Sterling dollar continues to slide, despite the U.S economy contracting

Good afternoon,

Since my post the GBP/USD cross has continued to fall with the currency pair dropping from $1.6880 on Tuesday to a low of $1.6695 today. This will make life a bit more bearable for those of you looking to sell dollars, especially with the way GBP/USD has been performing over the last few months. To put the move we have seen over the past 48 hours into monetary terms, converting $250,000 back into pounds will now see you receive an extra £1640.

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So what has caused the drop in exchange rates?

It all started when Bank of England Governor Mark Carney urged bankers to adopt higher ethical standards at a meeting on Tuesday evening. This is a change in stance from when Mr Carney took over almost a year ago where he said he would do everything possible to help the British banks and news lead to a Sterling sell off when markets opened on Wednesday which in turn weakened the pound across the board.

There were also some positive numbers from the States in the shape of U.S. unemployment claims. The number of people filing for unemployment last week came in at 300K, 21K under the forecast rate had helped maintain the dollar's current position.

It was not all plan sailing for the U.S. today though as figures released this afternoon showed the U.S. economy had shrank by an annualised rate of 1%. The number was much worse than what was forecast as many economists had believed the economy would only contract by 0.5%.

Normally this kind of contraction would lead to a currency weakening, which would have meant the gains made by the dollar over the past two days would have been wiped out.

So why did it not effect the dollar today?

It seems the markets had already taken the contraction into account, the drop in economic output has been blamed on the bad weather that hit the States during the last quarter and could be seen as only a blip. The next few months will be key for the U.S. and all eyes will now be focusing on how the economy performs in quarter two.

If you are thinking of buying or selling dollars in the coming months and want to ensure you are making the most from you transfer there are two ways to get in touch. Either use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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GBP/USD exchange rates drop nearly a cent

Good afternoon,

Sterling lost almost a cent against the dollar today after weaker than forecast UK mortgage numbers a string of positive economic data releases from the U.S. When trading opened this morning the GBP/USD cross was sitting at $1.6880 but by late afternoon the currency pair had slipped back below $1.68 to a low of $1.6795.

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The day did not start well for the pound as UK mortgage approvals missed the forecast target by 3000. It was expected that 45,200 new mortgages be approved in April but with the actual figure coming in at 42,200, means fewer qualified buyers will be entering into the housing market over the coming months. 

The GBP/USD exchange rate then dipped further in the afternoon as the U.S posted better than expected durable goods orders and house price index numbers. The durable goods orders helped strengthen the dollar as they are a leading indicator or production in the States, a rise in the number of orders signal that manufactures will be increasing activity in the coming months which in turn will help boost the economy.

So which way will exchange rates move?

The pound is still out performing most of its major counterparts and with that in mind you may think that the GBP/USD rate will continue to rise. The U.S. Federal Reserves (FED) attempts to strengthen the dollar have had little impact and if that continues things could get worse for the greenback. Over the next few months a lot is going to depend on comments made by the Bank of England and FED over future interest rates.

It think that a rise in interest rates will come from the Bank of England before the FED and if that happens it is likely the pound will go from strength to strength. A rise in rates in the UK will make the pound much more attractive to investors and will boost Sterling's value across the board. If the mid-market rate can break through $1.70 then there may be no stopping the pound and I wouldn't be surprised if the GBP/USD cross got close to $1.75.

If you are looking to buy or sell dollars in the coming weeks and want 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.

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Sterling rises after better than forecast retail figures

Good afternoon,

It has been a positive day for Sterling with the pound gaining against most of the other major currencies. GBP/USD was no different and following better than forecast UK retail sales figures the currency pair climbed back over $1.69 for a brief time this morning.

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Sterling/dollar rose nearly a cent during trading today as UK retail figures posted their biggest annual rise for ten years. UK sales grew by 6.9% in April compared to the same month last year and figures posted by the Office of National Statistics also showed there was a rise of 1.3% between March and April, beating forecasts by 0.8%. The news had an immediate impact on the currency markets with GBP/USD rising from $1.6850 to a high of $1.6916 in a matter of minutes.

What could affect rates over the next few days?

Later today we have a speech from Fed Chair Janet Yellen, this could cause some movement in the FX markets as investors look for clues over future monetary policy, this could include hits about tapering or future interest rate rises.

Tomorrow is a busy day in terms of data releases for the UK and the U.S. From the UK we will see the second GDP estimate for Q1 along with public net borrowing and CBI industrial orders. Any amendment to the GDP figure is likely to affect the value of the pound, a reading over 0.8% could push GBP/USD back towards $1.70.

From the States we will see the latest unemployment claims, flash manufacturing and existing home sales numbers. Anyone looking to sell dollars will be hoping for a strong performance from the U.S for the remaining part of the week as they look for the dollar to try and claw back some of the ground it has lost to the pound over the last few weeks.

If you are looking to buy or sell dollars in the coming months and would like to know what exchange rates I can offer or would like more information on the different types of currency contracts, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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GBP/USD exchange rates climb as Sterling shakes off Bank of England comments

Good afternoon,

Since my last post GBP/USD exchange rates have climbed back over $1.68 as the pound looks to claw back some of the ground it lost last week following the comments from Bank of England Governor Mark Carney. Sterling/dollar reached a high of $1.6842 during trading today but remained within a 40 pip range due a very quite day in terms of economic data releases.

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It seems little can be done to halt the pounds momentum at the moment, even the actions taken by the Bank of England have done little to de-value the currency. Sterling is still the currency of choice for investors and as I have said before this seems unlikely to change anytime soon. I still think we will see an interest rate rise by the Bank of England before we see any action from the U.S. Federal Reserve or the European Central Bank and if turns out to be true I cannot see the dollar making any significant inroads against the pound.

This is great news for anyone looking to buy U.S. dollars, as it currently stands exchange rates are very close to the highest we have seen since 2009. Unfortunately with every positive there is a negative and while it is good news for buyers, the same cannot be said for anyone looking to sell the greenback.

With the way the currency pair has been performing over the last few months, watching the rate and hoping it comes down could prove very expensive. We have seen the GBP/USD cross rise by 14% over the past 10 months and unless something dramatic happens in the UK or U.S. I cannot see exchange rates falling back towards $1.60 anytime in the near future.

With that in mind and if you have dollars to sell it is more important than ever to know what tools are available to help you make the most from your currency transfer. As a specialist currency broker I have a range of currency contracts at my disposal, one of them being a Stop Loss Order. A Stop Loss will instruct me to buy your currency at a pre-determined level, it means you can hold out for a better rate, knowing that you are protected against further adverse market movements.

For more information on the different types of currency contracts 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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GBP/USD exchange rates continue to slide

Good afternoon,

The GBP/USD cross continued to slide during trading today as the Bank of England reiterated once again they are in no rush to raise interest rates. When trading opened this morning sterling/dollar was sitting just below $1.6875 but with no improvement to UK unemployment and the comments made by BoE Governor Mark the pound started to weaken and at the time of writing exchange rates where down to $1.6776.

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It was widely expected that the BoE would adopt a similar approach used by the European Central Bank last week to talk down its currency. The BoE do not want a strong pound to impact the UK's exports and today's speech by Mr Carney meant the value of the pound dropped across the board.

During his speech Mr Carney said that interest rates may stay at their current levels for some time and that any increase would be gradual. There had been growing speculation that the central bank could raise rates as early as the first quarter of 2015 but following these comments that now looks unlikely to happen.

What could impact the GBP/USD cross for the rest of the week?

For the remaining part of this week the UK is going to be fairly quite in terms of economic data releases, which means the pound will be at the mercy of events in the U.S. Over the next two days the States will release their monthly CPI figures, unemployment claims and manufacturing numbers, there is also a speech for Fed Chair Janet Yellen.

If the U.S. can put together a good run of positive numbers there is every chance we could see the dollar claw back a bit more ground against the dominant pound. I will keep you updated as events unfold but in the meantime if you are looking at buying or selling 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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GBP/USD rates back below $1.69

Good afternoon,

It has been a quite start to the week in terms of economic data releases today and the dollar has taken full advantage. GBP/USD exchange rate have dropped back under $1.69 to give dollar sellers a brief respite from gains Sterling has been making over the last few weeks. Since last week GBP/USD has fallen nearly 0.85% as exchange rates move away from the $1.70 mark and there could be further gains for the dollar later this week if Mark Carney decides to weaken the pound.

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Following last weeks comments from ECB President Mario Draghi, the pound has been gaining against the Euro. As I mentioned in my last post the European Central Bank are prepared to look at extra monetary stimulus as early as next month to help support the Eurozone and as a result the euros value has dropped across the board.

How will this impact GBP/USD?

The UKs largest trade partner is the Eurozone and the last thing the Bank of England need at the moment is a strong pound having an adverse affect on UK exports. I would not be surprised if the BoE Governor Mark Carney follows suit and attempts to devalue Sterling when he speaks on Wednesday.

I don't think we will hear Mr Carney talk about extra stimulus for the UK, our economy is performing to well for that kind of measure. If the BoE decide to talk the pound down it will probably come in the shape of an interest rate announcement, any hint of delaying a rise in interest rates could devalue the pound and therefore GBP/USD would come down even further.

I will keep you posted of what happens throughout the week but in the meantime if you have a requirement to buy or sell dollars and want to ensure you are making the most from you currency transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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GBP/USD starts to dip following ECB comments

Good afternoon,

The dollar benefitted from comments made by the European Central Bank (ECB) President Mario Draghi this afternoon as the GBP/USD cross moved away from $1.70. Mr Draghi spoke at the ECB monthly press conference and was rather dovish about what the next couple of months hold for the single currency.

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The dollar is often seen as a safe-haven for investors and the news from the ECB today helped boost the greenbacks value.  Mr Draghi hinted the central bank were ready to act with a broad-based asset purchase scheme which will be aimed at reducing the value of the single currency and that the central bank were prepared to act as quickly as June.

These comments, coupled with better than forecast unemployment numbers for the States meant the GBP/USD cross dipped from a high of $1.6995 to $1.6965, not a massive gain for the dollar but the first one we have seen for a few days.

So what could impact rates for the rest of the week?

Fed chair Janet Yellen is due to testify this evening which tends to cause some fluctuations in the dollars value as her comments are scrutinised for any hints on future monetary policy. Tomorrow is also a fairly busy day in terms of data releases, the UK release their latest trade balance and manufacturing production numbers, while the U.S announce their latest job openings and wholesale inventories.

If you need to buy or sell dollars in the coming weeks 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 for a free, no-obligation consultation.

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GBP/USD exchange rates push towards $1.70

Good afternoon,

Sterling continued its recent trend with GBP/USD pushing towards $1.70. Over the last week the pound has reached a number of fresh highs against the dollar and today was no different. A rise of over a cent during trading today meant the currency pair peaked at $1.6995, rising from $1.6887 when the markets opened this morning.

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The pound is certainly seems to be the dominant force in the currency markets at the moment and this was highlighted today as Sterling rose against most of its major counterparts. Nothing seems to be able to break the pounds momentum at present and not even the better than forecast U.S. job numbers we witnessed on Friday could put a dent in Sterling's performance.

If this trend continues and we break $1.70 there maybe no stopping the pound and it might not be too long until we see rates get back to the kind of levels we witnessed prior to the financial crisis in 2008. The tapering efforts from the U.S. Federal Reserve seem to be having little impact on the dollars value, especially as they have played down any chance of an interest rate rise in the near future. If the UK continues to post better economic numbers than the States it is hard to see how the dollar will recover.

It looks as though the Bank of England will raise interest rates before the Federal Reserve and European Central Bank and if that happens the UK and pound will be the preferred destination for potential investors which is once again likely to boost Sterling's value yet again.

The next few months will be key if you are looking to sell dollars, unless the U.S. can put together a string of positive data releases I can only really see rates going one way and that is up. GBP/USD has risen nearly 14.5% in the last 10 months, so if you are looking to sell dollars it important to know what you can do to protect yourself against further adverse movements.

As a specialist currency broker I have a number of tools at my disposal to ensure you are making the most from your currency transfer. For more information on what options are available or to find out what rates of exchange I can offer, 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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GBP/USD exchange rates break through $1.69

Good afternoon,

Sterling continued its recent rise against the dollar today with the currency pair breaking through $1.69 this morning, a level we have not seen since 5th August 2009. Although the U.S. Federal Reserve announced another round of tapering last night the dollar still found itself on the back foot this morning and with the UK posting better than forecast manufacturing numbers the GBP/USD cross reached a high of $1.6912.

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Last night the U.S. Federal Reserve announced they would strike another $10 billion off of the current stimulus programme, which now stands at $45 billion. The move from the FED did little to help the dollar though as yesterdays disastrous U.S GDP figures were still casting a shadow over the economy. It looks like the FED are prepared to sweep last quarters GDP figures under the carpet as the slowdown in growth can be attributed to the poor weather conditions. 

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The pound could make further gains tomorrow as the U.S release the latest non-farm job numbers which always cause some volatility in the currency markets. If the job numbers miss the predicted level of 216K and the UK posts a positive reading from its construction sector tomorrow morning, Sterling has every chance to cement a level over $1.69 and it might not be long until we see GBP/USD break $1.70.

I will keep you posted of how tomorrow pans out but if you have a requirement to buy or sell dollars in the coming weeks and want 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 for a free, no-obligation consultation.

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