Currency Forecasts

Pound Euro exchange rates: Will GBP/EUR continue to fall?

Pound Euro exchange rates

Pound Euro exchange rates have been under significant pressure throughout the course of the last 6-8 weeks having moved from a high of just over 1.18 to the current yearly lows of 1.1130. This is a move of over 6% during this time. Great news for those selling Euros but what if you need to buy Euros? Will this run continue?

Of course on-going Brexit woes are mainly to blame. If you look at some of the data sets from the UK they haven’t been that poor. This to me suggests, if we can find some kind of resolution to Brexit, and we can avoid leaving on the 31st October without a deal, then the pound could be in for a resurgence.

Tory leadership battle continues

Along with Brexit we also have the fight for Number 10 to contend with. Tonight will see the Conservative leadership battle continue with a head-to-head tv debate scheduled between Boris Johnson and Jeremy Hunt. The new leader will be announced on the 23rd July.

Boris Johnson is the current favourite, and has insisted he will take the UK out of the EU on the 31st October with our without a deal. However I am not so sure I fully believe Boris and should he be named as PM then I believe he may quickly change his tune. I am still being optimistic that a deal will be reached. Personally I do not believe we will leave without a deal. I therefore feel the pound will have a stronger end to the year.

Looking for the best exchange rates?

If you need to get the best rates of exchange, then we can help explain what is moving the market, so that you can make an informed choice on when to fix a rate. We can also provide you with a free no obligation quote. We often show savings of thousands of Pounds for our clients, so to find out how much you could save, get in touch today.

Economic Data Releases: What could move exchange rates this week?

Best Exchange Rates

Good morning. The market remains flat, with GBP/EUR stuck in the mid 1.11’s and GBP/USD down in the low $1.25’s. With no Brexit news expected for several weeks, it will be economic data releases that drive the value of Sterling. In today’s post, I’ll outline the main releases to watch out for, and how they could affect exchange rates.

Economic Data Releases for the week ahead

Monday 8th July 2019

We have already had Trade data and Industrial production numbers from Germany, the EU’s largest economy There were a mixed bag and so haven’t moved the Euro much. There’s not much else on the agenda today other than some retail sales numbers at midnight tonight.

Tuesday 9th July 2019

There are no data releases of note from the UK or the Eurozone today, so we’re unlikely to see much movement for Pound/Euro. Over in the USA we have a speech by the FED chair and other US central bankers. If they continue to signal an interest rate cut is on the cards, then it could weaken the USD. This could also strengthen the Euro due to it’s inverse relationship with the USD, and move GBP/EUR lower.

Wednesday 10th July 2019

Today we see the first major data releases for the week from the UK, including: Industrial Production, Manufacturing Production, Trade balance data and the latest GDP estimate. GDP is forecast for 0.3% so anything lower will weaken Sterling. Over in Canada, we’ll see the latest Monetary Policy report, an interest rate decision and the accompanying statement, so there could be some volatility for GBP/CAD today. Stateside, the latest FOMC minutes could give further hints at an imminent interest rate cut in the United States.

Thursday 11th July 2019

UK data today comes in the form of a financial stability report from the Bank of England. German inflation numbers could also affect Sterling/Euro rates. most focus today however will be in the USA as we will see: Jobless Claims, Inflation numbers, speeches by FED members, and the monthly budget statement.

Friday 12th July 2019

It’s a quiet end to the week, with the only releases on the calendar being EU industrial production, and various inflationary measures from the USA.

Looking for the best exchange rates?

If you need to get the best rates of exchange, then we can help explain what is moving the market, so that you can make an informed choice on when to fix a rate. We can also provide you with a free no obligation quote. We often show savings of thousands of Pounds for our clients, so to find out how much you could save, get in touch today.

Pound vs US dollar: US dollar at a 6 month high

Pound Vs US Dollar

Pound Vs US dollar exchange rates have reached their lowest levels this year ahead of the key US jobs data non-farm payrolls. Sterling is under continuous pressure with on-going Brexit woes and the fight for Number 10.

Sterling exchange rates started the week poorly when on Tuesday the pound was hit by poor construction data. The Markit/CIPS UK Construction purchasing managers’ index (PMI) recorded a reading of 43.1 for June, down from 48.6 in May. Economists were expecting a figure of 49.2. A reading above 50 shows growth, below that figure represents contraction.

This put the pound on the back foot to begin the trading week and we have continued to see sterling losses pushing GBP/USD close to 1.25.

What can we expect from non-farm payrolls?

This afternoons key US jobs data, non-farm payrolls, is scrutinised as it is a key barometer for assessing the health of the US economy. This data represents the number of new jobs created during the previous month, in all non-agricultural business.

This afternoons release, scheduled for 13:30, is expected to show an increase of 160k up from 75k last month. Often the released figure is significantly different to the forecasted. It can therefore create some significant market volatility as a result. Should the data be released as expected then I would predict the US dollar to see further gains against the pound this afternoon.

Protect yourself against the Pound falling further

If you need to convert Pounds to US Dollars, then one way of avoiding any further weakness in exchange rates is to freeze the rate now with a Forward Contract. We can guarantee today’s rates for up to 2 years. The rates we would offer you are likely to be considerably higher than your bank or existing broker. You could save thousands of Pounds. For a free no obligation quote, or to discuss our services in more detail please email michael@currencyforecasts.co.uk

July Currency Forecast: GBP, EUR, USD, AUD, CAD

Monthly July Currency Focus: GBP Undermined by Political Uncertainty

Good morning. In today’s post I’ll take a look back to see how some of our most commonly traded currencies performed in June, and what we might see happen in July. Heightened political uncertainty in the UK continued to drag on the Pound, while the US Dollar weakened after hints from the Federal Reserve that it was prepared to begin cutting interest rates. I will focus on Sterling (GBP), Euro (EUR), US Dollar (USD), Australian Dollar (AUD) and Canadian Dollar (CAD). To get a quote to see what rate we can offer you, please get in touch.

Pound Sterling Forecast (GBP)

The Pound struggled through much of June as a direct result of the continued uncertainty hanging over UK politics. This was driven by the Conservative leadership election, with GBP investors unnerved by concerns that the risk of a no-deal Brexit would be elevated should frontrunner Boris Johnson become the next PM.

While Sterling made an attempt to rally in the second half of June on the back of the weakness in its peers, this proved short lived thanks to the Bank of England’s (BoE) latest policy decision.

Looking ahead, while the Tory leadership election will conclude this month we expect to see political uncertainty continue to drag on the Pound as observers speculate that a general election may not be far behind, especially if the new PM pursues a course that appears to put the UK on the path towards a no-deal Brexit.

Euro Forecast (EUR)

The Euro trended higher last month thanks to broad weakness in some of its major peers. This uptick in EUR exchange rates was also partly attributed to a slight improvement in Eurozone data, which helped to lift some of the gloom hanging over bloc.

However, it wasn’t all smooth sailing for the Euro in June, with EUR exchange rates being knocked in the second half of the month by a market moving speech from European Central Bank (ECB) President Mario Draghi.

Speaking at the ECB’s annual conference in Sintra, Draghi signalled that the bank is prepared to pump further stimulus into the Eurozone (including potentially lowering interest rates) prompting speculation of a rate cut by the end of 2019.

So far in July the Euro has put on a mixed performance, with the nomination of Christine Lagarde as the next President of the ECB prompting expectations that the ECB will maintain its dovish policy stance and disappoint those who had been hoping for a more hawkish leader at the bank.

EUR investors will remain focused on the ECB for the remainder of July on the expectation that the bank may provide more monetary policy guidance following its rate decision at the end of the month.

US Dollar Forecast (USD)

The US Dollar suffered a rare misstep last month, with the ‘Greenback’ facing broad losses after the Federal Reserve signalled that it is prepared to begin reversing some of last year’s rate hikes.

While USD exchange rates briefly rallied on the back of safe-haven demand, the rebounded proved fleeting as Fed Chairman Jerome Powell spoke of the need for the bank to take ‘appropriate’ measures in order to protect the US economy from a slowing global economy following the bank’s June policy meeting.

This was widely interpreted as a signal that the Fed would begin cutting rates immediately, leading USD investors to price in a July rate cut.

While a rate cut from the Fed is almost guaranteed this month, a question remains over the extent at which the bank will lower rates, with most USD investors pricing in a cut of only 25 basis points. If the Fed surprises with a cut of 50 basis points it could lead to a sharp drop in the US Dollar.

Australian Dollar Forecast (AUD)

The Australian Dollar was mixed last month, with the ‘Aussie’ initially struggling after the Reserve Bank of Australia (RBA) lowered interest rates to a new record low, as outlined in my colleagues post yesterday.

This was followed by some worrying Chinese economic data, which stoked fears that Australia’s largest trading partner was feeling the pressure from its trade dispute with the US, concerns over which also dragged on AUD exchange rates.

However, the Australian Dollar rallied through the second half of the month, ultimately closing out June higher as a risk-on mood prevailed in markets following the dovish shift in the Fed.

Despite the RBA starting this month by implementing its second consecutive rate cut, the Australian Dollar continues to show remarkable resilience thanks to the continued rise in risk appetite in the wake of the US-China trade truce.

Canadian Dollar Forecast (CAD)

The Canadian Dollar trended higher in June, with the oil-sensitive currency climbing thanks to a strong rebound in crude prices driven by the heightened tensions in the Middle East.

Further buoying the ‘Loonie’ was a surprisingly strong domestic inflation reading in May, which boosted hopes that the Bank of Canada will be able to leave interest rates on hold for the time being.

This will be put to the test later this month as the BoC concludes its latest policy meeting, with the Canadian Dollar likely to face some headwinds if the bank follows the trend of other central banks in adopting a more dovish stance in its forward guidance.

Looking for the best exchange rates?

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Pound Vs Australian Dollar: RBA cut interest rates, what now for the AUD?

Pound vs Australian Dollar

Pound Vs Australian Dollar exchange rates fell against the Australian Dollar overnight following an interest cut by the RBA (Reserve Bank of Australia) by 0.25%. This has brought Australia’s base rate to a record low of 1%

This was very much predicted, as I alluded to in my post last week. Indeed the pound fell below 1.80 for the first time since February, with the Australian Dollar now rallying nearly 5% against the Pound since early May. As I predicted in my blog last week, under normal circumstances following a rate cut you would expect a currency to devalue. However, the Australian Dollar rallied nearly 0.5 cent. This highlights just how out of favour the Pound currently is.

What now for the Australian Dollar?

The Australian economy has been under performing in recent months, leading to this move from RBA governor Philip Lowe. This is the first time the RBA has cut in successive months since 2012.

Dr Lowe said the economy had grown below trend over the past year, with household consumption “weighed down by a protracted period of low income growth and declining housing prices”.

While employment growth had been strong, there had been little inroads made into the economy’s spare capacity,. This means overall wages growth “remains low”.

A record low of 1% should mean a reduction of flows of money into the Australian economy. Due to this I would look for a fall in value for the Aussie against currencies such as the USD, potentially a move back to 1.45/0.6896. We may also see AUD/EUR take a slight knock. As for AUD/GBP the Pound is still extremely vulnerable to Brexit developments, along with the on-going fight for Number 10. Therefore I would still expect the Australian Dollar to remain strong for the foreseeable future.

Do you need to buy or sell AUD?

If you need to convert Pounds Vs Australian Dollars, then one way of avoiding any further weakness in exchange rates is to freeze the rate now with a Forward Contract. We can guarantee today’s rates for up to 2 years. The rates we would offer you are likely to be considerably higher than your bank or existing broker might offer, by up to 2% or 3%. You could save thousands of Pounds, so for a free no obligation quote, or to discuss our services in more detail please email michael@currencyforecasts.co.uk