USD challenge the $1.60 in the coming weeks.

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Friday, 8 May 2015

Election results send the pound soaring

Good morning,

This morning's surprise election result, which has left the Conservatives on the cusp of a majority win, has given the pound a much needed boost following a week of uncertainty.

Prior to this morning's shock announcement GBP/USD exchange rates had slipped over 2.5% since the middle of last week, with the currency pair falling from just shy of $1.55 to 1.5099 on Monday.

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The news that David Cameron would resume his role as Prime Minister for a second term seems to have given investors renewed confidence and pushed the pound up across the board. In a matter of minutes the pound had gained around three cents against the dollar with GBP/USD climbing to a high of $1.5520 in the early hours of this morning.

I am sure we will see some movement over the course of the day as the markets continue to react but as it stands the pound and UK is in a much better position than 24 hours ago.

Shift if focus.


As the dust settles in the UK and the Tories start to celebrate, focus will now return to the U.S and the matter of interest rates.

Over the past few weeks I have mentioned on numerous occasions that the U.S. has been on an awful run in terms of economic data releases. This afternoon all eyes will be on the States again as the U.S release their latest job numbers.

As my regular readers will know the non-farm payroll numbers have the ability to impact the value of the dollar massively. Analysts are predicting that 228K were created last month but as we have seen before this actual figure could be well wide of the mark.

If the jobs reading misses the forecast level the dollar will come under pressure again and I wouldn't be surprised to see GBP/USD back over $1.56 later today.

A weaker jobs number would add to the States recent woes and could dent any chance of rate hike by the Federal Reserve in September, which in turn may weaken the dollar even more.

 

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Tuesday, 5 May 2015

GBP/USD exchange rates start to recover

Good afternoon,

After weaker than forecast UK manufacturing and construction figures dented Sterling's recent recovery, GBP/USD exchange rates were able to bounce back today after the latest U.S. trade balance figures impacted the value of the dollar.

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What a difference a week makes.


Last week saw the GBP/USD cross sitting just shy of $1.55 but after a run of poor economic data releases from the UK the pound tumbled across the board.

This morning saw GBP/USD exchange rates back down at $1.5093 but after the U.S. trade balance figures showed the trade deficit had risen by 43.1% to $51.4 billion (its highest level since October 2008) the dollar weakened and pushed GBP/USD back towards $1.52.

It seems as though the strong dollar has started to weigh heavily on the U.S. economy and will once again raise questions as to when the Federal Reserve will raise interest rates. With expectations of a rate hike pushed back to September, the next few months will be closely monitored and if the U.S. economy continues to suffer then there is every chance a rate rise will be pushed back even further.

Rocky road ahead for the pound.


With the UK election only days away and no clear winner in sight we could see the pound come under some extra pressure this week. If we are left with a hung parliament, the uncertainty surrounding a potential coalition could see the pounds value severely affected.

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Wednesday, 29 April 2015

GBP/USD exchange rate push past $1.54

Good afternoon,

The pound was able to make further gains against the dollar today following another poor economic data release from the U.S.

This time round it was the U.S. Gross Domestic Product (GDP) figure that caused the dollar's value to drop, with figures showing the  U.S. economy only grew 0.2% in quarter one against an estimate of 1%.

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The poor GDP reading helped push the GBP/USD cross above $1.54 with the currency pair reaching a high of $1.5481 this afternoon, and if the Federal Reserve statement has a negative tone this evening GBP/USD could easily break through the $1.55 barrier.

Over the past couple of weeks the dollar has been in free-fall and today's events have completed an amazing turnaround for the pound.

GBP/USD has now gained over 6% since the 13th April, which makes a huge difference to your money transfer.

Put into monetary terms, a £200,000 transfer will now see you receive over $18,000 more compared to the same trade two weeks ago.

Will GBP/USD rates continue to climb?


I mentioned yesterday that I thought rates would climb above $1.55 and I stand by those comments. The way the U.S. economy is currently performing and the upcoming UK election having little impact on the FX market, I believe the GBP/USD will break through $1.55 mark in the next couple of days.

I also think that Greece will come to an agreement with their creditors in the next few weeks. The European Central Bank and IMF have put far too much time and money into the Greece just to let them default and walk away. If an agreement can be reached I can see the dollar losing even more ground, which in turn will push GBP/USD even higher.

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Tuesday, 28 April 2015

GBP/USD exchange rates break through $1.53

Good afternoon,

Sterling continued its march against the dollar with GBP/USD exchange rates climbing nearly a cent and a half during today's trading session, despite a weaker than forecast UK GDP reading earlier today.

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This morning saw the release of the UK's quarter one GDP reading, which showed growth in the UK had slowed with the economy only rising 0.3% against a predicted level of 0.5%.

On the back of the GDP release GBP/USD exchange rates slipped around three quarters of a cent to $1.5175 but quickly recovered, as once again the dollar suffered from another weak data release.

A weaker than forecast U.S. consumer confidence report heaped further misery on the dollar and with investors becoming ever more cautious ahead of the Federal Reserve statement tomorrow, the pound was able to break through the $1.53 barrier to reach a high of $1.5333.

All eyes on the FED


Tomorrow evening will see the Federal Reserve announce their latest interest decision and after the recent poor run of economic data releases, no one is expecting any surprises from Chairwoman Janet Yellen.

As I mentioned yesterday there had been a number of bets on the FED raising rates as early as June. However, that now seems increasingly unlikely and tomorrow's statement will be closely monitored for any clues about when a rate hike might take place.

If it looks as though a rate hike will be pushed back towards the latter part of the year we can expect the dollar to weaken further tomorrow, which could see GBP/USD push towards the $1.55 mark.

 

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As a specialist currency broker I can help you achieve a rate of exchange up to 5% better than those offered by the high-street banks, so to find out what rate I can offer contact me today.

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Monday, 27 April 2015

GBP/USD exchange rates rise again!

Good afternoon,

It has been another positive day for GBP/USD with the currency pair climbing to its highest level since 5th March. With the U.S economy coming under increasing pressure following a run of poor economic data releases and uncertainty surrounding the upcoming UK election seemingly fading, the pound has been able to take full advantage against the safe-haven dollar.

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During today's trading session GBP/USD rose to $1.5259 and coupled with sterling's strong performance last week, the pound has now gained over 4.5% against the dollar since the 13th April when the cross was sitting at 1.4577, its lowest level since June 2010.

Will the pound continue to rise against the dollar?


As we all know the currency markets are almost impossible to predict, but in my opinion there is every chance we will see the pound continue its recent trend and claw back some of the ground it has lost since last summer.

As I have already mentioned the U.S. economy has underperformed in recent weeks and the chances of the Federal Reserve raising interest rates in June now seems unlikely.

There had been growing speculation the FED could raise rates in the coming months but with the strong dollar starting to impact economic growth in the US, we might not see a rate hike until the latter part of this year.

This has led investors and market players to look at other alternatives such as the pound and euro, sparking a dollar selloff and reducing the greenbacks value.

So if the U.S economy continues to underperform, the pound continues to be unaffected by the UK election and Greece can come to an agreement with its creditors then I believe there is every chance we will see GBP/USD back towards $1.55 in the not so distant future.

Best rates of exchange.


If you have an upcoming requirement to buy or sell U.S dollars and want to make sure you are getting the best possible rate of exchange, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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