GBP/USD drops back below $1.70

Good afternoon,

Sterling suffered again today as investors try to predict when the Bank of England will look to raise interest rates. Following comments made by BoE governor Mark Carney yesterday and the poor UK inflation reading last week the central bank have left market players in a state of confusion which has been reflected in GBP/USD performance. Sterling/dollar hit a low $1.6953, the lowest we have seen the currency pair since 18th June.

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Despite the pound stuttering over the past week the U.S. dollar has been unable to really take advantage and the dollars value was not helped this afternoon after a worse than forecast GDP reading for Q1. Figures posted today showed the U.S. economy contracted by 2.9% in Q1, largely thanks to the extreme weather conditions. Thankfully for those of you looking to sell dollars it did not have a major impact as a contraction was already priced into the market.

All eyes will now turn to Friday and the final Q1 GDP reading for the UK, as I have mentioned in previous posts there have been reports that we could see an upward revision from 0.8% to 0.9%. If that were to happen we could easily see the GBP/USD cross back over $1.70 by the end of the week.

If you are looking to buy or sell dollars in the coming weeks or months and want to make the most from your transfer it is important to know what tools are available. As a currency broker I have a range of contract at my disposal, I can help you target a rate that might not be currently available or protect you against any adverse market movements.

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GBP/USD rates slip again

Good afternoon,

Despite a brief run this morning Sterling slipped against the dollar with GBP/USD exchange rates falling to a low of $1.7003. The day had started positively for the pound with cable sitting just below $1.7050 but any gains were short-lived as market players started to trim bets amid speculation the Bank of England could tighten lending rules to dampen the UK housing market.

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With growing concerns that the UK house prices are rising to quickly, there have been calls for the Bank of England to intervene. By implementing tougher mortgage criteria the BoE will be hoping fewer people will be in a position to get on the housing ladder which in turn will stop house prices rising out of control.

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The pound has been on the march over the past couple of weeks, gaining nearly 2% against the dollar following Mark Carneys speech two weeks ago. It seems the only thing that could cause the pound to start falling against the dollar would be a Bank of England intervention as the UK economy has been out performing its U.S counterpart.

As I have said before, if the mid-market price can hold above $1.70 then the pound will be in a strong position to keep on climbing. Later this week we get the final Q1 GDP reading for the UK and there have been reports we could see a revised figure from 0.8% up to 0.9%, if that were to happen the pound is likely to gain some momentum and it is possible we could see another fresh high for GBP/USD.

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GBP/USD exchange rate Friday update

Good afternoon,

It has been a relatively quite day in terms of data releases but we have still seen the dollar make up some ground against the dominant pound. The GBP/USD cross has slipped from a fresh high of $1.7061 to $1.7018 as traders looked to take their profits ahead of the weekend.

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Even though the pound has lost some momentum over the course of the day it is still in a very strong position against the dollar. Despite the U.S. Federal Reserve cutting another $10 billion dollars from their stimulus package the greenback still seems to be struggling.

With FED Chair Janet Yellen cutting the U.S. growth forecast and hinting that interest rates will remain at their current level for sometime it is difficult to see how the dollar is going to fight back. If the pound can maintain its current position over $1.70 then there is every chance the pound will continue to rise.

If you are looking to buy or sell dollars in the coming weeks or months there are a number of different options available to you to help make the most of your transfer. One option is to look at a Stop Loss order which will help protect you against any adverse market movements.

The Stop Loss will act as a safety net and give you a worse case scenario but at the same time allow you to monitor the markets and take advantage of any gains. For more information on the different types of contract or to see what rates of exchange I can offer. Use the link below to complete the contact form or call me directly on 0044 (0) 1442 892065.

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Sterling loses half a cent against the dollar.

Good afternoon,

GBP/USD exchange rates dipped by around half a cent during trading today as the Bank of England minutes coupled with yesterdays poor inflation figures did little to support the pound. Sterling/dollar dropped from a high of $1.6990 to $1.6933 on the back of the minutes being released and we could be set for further loses if there is positive news from the U.S. Federal Reserve later this evening.

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Today's minutes from the Bank of England's monetary meeting which was held at the start of the month did not help the pound as much as investors and market players were hoping. Following last weeks speech from BoE governor Mark Carney that the central bank were prepared to raise interest rates sooner than later, speculation had been mounting that the minutes would back up his comments.

This was not the case though and the minutes showed there had been no change in stance from the monetary committee, meaning the vote has remained the same as the previous month. This is not to say a rate rise will not happen before the end of year, we need to remember the meeting took place before Mr Carneys speech last week, so next months meeting may shed some extra light.

Fed announcement this evening.

At 7.30pm GMT we will hear from Janet Yellen and the U.S, Federal Reserve. It is being widely tipped that the FED will announce another round of tapering to their on-going stimulus programme. We could see the programme reduced from $45 billion down to $35 billion and if that happens we could see the dollar start to strengthen. It is also being reported that Mrs Yellen will use the announcement as an opportunity to talk about a potential rise to interest rates in the States. If true, it could be a very positive evening for the dollar as it looks to wipe out the gains Sterling made last week.

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GBP/USD exchange rate hits highest level since 2009

Good afternoon,

It was another positive day for the pound as the GBP/USD cross broke through $1.70 for the first time since August 2009. Despite a lack of economic data releases from the UK, Sterling managed to find the extra few pips it needed to reach its highest level for nearly five years. The gains were short-lived though and cable quickly fell back under $1.70 and has remained within a 30 pip range ($1.6960 - $1.6990) throughout trading today.

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What to look out for this week.

It is going to be a busy week in terms of key releases and this could cause some volatility in the currency markets. From the UK tomorrow we get the latest CPI numbers which account for a majority of overall inflation and if the figure gets close to the 2% the Bank of England are targeting we could see the pound benefit.

Wednesday is probably the key day for the UK and U.S. In morning we will see the minutes from the BoE meeting which took place at the start of the month. The minutes could provide us with hints about when a rate rise will take place and could lead to increased investor confidence, which in turn will help boost the value of the pound.

In the evening the U.S. Federal Reserve will release their latest statement. It is widely expected that the FED will announce another round of tapering to their on-going stimulus package and any cut in stimulus should help the dollar. With the U.S economic recovery gaining momentum we could see the FED take the opportunity to talk about a potential interest rate rise and if that happens we could see the dollar wipe out the gains the pound made last week following Mark Carneys speech.

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Mark Carney speech helps boost GBP/USD

Good afternoon,

What a difference a day makes! The GBP/USD cross has climbed by over 1% in the last 24 hours following the comments made by Bank of England Governor Mark Carney yesterday evening. When the UK markets closed last night Sterling/dollar was sitting at $1.6812 but as Mr Carney began his speech at Manor House cable went on the march reaching a high of $1.6992, the highest we have seen the currency pair since May 6th.

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What did Mr Carney say?

The central bank governor seems to have finally changed his stance regarding interest rates. Over the past few months Mark Carney has been fairly dovish about when a hike to the UK base rate will take place. That all changed last night as Mr Carney admitted that interest rates may rise sooner rather than later, prompting a huge surge in Sterling's value. The pound immediately rose against a number of its major counterparts with GBP/USD getting very close to the $1.70 barrier and GBP/EUR climbing over €1.25 for the first time in over 18 months.

Great news for dollar buyers!

The move in GBP/USD exchange rates is great news for anyone looking to buy the greenback. To put last nights move into monetary terms, £200,000 will now see you achieve an extra $3,500 compared to the same trade secured at 6pm on Thursday evening.

What if I am selling dollars?

If you are selling dollars then the last 24 hours will have come as a bitter blow. The U.S dollar has been performing relatively well in recent weeks. One positive you could take is at least the move is down to Sterling strength rather than dollar weakness. A rate rise in the UK will now be priced into the market, so if the U.S economic recovery continues, the Federal Reserve can continue cutting their current QE package and look to raise rates of their own. If that happens we could start to see the dollar strengthen which in turn could bring GBP/USD down.

If you are looking to buy or sell dollars in the coming weeks or months and want to ensure you are maximising your return, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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UK unemployment figures give Sterling a boost.

Good afternoon,

Sterling gained over half a cent against the dollar today following two positive data releases. UK unemployment and unemployment claims came in better than the initial forecasts and helped strengthen the pound. The GBP/USD cross rose from $1.6740 to nearly $1.68 on the back of this mornings data releases helping the pound claw back the ground it lost during trading on Tuesday.

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This mornings unemployment figures have given the UK economy an extra boost today as the number of people out of work dropped again. It had been predicted that unemployment would fall from 6.8% to 6.7% but with the actual figure coming in at 6.6% the pound was able to flex its muscles again and rise against a basket of currencies.

The positive unemployment numbers, coupled with a strong NIESR GDP reading yesterday has once again underlined that the UK recovery is now firmly on track. UK output has risen past its peak of January 2008 and will add to calls for the Bank of England to raise interest rates sooner rather than later. It looks as though the stance of the centrals banks MPC members is beginning to change and it will be interesting to see the result of the BoE minutes which will be released next week.

If the minutes provide us with any clues that the BoE may consider a rate hike before 2015 then I wouldn't be surprised to see Sterling get back close to the $1.70 level we witnessed only a few weeks ago.

If you are looking to buy or sell dollars in the coming weeks and want to make the most of your transfer, I have a number of tools available to help. I can help target a rate that might not be currently available or help protect you against any adverse market movements. I can also secure a rate of exchange for up to two years into the future so even if you don't require your currency straight away you can take advantage of any positive moves.

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GBP/USD loses half a cent during trading today.

Good afternoon,

It has been very quite in terms of economic data releases today with nothing of note coming out of the UK, U.S or the Eurozone. The lack of data did not stop the dollar though with the greenback managing to gain almost half a cent against the pound. As markets opened this morning GBP/USD was trading close to $1.6830 but by the middle of the afternoon cable had dropped back under $1.68 reaching a low of $1.6784.

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So why has the dollars value increased?

The dollar seems have carried over the momentum it built up at the back end of last week following the positive U.S. non-farm payroll numbers that were released on Friday afternoon. Although the number of 217K just missed target it is the fourth month is a row that U.S have created over 200,000 jobs in a month and adds to speculation that the U.S. economic recovery is back on track.

This will come as a huge boost for Janet Yellen and the U.S. Federal Reserve following the disastrous GDP figures that the U.S. posted last month. With the economy seemingly back on track it may give Janet Yellen the extra support she was looking for as she attempts to wind up their current stimulus package as quickly as possible.

What to look out for this week.

There are a number of key releases out of UK and U.S. as the week progresses. From the UK will see the latest manufacturing and unemployment numbers along with NIESR GDP estimate and speeches from Bank of England governor Mark Carney and deputy governor Ben Broadbent. The U.S. will provide us with their latest retail sales and weekly unemployment count and towards the end of the week the latest producer price index (PPI) figures.

All of the above have the potential to swing GBP/USD in either direction and I will of course keep you updated of any developments. In the meantime if you are thinking of buying or selling dollars 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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Sterling benefits from ECB comments

Good afternoon.

The day did not start well for the GBP/USD cross as the pound lost the gains it made against the dollar during trading yesterday. Sterling/dollar slipped back towards $1.6730 this morning as the markets tried to anticipate the announcements from the Bank of England and European Central Bank. Any decline was short-lived though and the pound quickly recovered, breaking back through $1.68 to reach a high of $1.6806.

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Today was an important day in the currency markets with key announcements coming from the Bank of England (BoE) and European Central Bank (ECB). There were no real surprises from the BoE as interest rates remained at 0.5% and there was no change to the Asset Purchase Facility. The big news of the day came from the ECB president Mario Draghi. After hinting last month that the central bank were ready to act in June, everyone was keen to see if Mr Draghi would live up to his word.

He didn't disappoint, the ECB have decided to cut interest rates from 0.25% to 0.15% and implement a negative deposit rate for banks. So what impact did this have? The news had an immediate impact on the euro with the GBP/EUR cross rising nearly a cent in a matter of minutes, reaching a fresh high and leaving the cross close to its highest level in 19 months. GBP/USD also benefitted from the news pushing rates back over $1.68 for the first time since 28th May.

Why has the news from the Eurozone impacted GBP/USD?

The announcement from the ECB has left the pound as the currency of choice. As I said in my post yesterday it looks as though the BoE will raise interest rates before any of its major peers, making it a more attractive investment. Although there was no talk of rate rise from the BoE today, market players will be looking forward to the BoE minutes which will be released in a couple of weeks. The minutes could give us some clues about the stance of MPC members and when a rise could take place, especially as the UK economy has been performing so well of late.

Any hints of when a rise will take place will give investors extra confidence and it is likely we will see the pound gain ground across the board. In the meantime, tomorrow sees the release of the U.S non-farm payroll job numbers are they are sure to cause some market volatility.

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GBP/USD exchange rates rise after postive UK services numbers.

Good afternoon,

The GBP/USD cross rose by over half a cent today as better than forecast UK services PMI figures helped boost the UKs and pounds performance, with GBP/USD exchange rates climbing from a low of $1.6699 to a high of $1.6770 on the back of the data release. Sterling also benefitted this afternoon from a number of weak economic releases from the States with non-farm employment change and trade balance numbers coming in well under the predicted level.

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The positive UK services PMI figures that were released this morning have once again highlighted the fact that the UK economy is continuing to improve. These latest numbers will start to add extra pressure on Mark Carney and the Bank of England's monetary committee raise interest rates in the UK sooner rather than later. It has been suggested that the Bank of England will look to raise interest rates in early 2015 but with the economy performing so well some economists are now predicting we could see a rise by the end of this year.

Over the past few months Mr Carney has tried to slow the pounds performance by talking down the currency. He has stated on a number of occasions that the UK economy is still on a rocky road and that the central bank are in no rush to raise rates. The problem facing the BoE though is that there is not much to support their comments as the UK keeps publishing better than expected economic numbers, so if the trend does continue the BoE may be left with little choice but to act.

How would this impact exchange rates?

A rise in interest rates will make a currency more appealing to investors. As I have said before everything is pointing to the UK acting before the likes of the Eurozone and United States. If that were to happen I can only see the pound going one way and that is up.

This has also been highlighted by some of the forecasts I have been receiving from my brokers, one is predicting we will see GBP/USD at $1.71 within the next three months and GBP/EUR will reach the dizzy heights of €1.25.

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GBP/USD exchange rates remain in 30 pip range

Good afternoon,

The GBP/USD cross has remained relatively flat today with exchange rates staying within a 30 pip range, trading between $1.6730 and $1.6760. So why was the market so flat? It was just a case of the UK and U.S. economic data releases cancelling each other out. Figures released today from both sides of pond failed to meet expectations which meant neither the pound or dollar really got going.

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What happened today?

The UK suffered (what has come to be) a rare blip today, with manufacturing, net lending and mortgage approvals failing to meet forecast. Normally this would have seen the pound lose ground against its major counterparts but with the U.S also posting worse than expected manufacturing numbers, plus weaker than forecast construction spending figures, meant GBP/USD rates remained relatively unchanged from the opening price this morning.  

What to look out for this week.

It is a very busy week in terms of data releases and there are a number of things that could impact rates over the course of the next few days.

From the UK we have latest Bank of England announcement and Mark Carney may use the meeting to try and talk the pound down which could see GBP/USD suffer. However, we will also see the latest construction and services PMI figures and if both are positive could lend some extra support for the pound.

From the States the main data releases are the non-farm job numbers which will be released on Friday, non-manufacturing figures on Wednesday and unemployment claims on Thursday. The job numbers are impossible to predict but a positive reading always seems helps strengthen the dollar.

 

We could also see some movement following the European Central Bank statement on Thursday. Last month Mario Draghi said the ECB were ready to act with extra stimulus as early as June and if we get any indication of this later in the week we could see some safe-haven flows into the dollar. This will strengthen the greenback and in turn drive down the GBP/USD cross.

 
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