Monday, 1 February 2016

The pound recovers some lost ground.


Good morning,

After another volatile week the pound has started well this morning regaining most of the ground it lost to the U.S dollar on Friday.

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GBP/USD has risen from a low of 1.4182 which we saw on Friday afternoon to 1.4311 this morning, meaning the pound has clawed back nearly 0.85% within the first couple of hours of today's session.

GBP/USD graph


Why did GBP/USD fall last week?


The U.S. dollar's value climbed sharply on Friday following a surprise announcement from the Bank of Japan.  The BoJ applied a negative interest rate of -0.1% to some selected current account deposits causing investors to seek the safety of the U.S. dollar.

The move from the BoJ is similar to the action taken by the European Central Bank and will see the central bank charge financial institutions for holding funds with them.

We could also see more action from the BoJ in future as the bank said they are willing to push rates further into negative territory if required.

The dollar was also helped by the latest U.S. Gross Domestic Product (GDP) reading on Friday afternoon which fell pretty much in line with the initial estimates. U.S. GDP grew 0.7% in quarter four and despite missing the forecast figure of 0.8% was close enough to prevent the USD losing any ground.

 

Do you need to buy or sell dollars?


If you have a requirement to convert funds either from or into U.S. dollars it is important to know what options are available to you. As a specialist currency broker I can help you target a specific rate of exchange or help or protect you against adverse market movements.

For more information about how I can help 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, 26 January 2016

The pound starts to claw back some ground

Good afternoon,

Since my last post the pound has managed to put a stop to the dollars advances clawing back around two and a half cents. Today alone has seen the GBP/USD cross climb from $1.4176 to a session high of $1.4345 as the graph below shows.

For a free currency consultation click here.

GBP/USD graph


With little out in terms of eco-stats it seems the focus has now turned towards the two day U.S Federal Reserve meeting. Tomorrow at 0700 (GMT) Fed Chair Janet Yellen will announce the central banks latest interest decision, which will be closely followed by her statement.

It is highly unlikely we will see the Federal Reserve implement another rate hike so soon, however it will be the statement which has the potential to cause some volatility in the FX markets.

The U.S. dollar could easily move in either direction tomorrow evening depending on what Chair Yellen has to say.

If the FOMC show any signs of concern following the recent global turmoil, falling oil prices and the possibility of cooling inflation then the dollar's value could easily fall. It will leave the pound in a prime position to take advantage and could push the GBP/USD cross back towards $1.45.

On the other hand if Ms Yellen drops any hints about when the next rate hike might take place and puts a positive spin on the state of the U.S. economy then we could see GBP/USD test the $1.41 mark we witnessed last week.

Contact me today.

If you are thinking of buying or selling dollars in the near future the last few weeks have proved once again just how quickly things can change.

During these volatile times it is more important than ever to know what options are available to help you make the most from your transfer.

As a specialist currency broker I have a number of different tools at my disposal. I can help you target a specific rate or protect you from further adverse market movements. For more information about how I can help or to find out what rate I can offer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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Thursday, 21 January 2016

GBP/USD exchange rate falls below $1.41

Good afternoon,

Today saw the GBP/USD cross drop below $1.41 for the first time since 18th March 2009 hitting a low of $1.4087. After dropping continuously since early December things are not looking great for the pound and with the UK economy coming under pressure there is definitely a chance things could get worse before they get better.
 
For a free currency consultation click here.

In the last six weeks the pound has lost nearly 7.5% against the greenback which can make a huge difference to your currency transfer. If we look at the move in monetary terms, converting £250,000 will now see you receive nearly $28,500 less compared to the same trade on 13th December.



Why could things get worse?

With so much uncertainty surrounding the global economy the dollar has strengthened massively over the past couple of months. Coupled with the Federal Reserve rate hike in December it has given investors an extra incentive to head into the U.S. dollar.

Although recent economic numbers suggest the U.S. economy might be slowing, the view within the market is that we will see at least one more rate hike by the Federal Reserve this year which could help strengthen the dollar even more.

With that in mind and the fact Mark Carney poured cold water on the Bank of England raising rates during his speech on Tuesday the door is wide open for the pound to sustain further losses across the board.

I for one would not be surprised if we saw the GBP/USD cross fall below the $1.40 barrier in the next few weeks. There are no positives on the horizon which I think will help the pound out of this current trend and if the currency pair falls into the $1.30's then it could take months before rates recover.

Do you have a dollar requirement?

If you are looking at buying or selling dollars in the coming weeks or months and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation consultation.

Use the link below or call me directly on 0044 (0) 1442 892 065 to find out more.

Click here to complete the contact form.

   

Tuesday, 19 January 2016

The GBP/USD cross falls to its lowest levels for nearly seven years!


Good afternoon,

It was another torrid day for the pound, especially for those of you who are looking to purchase dollars in the coming weeks or months.

For a free currency consultation click here.

After a brief spike this morning following a better than forecast inflation reading the pound lost even more ground against the dominate U.S. dollar.

Earlier today the Office for National Statistics released the latest Consumer Price Index (CPI) report and there was some good news for the UK economy. Inflation in the UK nudged up from 0.1% to 0.2% and gave the pound a much need boost.

On the back of the CPI report GBP/USD rose around half a cent to reach a high of $1.4333 but to say the gains were short-lived would be an understatement.
 
So what caused the decline?

Sterling suffered on the back of comments made by Bank of England Governor Mark Carney, following his speech the pound went into free fall and lost ground against most of it's major counterparts.

Within a couple of hours the GBP/USD cross had lost the ground it had made during the early part of today's trading session and bottomed out at 1.4135, a loss of nearly 1.35% and the lowest we have seen the currency pair since March 2009.

GBP/USD graph


 
What did Mark Carney say?

Mr Carney has essentially ruled out an immediate rate hike because of the uncertainty and turmoil currently surrounding the global economy and UK growth.

Mr Carney said that with oil prices falling and an "unforgiving" global environment, tightening monetary policy in the UK was not necessary yet. This latest statement is another blow to the UK and pound as it was only during the summer of last year that Mr Carney said a rate rise was on the horizon.

Investors could not take any positives from the speech and quickly started dumping sterling in favour of other currencies, with the U.S. dollar and euro seemingly benefitting.

Do you need to buy dollars in the coming weeks?

If you have a requirement to buy dollars and are concerned about where the currency pair is heading, it vital to know what options you have available. As a specialist currency broker I have a number of tools available to help you make the most from your transfer and protect yourself against further adverse market movements.

For more information 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, 14 January 2016

GBP/USD back over $1.44.....but for how long?

Good afternoon,

Well, it wasn't all doom and gloom for the pound today, the release of the Bank of England minutes and rate decision actually helped the pound......only slightly though.

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For the sixth straight month the Monetary Policy Committee (MPC) voted 8-1 in favour of keeping interest rates on hold. However it was the one vote from Ian McCafferty that helped push the pound back over $1.44 today.

As I have mentioned a couple of times the issues in China and poor UK economic have been weighing heavily on the pound in recent weeks. As a result there was a chance Mr McCafferty would change his stance and vote for rates to remain at the current level.

Fortunately for the pound and all GBP crosses that didn't happen and as the vote and minutes were released GBP/USD climbed from $1.4366 to $1.4444.


But let's not carried away, today's events are not going to push GBP/USD back towards the $1.50 mark. There is still more scope for the pounds value to drop even further and if the Federal Reserve look at raising rates again in the coming months the dollar could easily strengthen.

The UK economy is not out of the woods yet and the UK's inflation is figure is still miles away from the Bank of England's target of 2%.

Today's meeting minutes showed the central bank believe it will take longer than originally thought for the inflation figure to reach the required level and indicated that inflation was likely sit around 0.5% for a number of months this year.

Based this information I think we can safely say we won't see any action from the Bank of England this year, with many analysts predicting a rate hike will now come in the early part of 2017.

As we all know it is impossible to predict which way the markets will move but have seen in the last month how quickly things can change.

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, 13 January 2016

GBP/USD exchange rates recover slightly

Good afternoon,

After a frantic start to the year today has seen the FX markets return to some kind of normality. After falling to a fresh low against the dollar yesterday afternoon the pound managed to claw back some ground during Wednesday's session after tensions eased in China.

For a free currency consultation click here.

Despite a lack of eco-stats the pound was able to climb back over the $1.44 barrier and reached a high of $1.4474, putting an temporary stop to proceedings which have seen the pound lose around 3% since the start of 2016.

GBP/USD graph


What has helped the pound today?


Last week saw investors pour into the U.S. dollar after growing concerns in China, helping the greenback gain across the board. However better than forecast Chinese data today helped to ease fears over the globes second biggest economy, giving the pound a chance to stage a mini revival.

 

So will we see rates push back towards $1.50?


Not at the moment, as I mentioned yesterday there is more scope for the GBP/USD to fall further rather than climb back to the levels we witnessed before Christmas.

Now that the Federal Reserve have raised interest rates and the potential for further hikes this year, the dollar has the potential to gain in value even more in the coming months. Coupled with the fact that the Bank of England are unlikely to increase their benchmark rate this year, the outlook for the pound does not look great.

All eyes in the UK are now focusing on the Bank of England rate announcement and minutes tomorrow afternoon. The result should give us a clear indication to the central banks views on the current state of the UK economy and I for one are not expecting them to paint a pretty picture.

I wouldn't be surprised to see the GBP/USD cross test the lows we saw yesterday and if the MPC vote 9-0 in favour of keeping rates on hold we could see the currency pair fall back towards the $1.42 mark.

 

Contact me today.


If you have an upcoming currency requirement and are concerned about how the pound is performing or want to know how 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.

Click here to complete the contact form.

Tuesday, 12 January 2016

GBP/USD exchange rate falls to fresh low

Good afternoon,

Well that didn't last very long did it!...In yesterday's post I mentioned that the pound had managed a slight recovery against the dollar but twenty four hours later it seems normal business has resumed.

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GBP/USD fell again during today's session with the currency pair falling to a near seven year low.

The pound dropped from $1.4537 to $1.4360, a level not seen since April 2009. It now means GBP/USD has fallen nearly 6% in the last month, which can have a huge impact on your future requirements.

To put the last months drop into monetary terms, converting £250,000 into USD will now see you receive around $21,575 less compared to trade in mid-December.

GBP/USD graph

 

Why has the pound fallen today?


The pound lost ground across the board today after weaker than forecast UK industrial production and manufacturing numbers. Figures released by the Office for National Statistics showed that industrial output had it sharpest fall since the start of 2013, while the manufacturing figure came in at -0.4% after a predicting reading of 0.1% growth.

Will GBP/USD recover?


At the moment there is very little evidence that the pound will start to recover. If anything there is more scope for the rate to carry on falling.

Events in China have caused investors to seek the safety of the U.S. dollar, especially as they now get a higher yield following the Federal Reserve rate hike last month.

We have also seen investors dumping the pound over the past couple of weeks as there is little chance we will see the Bank of England hiking interest rates anytime soon. In fact there have been rumours we won't see the BoE raise their benchmark rate until 2017.

So with the UK economy faltering and chances of a rate rise fading quickly we could see GBP/USD test the $1.40 barrier sooner rather than later.

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.