The Pound has recovered most of yesterday’s losses after stronger than expected Retail Sales number were released this morning. The markets had only been expecting a small rise of 0.2%, but the actual number came in at a much more impressive 1.0%. This indicates that consumers are still spending. Retail Sales is a good barometer of the overall health of the economy, so the better result helped the Pound rise. You can see live graphs here.
In other news, May lost a series of votes last night as was expected. It didn’t affect the Pound much because it doesn’t really mean anything. The lack of support however means there is no impetus for the EU to make concessions to help get the deal through.
I’m still of the view that they will make the necessary concessions. From the EU’s point of view however, there is little point in doing so now. If they did there is the risk of the UK going back and asking for more. It’s more likely they will leave things until the last minute as the EU has been shown to do in the past. If they do make concessions, parliament have already indicated that they will vote the deal through. This would help the Pound as it would put to bed once and for all any chance of a ‘No Deal’, and both sides could get on with negotiating a trade deal.
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Pound exchange rates have fallen sharply today following rumours that the European Research Group (ERG) will vote against Prime Minister Theresa May’s Brexit proposal tonight.
MPs will vote later on whether they still support the government’s approach that they backed in a vote last month and the Brexit Secretary Stephen Barclay has come under fire for refusing to rule out a no-deal Brexit. Brexiteers are unhappy with the motion because they say it implies support for ruling out a no-deal Brexit.
Tonight’s events are not expected to be set in stone as Mrs May has promised lawmakers will get another chance to express their opinion on the 27th February.
With only six weeks to go until the UK is to officially leave the European Union on the 29th March markets are concerned the risk of a ‘no deal’ Brexit is becoming more and more apparent. It is this risk that has caused the pound to fall.
Tonight a number of amendments will be voted for, inclusive of one that calls for a second referendum. Analysts believe that if Mrs May did open the door for a second referendum then the pound could bounce significantly. Either way it is likely the pound will see some volatility in the next six weeks.
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New Zealand Dollar exchange rates have rallied sharply overnight following the latest Reserve Bank of New Zealand (RBNZ) interest rate meeting.
NZD exchange rates have strengthened nearly 1.5% as the RBNZ held interest rates at 1.75%. This move was expected but it was the accompanying statement that caused the New Zealand Dollar to rally sharply.
In the post decision statement many analysts were expecting a relatively dovish tone to come from the minutes with most analysts expecting a series of interest rate cuts on the horizon. However the statement was far more upbeat with longer term projections actually suggesting a potential rate rise with a freeze of rates until 2021.
This has brought to a halt the recent rally for the pound which had climbed from 1.87 in early February to peak at just below 1.92. It also highlights how volatile the market can be and the impact this can have on an international money transfer. On a £300k transfer to New Zealand between the high/low rate of exchange in the last week the difference is a staggering $15,000 NZD.
For me I still feel it is likely the pound will have a stronger year and particularity against the riskier currencies such as the NZD, AUD and ZAR. If we can make a break though regarding Brexit (a big if I know) then the pound is likely to see some significant support. I also feel the sentiment from the RBNZ was maybe there to mask over the recent issues seen for the New Zealand economy. Growth has been steadily falling and tensions between New Zealand and China growing as New Zealand has lost its favoured status with the Chinese political leadership following the Government decision to rule Huawei out of the 5G mobile build.
China is the second biggest trading partner for New Zealand (behind Australia) and on-going tensions will not be good for future business. My take on this is that the recent blip for sterling maybe short lived and I would look for the pound to push back over 1.90 in the short-medium term.
Here at currencyforecasts our aim is to help private and corporate clients with the timing of their exchange. By being kept fully up to date on the market trends and short to medioum term movements we can potentially help you save thousands of pounds on your money transfers.
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GBP/AUD exchange rates have rallied in the last 24 hours pushing from 1.785 to just shy of 1.82 – a move of nearly 2%
This is a fairly significant move and shows how important it is to be in a position to act on positive or negative market movement. To highlight this a £200k money exchange earlier this week would have netted $7,000 AUD less than the current rates, a significant difference.
Australian Dollar exchange rates have weakened following weaker than expected forecast from the Reserve Bank of Australia (RBA). At the latest central bank meeting the key interest rate was held at 1.5% – this was not a surprise to the market however comments made by RBA Governor Philip Lowe has led to a fall in value for the Aussie.
The RBA admitted that the Australian economy was weaker than expected and hinted that the next rate movement could actually be a cut. This led to a big sell off for the Australian Dollar and could see further losses in the coming days. The pound is now 10 cents higher than levels at the beginning of December.
Should you be emigrating to Australia the currency aspect of the move should be an area to pay close attention to. Significant market movements can have a major impact on the cost of your move overseas and with the market currently extremely volatile it is not uncommon to see major market movement.
For those that need to convert currency and make an international transfer, there are steps you can take to avoid the uncertainty in the currency markets. We offer various tools to help protect against adverse rate movements such as Forward Contracts, Stop Loss Orders, Limit Orders and Rate alerts. We also offer exceptional rates of exchange that are up to 5% better than your bank or existing broker might offer.