Currency Forecasts

Pound to US dollar forecast.

Pound Vs US dollar

Pound to US dollar exchange rate have gained traction this week. At the low on Monday GBP/USD traded at 1.1950 and peaked just over 1.23 this morning. The pound has been given a boost as it appears to be increasingly unlikely we will leave on the 31st of October with a no-deal.

This week has been a busy week in parliament and it hasn’t exactly gone the way PM Boris Johnson had planned. Today, MP’s in the House of Lord’s will continue to debate the labour backed bill to block a no-deal on the 31st October. All stages of the bill are expected to be completed by 17:00 today.

What else can we expect today?

We are expecting the ruling from the Royal Courts of Justice as to whether PM Boris Johnson can go ahead and shut parliament. This ruling has been brought forward by businesswoman Gina Miller and former PM John Major.

In Mr Johnson’s speech yesterday he called for mid-October election. Many MP’s oppose this suggesting it should be delayed until an extension of Brexit has been agreed. The House of Commons rejected the PM’s plan for a snap election on Wednesday, but MP’s will have another chance to vote for this on Monday.

Pound to US dollar

As much of the focus this week has been so heavily sterling based it is important to not disregard data from other major currencies. In this instance I will focus on the US dollar. Today sees the release of non-farm payroll figures. These are key US jobs figures and are often used as a barometer for the health of the worlds largest economy.

We are expecting 158k as the official figure, but often the actual level is significantly different to the forecast. As a result, and depending on the release, you can see significant shifts for GBP/USD and USD/EUR. The release is at 13:30.

Protecting yourself against adverse rate movements

There are so many possibilities in the next few months, rates could move either way, by large margins. If you need to convert currency then this volatility could cost you thousands if rates move against you.

We offer various ways to protect against adverse rate movements. A ‘Forward Contract’ allows you to freeze the current rate for up to 12 months, removing your exposure to the market. A ‘Stop Loss’ order secures your currency if the rate drops below a certain level, giving you a worst case scenario. A ‘Limit Order’ secures your currency at a higher rate should you be targeting a particular level. We also offer free rate alerts, and exceptional rates of exchange for both private and corporate clients.

Make a free enquiry today or email me if you would like to discuss how we can help with your currency requirements michael@currencyforecasts.co.uk

Pound exchange rates rally. Will we see a general election?

Pound exchange rates

Pound exchange rates rallied yesterday afternoon as new PM Boris Johnson lost his first vote in the Commons. His first vote as the new PM saw him lose to the Tory rebels and opposition MP’s who object to a no-deal Brexit. As a result GBP/EUR pushed from 1.0960 to reach 1.1050 this morning. We have also seen GBP/USD push from 1.1960 to 1.2150.

Why has the Pound rallied?

With the Commons voting 328 to 301 allowing them to bring a bill requesting a Brexit delay, this has eased concerns of the UK crashing out of the EU on the 31st October without a deal. This has lent some support back to pound exchange rates, although there is still plenty of uncertainty. MP’s will now vote on the Brexit bill, if it passes the vote on whether to hold an election will follow.

Will an election help the Pound?

In my view, no. One thing a market doesn’t like is political uncertainty and the prospect of a Jeremy Corbyn lead government could see the pound tumble.

Mr Johnson has tabled a motion in Parliament seeking approval for an “early general election” but has not specified a date. However Labour have said a bill to remove no-deal needs to be passed before they will support a call for a general election.

Today will see Boris Johnson’s first Prime Minister Questions at 12:00, followed by the Brexit bill debate at 15:00. The first vote on the bill is scheduled at 17:00 with the second round at 19:00. At 20:30 we could see a possible government motion on holding a general election, followed by a vote. As you can see today could see some further volatility and the current sterling rally could be short lived.

Looking for the best exchange rates?

If you need to convert a large sum, to purchase overseas for example, then get in touch to see how we can help. We offer a free consultation over the phone to discuss your requirements and explain the various options you can consider. We can also provide you with a free quote for you to compare with your bank or existing broker. Our rates are up to 5% better than available elsewhere, so you could save thousands.

Click here to send a free enquiry today or email me at michael@currencyforecasts.co.uk

Pound/Sterling forecast

Pound/Sterling forecast

Good afternoon and I hope you all had a nice weekend. As with typical Monday posts I will explore the key data sets to look out for this week and how this could impact pound/sterling exchange rates. I will focus on GBP/EUR, GBP/USD and GBP/AUD.

Monday 2nd September – To start the working week and a new month we have no data from the US with it being Labor day. This being a US bank holiday. Early this morning we had a host of manufacturing figures released by Markit. UK figures contracted from 48.4 to 47.4 causing the pound to fall in early morning trading.

Tuesday 3rd September – Overnight we will see retail sales data from Australia. Following this will be the statement from the Reserve Bank of Australia. Any insight to a future interest rate cut from the Central Bank and we could see the AUD weaken. In the afternoon session look out for Markit manufacturing data from the US at 13:45. We will also see the UK court hearing begin today. This being the legal bid to prevent PM Boris Johnson’s government from suspending parliament. Developments around this could cause significant volatility for the pound.

Wednesday 4th September – Today is heavy with European data. This starts with Markit Services at 09:00. Following this at 10:00 will be retail sales. Month on month figures expected to decline from 1.1% to -0.6%. This afternoon will see a number of speeches from key members of the Federal Reserve. Their insight into the US market will be scrutinised and impact GBP/USD accordingly.

Thursday 5th September – Overnight will see trade balance data from Australia. There will be no UK data but the continuation of the UK court hearing on forcing a no-deal Brexit will be key for short term sterling trends. This afternoon is dominated by US releases. Look out for initial jobless claims at 13:30 followed by market services at 14:45.

Friday 6th September – To finish the working week we have Euro Zone GDP figures at 10:00 along with employment change. This afternoon will see key jobs data from the US with non-farm payroll. This release is notoriously volatile and often vastly different from the expected level. As a result look out for USD volatility post the decision at 13:30.

Looking for the best exchange rates?

We can help anyone looking to convert currency on a bank to bank transfer basis. We don’t deal in cash or holiday money, but if you are buying property overseas, topping up a bank account, or a business that makes or receives payments in foreign currencies, it’s highly likely we can save you money.

Contact us today or email me for a no obligation quote michael@currencyforecasts.co.uk

Sterling steadies after Queen agrees Prorogation

GBPEUR

Sterling steadies after Queen agrees Prorogation. In yesterday’s post we covered the breaking news that the government planned to suspend parliament. This happened quicker than many thought, with the Queen agreeing to prorogue parliament. Sterling fell by around 0.7% against the Euro and US Dollar However, it didn’t fall as much as many thought it would. Let’s look at why.

Why didn’t prorogation cause Pound fall further?

Many thought that Sterling would continue falling. There are 2 reasons that the losses were limited.

Firstly, not much has really changed since yesterday. Despite all the headlines of a ‘constitutional outrage’, the situation remains largely the same. Parliament would not have been sitting anyway for much of the time due to party conferences.

Typically in September/October parliament goes into recess for around 20 days for party conferences. The shutdown of parliament is therefore only adding 3 days to this regular shutdown. It does limit the time MP’s have to try and pass legislation to avoid a No Deal Brexit, but only by 3 days. Prorogation is something that usually happens every year, but it largely goes unnoticed. It could be argued that given MPs have been debating this issue for 3 years, what could have been achieved in these extra 3 days would have been questionable.

The other reason the Pound didn’t tumble further is the simple fact that Sterling is already oversold. The Pound is cheap and attractive to investors. It has already been heavily sold in recent months so that also limited the losses for the Pound.

Will the Pound go up or down?

The answer to this questions hasn’t changed, and it all depends how the markets view the chances of a ‘No Deal’ Brexit. If Boris can agree a deal with the EU in October, then the Pound is likely to surge in value. MP’s could manage to pass legislation to avoid a No Deal Brexit, and this could also cause the Pound to rise. However, their plans to do this could result in the EU refusing to make concessions. Their attempts to avoid a no deal could actually have the opposite effect.

The legal default, passed in legislation by MPs, is that the UK will leave the EU at the end of October. If there is no deal agreed, and no extension offered, then the only other result would be a No Deal brexit. This would almost certainly send Sterling crashing to 10 year lows against the Euro and 36 year lows against the US Dollar.

Protecting yourself against adverse rate movements

There are so many possibilities in the next few months, rates could move either way, by large margins. If you need to convert currency then this volatility could cost you thousands if rates move against you.

We offer various ways to protect against adverse rate movements. A ‘Forward Contract’ allows you to freeze the current rate for up to 12 months, removing your exposure to the market. A ‘Stop Loss’ order secures your currency if the rate drops below a certain level, giving you a worst case scenario. A ‘Limit Order’ secures your currency at a higher rate should you be targeting a particular level. We also offer free rate alerts, and exceptional rates of exchange for both private and corporate clients.

Make a free enquiry today or email me if you would like to discuss how we can help with your currency requirements.

Pound falls as No 10 plan to suspend Parliament

Government to suspend Parliament?

Good morning. Sterling has fallen this morning amid reports that the government will ask the Queen to suspend Parliament. The news broke a short while ago, and reports say that this will happen days after Parliament returns next week, making it highly unlikely that MPs can pass any laws to try and block a ‘No Deal’ Brexit.

The chances of No Deal being removed were the reason for Sterling rising yesterday. If today’s news is true then it means there is little MPs can do. It does however strengthen the negotiating hand, as it means the EU can’t rely on parliamentary manoeuvers to block a No Deal, meaning it’s more likely that compromises will be made. If they do not compromise however, No Deal is now more likely and that is why the Pound has dropped this morning.

GBP/EUR 28th August 2019

We’ll report more on these developments as we hear more. In the meantime, if you need to make a currency transfer, then why not compare our rates? The first step is to make a free enquiry, and we can talk you through setting up a free account. This will then allow you to log in to our website 24/7, and see our live trading levels. We often provide rates up to 3% better than banks or other brokers could offer.

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