Exchange rates climb after UK avoids recession

Good afternoon,

Well what can I say, today has seen the UK avoid the dreaded triple-dip recession and on the back of the news we saw a big jump in exchange rates. Since the turn of the year sterling has been in free fall against the dollar falling from $1.63 all the way back to £1.48 but with todays better than forecast GDP results the GBP/USD cross reached its highest levels since the 19th February peaking at $1.5479. For more information on how I can save you money, click here.
 

At 9.30 this morning the UK Gross Domestic Product (GDP) figures released by the Office of National Statistics (ONS) confirmed that the UK had avoided falling back into another recession after better than expected growth in the first quarter. Initial forecasts had been for the UK economy to grow by only 0.1% but thanks to stronger growth in the service sector and an improvement in oil and gas output, the actual figure came in at 0.3%.

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The news had an instant impact on the currency markets with pound/dollar exchange rates climbing by almost 1% in a matter of seconds. Rates moved from $1.5275 to $1.5425 and reached the high of the day of $1.5479 just after lunch. We could have seen further gains over the duration of the afternoon had it not been for U.S Jobless Claims and Continuing Jobless Claims falling, which pushed cable back down by half a point.

So what will happen now.

The latest figures will lend some much needed support to the UK economy over the coming weeks, although todays numbers were only the first estimate (which could potentially be revised down) it should stop the Bank of England (BoE) looking at further stimulus when they meet at the start of next month. We could however see the BoE start to talk the pound down if rates continue to climb. In the past BoE Governor Mervyn King has acted swiftly to halt any sterling gains as they do not want UK exports to suffer which would potentially slow UK growth.

For the time being though lets enjoy the positive movement (unless you are selling dollars of course!) so if you need to buy or sell dollar in the coming weeks contact me for a free, no obligation consultation by clicking on the link below. I will then be able to talk you through the tools and processes that mean you will be able to not only get an exchange rate that is up to 5% better than you can achieve through your bank but also get the timing right to maximise your currency transfer.

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GBP/USD exchange rates recover

Good afternoon everyone,

It has been a relatively quite week so far with no major movements for the GBP/USD cross. We did see a fall in exchange rates first thing yesterday morning as poor German Manufacturing numbers led to an increase in safe-haven flows to the greenback. Rates fell three quarters of a point on the back of the news before recovering over the last 36 hours but failed to break $1.53, this was despite a run of negative data from the States. For more information on the rates I can offer click here. 

It has not been a great couple of days for the States as yesterday's U.S Manufacturing numbers indicated that the sector grew at its slowest pace for nearly six months and coupled with today's Durable Goods data (which came in much lower than forecast) Sterling was able to claw back some lost ground.  

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But with so much hanging on tomorrows UK Gross Domestic Product (GDP) figures, market investors would have been hesitant to move into riskier assets such as the pound. If the GDP figures show that the economy has contracted in the first quarter of 2013 then the UK will be back in recession and we could see a huge drop from where the mid-market price currently stands.

What measures can I take to protect my funds?

If you are reluctant to take delivery of your currency immediately you can fix a rate on what’s called a Forward Contract, I know I have been through the contracts before, but this essentially allows you to lock in a preferred price requiring only a 10% margin of the overall trade.  This allows you to retain the majority of your funds whilst taking the speculative element out of the transfer; a useful budgeting tool.

Another option, which can be combined with either spot or forward contracts are stops and limits.  Essentially this allows you to fit a set of parameters in to the market placing an order that instructs us to purchase or sell the dollars (on spot or forward) should the cross hit your top or bottom rate.

What to do next

If you need to buy or sell dollars in the coming weeks and want to ensure you are getting the best possible price then use the link below for a free, no obligation consultation. I can then talk you through the different contracts to help get the timing right for your transfer.

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Pound dollar exchange rate update

Good afternoon,

GBP/USD exchange rates have remained relatively flat since my last post, after Friday's low of $1.5230 rates fell another 20 pips on the back of the UK credit rating downgrade. However, rates did recover over the course of trading today to reach a high of $1.5230. For more information on the exchange rates I can offer click here.

Credit rating agency Fitch downgraded the UK rating late on Friday to AA+ following recent data which has led to a weaker economic outlook for the UK. The move follows Moody's who were the first agency to act back in February.

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There was no data out of the UK today so sterling was at the mercy of events elsewhere and today's gains for cable were mainly down to some negative figures coming out of the U.S. Existing Home Sales came in lower than forecast and because the housing market is seen as a sensitive area for the American economy it had a adverse affect on greenback and pushed exchange rates up by nearly half a point.

So what will impact exchange rates this week?

To be honest it is a relatively quiet week in terms of data for the UK but probably one of the most important. Tuesday will see the latest Public Sector Borrowing figures released and may cause some movement in the currency markets depending on the result.

Thursday is the key day for the UK as we get the all important Gross Domestic Product (GDP) figures. These figures will determine whether the UK is back in recession and are likely to cause a big movement for the GDP/USD cross. It is safe to say that the UK is currently balanced on a knife edge as early forecasts were for the UK economy to grow by only 0.1%. Thursday's data could quite easily show a contraction and if so will mean the UK is in the dreaded triple-dip.

Did you know

The largest bank notes ever printed in the U.S were $100,000 bills, issued in 1934

To put it in simple terms if the data is positive we could see a big jump in rates but if negative we will see rates fall. If we were to fall into a recession then the knock on effect could see more stimulus from the Bank of England (which would devalue the pound further) and also see a credit rating cut by S&P (the only agency to still give us a AAA rating). The result could see exchange rates fall back below $1.50 with the potential to keep falling.

If you have a requirement to buy or sell dollars in coming weeks then it is more important than ever to know what options are available (especially before Thursday). Use the link below to see how I can protect you from adverse market movements and how I can offer a better exchange rate than you would be able to achieve through your bank.

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Pound dollar weekly overview

Good afternoon.

In today's post I will take a look at events that have effected cables performance in the last 48hours and also look to give you a summary of what has happened with exchange rates in the past five days. If you would like more information on how I can save you money click here.

Since my last post on Wednesday afternoon GBP/USD exchange rates rose almost a cent and a half from a 10 day low of $1.5230 back to $1.5370. Earlier in the week I wrote about how the UK Retail Sales Figures were being released and that the data would cause some negative movements within the currency market. The figures were released on Thursday morning and surprisingly didn't have the impact I expected, despite sales figures for March coming in at -0.7% when forecasts had been for a -0.6% drop. 

Any losses against the dollar were limited as the U.S reflected on some poor manufacturing numbers. The U.S manufacturing sector only grew by 1.3% when it had been predicted that we would see a 2.7% rise and pushed rates back towards $1.5350.

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Sterling was also buoyed on Friday morning by rumours of corporate flows into the UK to boost the flagging economy, which prompted a sudden surge in the pounds performance against a basket of currencies. However, it is expected that any gains for sterling will be limited in the short term as the threat of another recession and further stimulus from the Bank of England (BoE) continue to cause a high level of uncertainty.

Did you know:

The average life of a one dollar bill is only 18 months.

So to summarise

Over the course of this week we have seen a 0.75% swing with the GBP/USD cross. Early trading saw exchange rates fall from $1.5350 back to $1.5230 before recovering on Thursday and Friday. To put the move into monetary terms a £200,000 trade would have seen you receive nearly $3000 dollars less had you brought at the low point of the week compared to todays high. It shows just how important it is to get the timing right on you transaction and to know what currency contracts are available to protect you against any adverse market movements.

If you need to buy or sell dollars in the coming weeks don't leave it to chance, with the UK GDP figures due for release on Thursday 25th April having a Stop Loss or Limit order in place could potentially make or save you thousands of pounds. It is forecast that the UK grew by only 0.1% in the first quarter but there is still every chance the UK will fall into recession and if confirmed will see the value of the pound drop massively across the board.

If you would like to know what options are available to you or would like to know how much money I can save you compared to your bank use the link below for a free, no obligation consultation.

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GBP/USD exchange rates fall on the back of UK unemployment

Good afternoon,

The last 36 hours has seen Sterling continue its recent trend and lose further ground against the U.S dollar, since my last post exchange rates have dropped half a per cent  to a low of $1.5230 (the lowest we have seen for 10 days). We could see further losses tomorrow as the UK release it's retail sales figures for March and market expectations are for the sector to contract.

Today's decline was largely down to UK unemployment figures, the number of people out of work between December and February increased by 70,000 and prompted the pound to fall against a basket of currencies. Further losses for cable were limited from the news that the number of people now claiming Job-Seekers Allowance fell by 7,000 in March.

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I mentioned in Monday's post that the Bank of England (BoE) minutes were being released this morning and as expected there was little change to what was forecast. Interest rates remained on hold while the number of policymakers pushing for more Quantitative Easing (QE) also remained the same. The minutes showed that three out of the nine MPC members voted for further stimulus and once again the Governor of the BoE, Sir Mervyn King was one of them.

The BoE will meet again at the start of May and by that time we will know if the UK is back in recession. If the Gross Domestic Product (GDP) figures show that we are back in recession it will be interesting to see how the policymakers react, I wouldn't be surprised if more QE was on the agenda and if they were to add to the £375 billion that has already been pumped in the UK economy it will be a very testing time for the pound and exchange rates. It would be highly likely we will witness a drop in rates across the board with GBP/USD falling past the $1.4830 we witnessed a couple of weeks ago.

With so much uncertainty surrounding the currency markets it is important to know what options are available to you before the GDP figures are released. If you need to buy or sell any currency in the next few weeks I can help to take the risk element out of your transfer and protect you from any adverse market movements.  I can offer exchange rates that are up to 5% better than what you would be able to achieve through the bank, so if you would like to discuss the options in more detail and find out how much money I can save you complete the contact form below for a free, no obligation consultation. 

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Sterling dollar exchange rate predictions

Since my post on Friday sterling has lost half a point against the dollar to bring the mid-market price back towards $1.53. Trading opened today with the GBP/USD cross hovering around $1.5350 but over the course of the day the pound lost ground to reach a low of $1.5303.

With no real data of note coming out of the UK today sterling was at the mercy of events elsewhere and lost ground from Fridays high. Wednesday and Thursday are the big days for the UK this week in term of data with the Bank of England (BoE) minutes and unemployment figures due on Wednesday morning and retail sales figures on Thursday.

So how will the data effect exchange rates?

I don't expect the BoE minutes to have much of an impact of as there was no real surprises when MPC members met at the start of the month. The bank decided to leave interest rates on hold and decided against further stimulus for the UK economy. Unless there is a change in the number of policymakers voting for quantitative easing it shouldn't cause too much movement in the currency market.

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The big move of the day may come from the unemployment figures which are forecast to improve. If the number of people out of work and the number of people claiming Job-Seekers Allowance fall it could add strength to the pound and push rates back towards $1.54.

However, if there are any gains on Wednesday I would expect them to be short lived as Thursday's retail figures are tipped to be poor. It is widely predicted that the cold weather in March has had a huge impact on shops and small businesses and that the retail sector contracted last month.

If the figures do show a contraction not only will it wipe out any gains from the previous day it would also add to fears that the UK is heading back into recession when the official figures are released on the 25th April. If the UK was to enter the dreaded triple-dip then we would see sterling fall against a basket of currencies and the news could push cable back under $1.50.

I will keep you updated with how exchange rates reacted to the data but in the mean time if you have a requirement to buy or sell dollars in the coming weeks then feel free to get in touch. With so much uncertainty surrounding the FX markets at the moment getting the timing right on your transfer could save you thousands. By using the link below and completing the contact form, I will be able to talk you through the different options that are available that can protect you against any adverse market movement.

Click here to complete the contact form

Sterling dollar exchange rate overview

Good afternoon,

In the run up to the official Gross Domestic Product (GDP) figures and positive UK data earlier in the week sterling rallied against the dollar to break through the $1.54 barrier to reach a fresh eight week high.

However, exchange rates could not maintain the highs we have seen over the last 24 hours and quickly slipped back towards $1.5350. Data released this morning (Friday) showed that the UK construction industry remained weak in February despite the sector growing by 5.5% compared to January.

The latest data will dampen hopes the UK will avoid the triple-dip recession. I know I have mentioned it a few times over the last few weeks but if the UK does contract in the first quarter of 2013 then we could potentially see exchange rates fall to the levels witnessed only a few weeks ago ($1.48).

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Further losses during trading today were limited as the U.S released their latest retail data for March, official figures showed that U.S retail sales had fallen across all sectors for the second time in three months.

So where do I see exchange rates in the next couple weeks.

I would expect the market to remain pretty volatile, if you look for peoples opinions you will see a range of forecasts from $1.49 to $1.56 in the coming months and just goes to show the uncertainty surrounding the UK at present. Once the GDP figures are released on the 25th I think we will see the market die down slightly as it will give us a better indication of things to come.

My opinion is that the UK is still looking down the barrel and even if we avoid the recession we could see the Bank of England either talk down the pound to help boost UK exports or look at further stimulus to try and boost the UK economy. Either of these actions could have an adverse effect on exchange rates and would counteract the positive news of the UK economy growing.

With so much uncertainty surrounding the FX markets knowing what options are available to help you with your currency purchase could save you thousands. If you need to buy or sell dollars in the coming months use the link below to complete the contact form for a free, no obligation consultation.

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Sterling dollar exchange rates rise

Good afternoon,

Firstly let me apologise for not posting on here for the last few days as I took a much needed break from the office. Since my last post sterling has rallied against the dollar to reach its highest levels since 20th February. So far this week we have seen exchange rates peak at $1.5347 largely thanks to some better than expected UK data and the poor U.S jobs data that was released on Friday afternoon. Todays post will take a closer look at the events which have caused the rise for cable.

Last Friday saw the value of the dollar fall as weaker than forecast non-farm jobs data led to sterling gaining over a cent within a couple of hours. It had been predicted that the U.S would create nearly 200,000 jobs in March but the actual figure came in much lower at 88,000.

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There has also been some positive news from the UK in the last couple of days. Recent figures showed that Industrial Production beat expectations and rose by 1% in February and will add to the growing hope that the UK may narrowly miss the dreaded triple-dip recession.

Sterling has now climbed by nearly 1% since Friday afternoon and if the UK does manage to avoid another recession we could see rates climb even higher. We are getting ever closer to the official GDP figures being released and if the news is positive then rates could push back over the $1.55 mark. A positive GDP outcome will also dampen any chance of the Bank of England pumping more money into the economy (for the time being) through their quantitative easing programme and will lend extra support to the value of the pound.

So what if we do head back into recession?

Then I am afraid to say we will probably see the pound fall against a number of currencies not only the dollar. It was only a few weeks ago that we witnessed exchange rates fall back towards $1.48 and if another recession is confirmed it is likely we will see that level of trading again. One of the broker forecast that I receive on a daily basis are still predicting that we will see rates hit $1.47 within the next six months and another recession could well see those forecasts revised even lower.

So if you need to buy or sell dollars in the coming months knowing what options in the currency markets are available could prove vital. By using the link below and completing the contact form, not only can I help you get some of the best exchange rates but can also help to get the timing right on your currency transfer to protect you from any adverse market movements.

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Pound/dollar rate update and forecast

Good afternoon everyone, I hope you all enjoyed your Easter break.

The last 36 hours have seen some big movements for the GBP/USD cross, since trading opened yesterday exchange rates fell by 1.1% from $1.5252 to $1.5079 before recovering slightly this afternoon. Today's post will take a closer look at the major factors that have impacted exchange rates and what my thoughts are for the coming few days.

 












Yesterday morning (Tuesday) did not start brightly for the pound as in the space of a few hours exchange rates fell by over a point on the back of poor UK Construction data. The UK Construction PMI came in lower than forecast and once again showed the sector had contracted and forced down exchange rates. The decline did not stop there as later in the day saw the release of the latest U.S factory order data. Factory orders rose in February at their fastest pace in five months largely thanks to demand for commercial aircraft and with durable goods orders also up by nearly 5.6% sterling dropped to its lowest level against the dollar since the 20th March.

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Last week figures released by the Department of Commerce showed that the U.S economy grew more than first thought in the final quarter of 2012, with the outlook in the states seemingly improving sterling could well come under further pressure in the next couple of days. On Friday we will see the latest job numbers from the U.S and they always tend to cause some market volatility. Last months figures came in much high than forecast and prompted cable to fall by nearly two points in a matter of minutes and if we see some positive numbers on Friday we may witness a similar drop.

Tomorrow (Thursday) is the most important day of the week in terms of data for the UK. Tomorrow morning will see the Bank of England (BoE) announce their latest interest rate and quantitative Easing (QE) decision and the result could impact the value of the pound. I think it is unlikely we will see the BoE change interest rates but if policymakers opt to increase the current QE programme we could see a drop in exchange rates.

With so much attention on the UK and whether we will fall into another recession I expect to see the uncertainty in the currency markets continue over the next couple of weeks. If we do fall back into recession (which I still think is likely) I would expect exchange rates to fall back into the $1.40's 

If you are a business or private client and need to buy or sell dollars over the next few weeks it is important to know what options are available to help you make the most of your currency transfer. If you would like to discuss current exchange rates or would like some more information about how I can save you money use the link below for a free, no obligation consultation.

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