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.