Sterling reaches eight month month high vs the dollar, what next for the pound?

Sterling broke through the $1.63 on Monday morning and peaked at $1.6304, an eight month high against the U.S dollar. Investors still view sterling as the best of a bad bunch as the single currency (Euro) and the U.S dollar continue to come under increasing pressure.

As I mentioned last week, the rise of the pound has come as a bit of a surprise considering the UK slipped into recession following the GDP data release last Wednesday. Over the next few weeks further negative data could lead to the Bank of England extending its Quantitative Easing programme. This would see the sterling reduce in value and see investors head back to the U.S dollar.

As sterling broke through the $1.63 barrier the U.S dollar slipped to a two month low against a number of currencies, mainly due to weak U.S growth data released on Friday. This has added to expectations the Fed could extend its U.S monetary policy.

Later this week we have a number of data releases coming from the U.S which could add extra weight to an already heavy load. Tuesday sees Construction Spending, vehicle sales, Manufacturing, and the first of two speeches from FED chairman Ben Bernanke. Wednesday will see employment data, mortgage applications and factory orders. On Thursday there is the second speech from the FED, while on Friday, average earnings and the latest unemployment rates is released. We will also see Non-Farm Payrolls, which often causes volatility for GBP/USD rates.

I will keep you posted of how the data affects the pound/dollar cross but if you need to buy or sell dollars over the next few days or would like to discuss how to reduce the risk of the currency markets click here to send me a direct email or complete the contact form on the homepage of the blog.

Pound/dollar exchange rate weekly overview

What a week it’s been for the pound/dollar cross, after Wednesdays news that the UK slipped back into recession cable jumped to its highest levels for seven months to $1.6230 as the graph below shows. Dollar weakness was the main driver as Fed Chairman Ben Bernanke left the door open for further monetary stimulus.

After a relatively stable start the week the GDP data release on Wednesday saw Sterling fall away as the UK economy fell back into recession. As the data was released rates fell from $1.6160 to 1.6080 before recovering throughout the day and pushing back over the $1.61 mark.

The UK economy slipped back into recession after contracting by 0.2% during the first three months of 2012. A recession is described as two consecutive quarters of contraction and the recent results follow on from the fourth quarter of 2011 where the economy dropped by 0.3%.

The news that the UK economy had shrunk for a second consecutive quarter came as a bit of a surprise, over the last few weeks we had seen a batch of positive data support claim that the UK could avoid the double dip. However, a fall in construction output was believed to be the reason behind the unexpected contraction.

You would think that the UK heading back into a technical recession would have led to further losses for the GBP/USD cross. But With U.S unemployment being so high it was always likely that Mr Bernanke would keep the door open for further monetary stimulus; these thoughts were also supported by the US data release that core durable goods orders contracted by 1.1% when the forecast had been for 0.6% growth.

On the back of the Fed Chairman’s speech Sterling climbed to its highest level for more than seven months against the dollar, Mr Bernanke said that U.S monetary policy was “more or less in the right place” but the central bank would not hesitate to enter into another round of quantitative easing if the U.S economy were to weaken.

It seems the UK has bounced back from Wednesdays news as data released towards the end of the week showed that UK consumer confidence reached a nine-month high in March, according to the Nationwide Building Society, the confidence index increased to 53, up nine points from February.

There is so much uncertainty surrounding the U.S and UK economy, getting the timing right on your currency transfer remains critical, if you are buying or selling dollars in the coming months you can contact me by completing the contact form on the homepage of the blog or click here to send me a direct email.

Exchange rates rise as Sterling hits 7 month high against the US dollar

Sterling climbed to its highest level for more than seven months against the dollar on Thursday, despite Wednesday’s news that the UK has fallen back into a recession. Sterling rose to $1.6208, a level not seen since September last year, before falling back to $1.6186 at the time of writing,

The latest rise for the pound/dollar rates is down to dollar weakness rather than sterling strength. In yesterdays blog I mentioned Fed Chairman Ben Bernanke could leave the door open for further monetary stimulus when he spoke on Wednesday afternoon, this view was justified as Mr Bernanke said that U.S monetary policy was “more or less in the right place” but the central bank would not hesitate to enter into another round of quantitative easing if the economy were to weaken.

It seems the UK has bounced back from yesterday’s unexpected news the economy contracted 0.2% and slipped back into recession. Data released on Thursday morning showed that UK consumer confidence reached a nine-month high in March, according to the Nationwide Building Society, the confidence index increased to 53, up nine points from February.

As the GBP/USD cross continued to gain through the day, I had a number of clients locking into rates to ensure they do not miss out on the current highs. You too can book your rate of exchange using a Forward Contract and protect yourself from any adverse market movements. If you would like to know more about Forward Contract or need to buy or sell U.S dollars you can click here to send me a direct email or complete the contact form on the homepage of the blog.

How will the UK falling back into recession effect the pound/dollar cross?

Wednesday saw Sterling fall away from the recent highs against the dollar as data indicated the UK economy had fallen back into recession. As the data was released rates fell from $1.6160 to 1.6080 before recovering throughout the day and pushing back over the $1.61 mark.

The UK economy slipped back into recession after contracting by 0.2% during the first three months of 2012. A recession is described as two consecutive quarters of contraction and the recent results follow on from the fourth quarter of 2011 where the economy dropped by 0.3%.

The news that the UK economy had contracted for a second consecutive quarter came as a big surprise, over the last few weeks we have seen a batch of positive data support claims that the UK will avoid the double dip. However, a fall in construction output was believed to be the reason behind the unexpected contraction.

You would think that the UK heading back into recession would have led to further losses for the GBP/USD cross. But with Fed chairman Ben Bernanke due to speak later in the day, it is widely expected he will strike a dovish tone when it comes to the US economy.

With US unemployment being so high it is likely that Mr Bernanke will keep the door open for further monetary stimulus, these thoughts would have been supported by the US data release that core durable goods orders contracted by 1.1% when the forecast had been for 0.6% growth.

There is so much uncertainty surrounding the U.S and UK economy, getting the timing right on your currency transfer remains critical, if you are buying or selling dollars in the coming months click here to send me a direct email or complete the contact form on the home page of the blog.  

The Pound continues to gain against the Dollar in 2012

Last week saw the Pound continue its bullish start to 2012 against the Dollar, with the enticing level of $1.60 tangibly close as a trading level to buy. A string of positive data releases in the UK allowed the pound to flex its muscles throughout the week, with several choppy trading sessions representing fantastic buying opportunities as well as a few selling opportunities for those who got their timing right.

Many people had wondered whether the surge in rates would continue in the back drop of an improving US economy, thinking, and not illogically, that the Dollar would strengthen with economic growth. Perhaps however, US growth is exactly what is supporting the Pound in its rise against the Dollar?

Regular readers of this report will be keenly aware of the phrase ‘safe haven currency’. The US Dollar has benefited from this throughout the global recession, with investors seeking low risk investments where their money would at least be safe, even if it wouldn’t grow. With the US economy still the largest in the world people ploughed funds into the Dollar through cash and low yield bonds to see out the storm and subsequently the Dollar strengthened massively; remember the 1.36 ‘s  back in 2009? Indeed even through the mildly positive 2011 we entered this New Year with the pound struggling in the low 1.50’s with the real changes seen amid the positivity in the US economy in 2012. Droves of previously risk averse investors have sold their bonds and got out of cash and back in the hunt for yield, unsurprising then that the Dollar is now testing levels in the early 1.60’s.

So, great news then if you are looking to buy Dollars. As always though, in the most volatile markets in the world a cautionary note should be heeded. Next week sees the official GDP figures released for the UK in Q1 2012. Have we all got ahead of ourselves? Will the OECD’s prediction of a second UK recession come true or has the UK Chamber of Commerce correctly predicted growth, however small, in the UK last quarter? Wednesday could be a key day to see whether the pound surge kicks on and continues these great buying opportunities but may still prove a sting in the tail for those looking to squeeze that little bit more out of the market.

If you are looking to buy Dollars, now is obviously a great time to talk to us given that it went to a 5 month high on Friday, following UK retail sales, so follow the links below to find out more. Unfortunately due to new legislation in the US we are no longer allowed to offer you a the facility to bring US dollars out of America if you are a resident there, but we can assist in sending funds to the US, and converting Dollars to Pounds if the Dollars are already in the UK, or if you are not a US resident, it is fine.

If you think this may affect you please contact me to find out if we can help or search FinCen for more details.

Sterling gains strength as investors head back to riskier currencies

Sterling pushed through the $1.59 on Tuesday as UK inflation data and a Spanish bond auction added support to the GBP/USD cross. UK inflation data increased slightly to 3.5% from 3.4% which reduced the possibility that the Bank of England will hold off from further monetary stimulus next month.

As the data was released pound/dollar rates rose from $1.5870 and passed $1.5960 and held around that level throughout the day.

Investors moved away from the greenback as appetite for riskier currencies increased after an auction of Spanish bill went better than expected. The troubled country sold more bills than forecast which was seen as a positive move for market players

When investors leave the safe-haven status of the greenback it weakens the U.S currency and therefore becomes cheaper to purchase. This is good news if you are buying dollars as you will receive more for your money.

As I mentioned in yesterdays post Wednesday will give us a good insight to how Sterling could perform over the next few weeks.UK jobs and claimant data will be released at 08.30 (GMT) along with the Bank of England minutes from their recent meeting. A positive outcome from both sets of data could see rates push rates back towards the $1.60 level we saw before Easter.

If you need to buy or sell dollars you can contact me to discuss the best ways of making the most from your currency transaction. Send me a direct email by clicking here or complete the contact form on the homepage of the blog.

Postive data from the UK and U.S

Pound/dollar rates remained relatively flat on Monday as data releases from the UK and U.S led to exchange rates staying in a 50 pip range. At the high of the day saw the GBP/USD cross briefly break $1.5870 after rising from the low of $1.5820.

In the UKMonday morning saw the Council of Mortgage lenders (CML) announce that mortgage lending had picked up in February. The number of home loans increased by 4% from January to 36,600, a gain of 17% compared to February 2011.

The number of loans given to first-time buyers also increased by 8% from January which compared to January 2011 was a rise of 18%. However, the CML said the rise could be temporary as full stamp duty must now be paid for first time buyers.

In the U.S, retail sales grew faster then had been forecast for March 2012. This raised hopes the U.S economy has not slowed as much as originally thought. The retail sales measure is always closely watched as consumer spending currently makes up around 70% of the U.S economy.

The pound has gained strength in recent weeks as improving data releases have shown signs of improvement for the UK. On Wednesday we have the UK jobs data and the Bank of England minutes, if the jobs data is weak or there is further talk of Quantitative Easing from the BoE we could see sterling come under pressure.

If you need to buy or sell dollars in the coming weeks click here to send me a direct email or complete the contact form on the homepage of the blog. we can then discuss your requirements in more detail.

Pound/Dollar remains rangebound

Last week saw pound/dollar exchange rates remain relatively stable despite a host of data releases from the U.S, UK and Europe. Following the $1.60 highs we saw before Easter the GBP/USD cross finished the week more or less as it started as the graph below shows.

Pound/dollar rates fell by over a point at the start of the week despite the positive news that UK house prices declined at their slowest pace for 22 months in March. Rates fell to $1.5823 as the dollar once again benefited from the continued uncertainty surrounding the Euro  

The dollar’s gains early in the week were down to a drop in appetite for riskier currencies, recent PMI data from the Euro has indicated a contraction in activity while rising costs to insure Spanish and Italian debt prompted investors to head back across the pond to the safe haven status of the US dollar

Over the last few weeks the pound has been supported by improving construction and manufacturing data and Wednesday’s news that UK retail sales rose for the month of March have added to expectations that the UK will avoid going into recession and that the Bank of England will hold off from further Quantitative Easing. The British Retail Consortium (BRC) announced that like-for-like sales values increased by 1.3% compared to March 2011, the figures provided easily beat predications of a stagnant performance.

Towards the end of the week Sterling started to gain against the US Dollar as Jobless Claims and annual inflation data was worse than expected, weakening the USD and making it cheaper to purchase and, as a result, exchange rates went up. However, the gains were short lived as U.S CPI data (Consumer Price Index) released on Friday afternoon was better than expected and pushed rates back towards the mid $1.58’s.

As we have said before there are a range of forecasts that indicate that pound/dollar rates could fall towards $1.50 over the coming months, mainly due to the continuing problems in the Euro-zone. For this reason it is imperative you stay in contact  as a sudden movement in the market could prove costly. Click here to send me a direct email or complete the contact form on the homepage of the blog.

Sterling gains ground following more postive data

Wednesday saw sterling pushed past the $1.59 mark and peaked just over 1.5930 following more positive data coming out of the UK.

Over the last few weeks the pound has been supported by improving construction and manufacturing data and today’s news that UK retail sales rose for the month of March have added to expectations that the UK will avoid going into recession and that the Bank of England will hold off from further Quantitative Easing.

The British Retail Consortium (BRC) announced that like-for-like sales values increased by 1.3% compared to March 2011, the figures provided easily beat predications of a stagnant performance.

There is a general feeling that appetite for sterling could fall away quickly if there was a run of bad data from the UK, this would lead to global investors pulling out of riskier assets and return to the safe haven U.S dollar. This would lead to GBP/USD rates slipping away from their current levels.

As I have said before there a range of forecasts that indicate that pound/dollar rates could fall towards $1.50 over the coming months, mainly due to the continuing problems in the Euro-zone. By using a Forward contract you can protect yourself from any adverse market movements and book your rate of exchange for up to two years in advance.

If you would like to discuss the different options available click here  to send me a direct email or complete the contact form on the homepage of the blog.

Dollar gains strength on the back of Euro weakness

Tuesday saw pound/dollar rates fall by over a point despite the positive news that UK house prices declined at their slowest pace for 22 months in March. Rates fell from $1.5925 to $1.5823 as the dollar once again benefited from the continued uncertainty surrounding the Euro.

Recent data has given added support to sterling and today’sv data release regarding UK house prices further reduced concerns that UK is heading back into recession. Last week the Bank of England (BoE) policy makers voted to hold interest rates at 0.5% and keep their asset buying programme at 325 billion pounds. Had policy makers chosen to pump more money into the UK economy we could well have seen pound dollar rates fall further from the highs we saw at the start of last week.

The dollars gains on Tuesday were down to a drop in appetite for riskier currencies, recent PMI data from the Euro has indicated a contraction in activity while rising costs to insure Spanish and Italian debt prompted investors to head back across the pond to the safe haven status of the US dollar.

Recent events show how quickly the currency markets can change and how difficult it is to predict which way the market will move. The best advice I can offer to anyone looking to buy or sell dollars in the coming months is to set you a target and stick to it.

You can use Stop and Limit orders to help achieve rates that are not currently available and protect you from any adverse movements. If you are looking to buy or sell dollars in the coming weeks or months click here to send me a direct email or complete the contact form on the homepage of the blog.

Pound Dollar Forecast weekly overview

Sterling continued its surge against the dollar early last week after recent PMI data showed that the UK manufacturing sector grew at its fastest pace for ten months in March.

GBP/USD rates peaked as $1.6063 last Monday morning, pushing past the highs of the previous week and held over the $1.60 throughout the day.  This recent positive data is a sign that the UK economy actually grew in the first quarter of 2012 and could avoid slipping back into recession.  Despite this, many investors could be hesitant about pushing the pound too high considering there is still a possibility of further quantitative easing in the UK.

The highs were short lived as Sterling fell against the dollar throughout Tuesday due to asset sales in Asia. Rates dropped by 0.5% from the start of the day to $1.5955.  But losses were reduced

by positive manufacturing and construction data that went someway to ease concerns over the UK economy.

Throughout the week Sterling slipped against a stronger dollar despite data showing that the UK’s services sector grew in March.  Rates fell around 0.8% after Federal Reserve minutes indicated the bank will hold off from injecting further money into the U.S economy.  The minutes from the Federal Reserve’s March meeting provided an insight into how the policy-setting committee members voted. Only two of the ten members voted in favour of additional stimulus, which was a surprise considering the speeches made by Chairman Ben Bernanke last week pointed towards more money being pumped into the U.S economy.

Rates steadily fell from the $1.60 mark that was seen at the start of the week and reached a low of $1.5821 during the latter stages of the week. The decline was down to dollar strength rather than Sterling weakness, the Fed minutes and a disappointing Spanish bond auction led investors to leave the single currency (Euro) and head back to the safe haven status of the U.S dollar.

Analysts said sterling would struggle to sustain a move over $1.60 which looks to have been true. With rates still close to the highest we have seen since November it is still a very good time to buy dollars, with a Forward contract you can take advantage of the current highs and book your rate of exchange for up to two years in advance. 


If you are thinking of buying or selling dollars in the next few months click here to send me a direct email or complete the contact form on homepage of the blog.

Sterling falls against a stronger dollar

Sterling slipped against a stronger dollar on Wednesday despite data showing that the UK’s services sector grew in March. Pound/dollar rates fell around 0.8% from Tuesday after Federal Reserve minutes indicated the bank will hold off from injecting further money into the U.S economy.

Throughout Wednesday rates fell from the $1.60 mark we saw at the start of the week and reached a low of $1.5845 in the afternoon. The decline was down to dollar strength rather than Sterling weakness, the Fed minutes and a disappointing Spanish bond auction led investors to leave the single currency (Euro) and head back to the safe haven status of the U.S dollar.

The minutes from the Federal Reserve’s March meeting provided an insight into how the policy-setting committee members voted. Only two of the ten members voted in favour of additional stimulus, which was a surprise considering the speeches made by Chairman Ben Bananke last week pointed towards more money being pumped into the U.S economy.

In regards to sterling, Wednesday’s data release showing services sector growth (for the 15^th consecutive month) along with the recent construction and manufacturing improvements have reduced the chance of the UK heading back into a recession and the chances of further QE from the bank of England.

If you need to buy or sell dollars in the coming weeks send me a direct email by clicking here or complete the contact form on the homepage of the blog.

Pound/dollar rates fall from Monday's high

Monday’s four month highs were short lived as Sterling fell against the dollar throughout Tuesday due to asset sales in Asia. Rates dropped by 0.5% from the start of the day to $1.5955 at the time of writing; however, losses were reduced by positive manufacturing and construction data that has gone someway to ease concerns over the UK economy.

Britain’s construction sector accelerated last month, with the number of orders being placed at their fastest rate in over four years. Coupled with the Monday’s data that UK manufacturing rose in March to 52.1 from 51.5 in February (a reading over 50 implies growth) reduced the risk of the UK heading back into a recession. It may also mean the Bank of England will hold off from further monetary stimulus which could devalue the pound against a basket of currencies.

The recent gains made by sterling against the dollar have been largely due to expectations for further quantitative easing in the United States. Later on today the Federal Reserve policy minutes will be released and will indicate the likelihood of more stimuli for the U.S economy.

If the minutes show the Fed is leaning towards further easing we could see pound/dollar rates push back towards the highs we saw during Monday’s session.

Tuesdays drop in rates saw a number of Stop Loss Orders being triggered; a Stop Loss allows clients to protect themselves from adverse movements in the market and allows you to budget affectively.

Click here to send me a direct email or complete the contact form on the homepage of the blog to discuss the different types of currency contract that are available.

Sterling surges passed last weeks highs

Sterling continued it’s surge against the dollar on Monday after recent PMI data showed that the UK manufacturing sector grew at its fastest pace for ten months in March. Pound/dollar rates peaked as $1.6063 on Monday morning, pushing past the highs we saw last week and held over the $1.60 throughout the day.

The recent data is a positive sign that the UK economy actually grew in the first quarter of 2012 and could avoid slipping back into recession, the news was unexpected, especially as the Organisation for Economic Co-operation and Development (OECD) announced last week that they predict the UK economy to contract during the first three months of the year.

“UK manufacturing has made a brighter than expected start to 2012, with PMI data pointing to output growth of around 0.3% in the first quarter," Rob Dobson, senior economist at Markit, said.

There is more PMI data being released later this week and the general feeling is that if the data continues to beat expectations we could see sterling sustain the gains made over the past couple of days and hold above the $1.60 mark. But many investors could be hesitant about pushing the pound too high considering there is still a possibility of further quantitative easing in the UK.

Many forecasts still show that rates are unlikely to hold over $1.60, depending on where you look some show that within the next six months we will see cable slip back towards $1.52.

This is a 5 % drop from where current rates are and a £200,000 trade could potentially cost you $16,000 if rates fall back to predicted levels. If you would like to discuss the different options available to protect yourself from any adverse movements click here to send me a direct email or complete the contact form on the homepage of the blog.