Showing posts from April, 2009

Pound gains against Euro & Dollar

Overview of Yesterday's TradingThe pound gained yesterday, hitting the highest level in over a week against the US Dollar. The main reason for the rise was the rise in global equities coupled with the easing of risk aversion.
As I have said all week, the swine flu situation has given investors the jitters, and in uncertain times like that, funds flow back to the safe haven currencies such as the US Dollar and Yen.
The fear now seems to have subsided, and as funds move back to the currencies that are percieved to be a higher risk such as Sterling, exchange rates have risen.
The FTSE rose by over 2% also yesterday, which also supported the pound, in particular against the US Dollar and JPY. Also helping the pound was the better than expected retail sales data for the UK, which has given slight hope that the UK economy may be starting to recover. I've talked about the Euro all week, so today we'll take a closer look at some of the other major currencies - the US Dollar, New Z…

Pound rates to EUR, USD, JPY and NZD

Sterling GBP Euro EUR
Sterling made steady gains yesterday, after better than expected retail sales data. Some analysts say the figures are skewed slightly because its over the easter period, when sales are often artifically inflated.

The effect of swine flu as outlined in yesterdays report stemmed the pounds gain, as traders moved towards the Yen and USD as they do in times of uncertainty.

Today for the EU we have Industrial Confidence (index that measures the level of industrial executives confidence in economic activity), Consumer Confidence (measures the level of consumer confidence in economic activity) & Economic Confidence (survey of consumers confidence in economic activity). On there own the releases are normally fairly minor, however together they will be taken as a barometer of how investers see the European economy faring.

There is talk of cutting interest rates in the EU next month, and also money may be created. After a horribly few weeks for the pound, I believe that…

The effect of Swine Flu on Exchange Rates

Today we'll have quick look at where the markets stand after yesterday, the look at the effects Swine Flu are having on the currency markets and finally today's data and what it may hold in store for Sterling exchange rates.

As we correctly predicted yesterday, Sterling to Euro rates rose throughout the day, making back some of the pounds fall from last week. This morning however, rates have started to come back down due to fears over the Swine Flu, and also figures that showed even though UK house prices still fell year on year, it was the slowest decline in 12 months, which gave positive signals for the UK economy.

However, other figures have cast doubt on a housing sector recovery. The British Bankers Association said the number of mortgages approved for new property in Britain fell by a quarter year-on-year in March. So, markets wait for further figures to gauge which direction things may be going.

We may see more decline in the GBPEUR rate today due to swine flu affec…

Pound to Euro rate set to rise?

Last Week
After a gloomy budget already well covered here last week, sterling fell in a big way, hitting a 2 week low against the Euro, after data showed the economy's fall in Q1 was its fastest in 30 years, casting doubt on the government's 'fantasy' economic outlook.

The pound did recover slightly at the end of the week against the dollar, but remained poor against the Euro, dropping from a high above 1.13 back to around 1.10. Sterling also faced pressure after a UK newspaper reported that ratings agencies like Moodys were concerned about Britain's rising debt levels - as indeed the general population are!

In the budget it was said that the national debt would reach £1.4 tn pounds in the next five years - this obviously did not help the pound. I read an interesting article in the Sunday Times yesterday that the measures will cripple an entire generation.

GBPEUR this week - a rise on the cards?
As outlined already in this blog over the last week, the pound had a batter…

Pound GBP Euro EUR forecast 2009

Good Morning. Today we have Gross Domestic Product (GDP) figures and Retail Sales data for the UK, both of which will be released at 09:30am. In a moment we will take detailed look at how this will affect Sterling exchange rates, and also the effect the EUR value is likely to have on GBPEUR exchange rates.

First, let's take stock of where the markets are after an important week for the currency markets.

Where the pound is after the UK Budget
After the budget, as detailed already in this blog, the pound fell dramatically as the government announced huge debt and tax rises, painting a gloomy picture for the UK for the next 2 years. Exchange rates fell very quickly.

Yesterday however, the pound made some gains as investors took profits on Sterlings fall after the budget statement. There is still caution about Britains increasingly grim public finances however.

Some currency traders took full advantage of Sterlings fall to a three-week low on Wednesday and bought Sterling back to make …

Sterling Euro Outlook Forecast

Budget Statement and effect on Sterling

Yesterday we saw the chancellor Alistair Darling give his budget statement, which was as expected extremely dire. It showed massive debt & big tax rises. The fear of complete inability to service these debts caused big drops in the pound as I correctly forecast yesterday. The key points of the budget were as follows:
50% tax for £150k + earnersMassive debt and deficit increasesEconomy shrinking at record ratePublic spending dramtically cutBooks wont balance until 2018Fuel, Alcohol and Cigarettes up£15billion public sector 'efficiency savings'£2,000 old car scrapping schemeAs soon as the Chancellor opened his mouth, the pound started to fall. It hit a 3 week low against the dollar, and 1.5 cent drops against the Euro:

Here we see yesterdays GBPEUR chart to give you an example of how quickly the currency markets reacted to the bad news. Can you guess when Darling started to speak?! We immediately saw big drops in rates across the board, a…

Effect of UK Budget Statement on the pound.

GBP/EUR rates
Today is extremely heavy with UK economic data, so expect big volatility in exchange rates. Before we look at what's being released, the budget, and the effect on exchange rates, lets take a quick look at where the markets are now after yesterday.

Exchange Rate Summary
Sterling did gain slightly yesterday, after inflation measures showed that the UK has not yet entered the dreaded deflation. Some newspapers had dramatic headlines to the contrary, but of course they were looking at the RPI - Retail Price Index. The true official measure of inflation remains the CPI - consumer price index. These figures were slightly better than expected, strengthening the pound through 1.13 on the Euro.

The Pounds rise
The pound has had a steady run over the last 6 weeks, with GBPEUR rising from 1.0550 to where we are today. GBPUSD recently was in the 1.35's and has now risen to over 1.50 before dropping back away. Prices for purchasing foreign currency with Sterling are significantly …

Inflation & Exchange Rate Forecast

Today we see inflation measures for the UK released at 09:30. We have the CPI (Consumer Price Index) and RPI (Retail Price Index). CPI is expected to fall from last months 3.2% down to 2.9%. This is still well above the target of 2%.

The drop is expected to be caused by falls in energy bills, but because Sterling is so weak at the moment, food prices are expected to remain high as importers suffer higher costs due to lower exchange rates.

Normally, high inflation would mean a likely hike in interest rates by the Bank of England to try and keep it in check, however in the currency economic climate, it's highly unlikely to happen. If anything, the bank would like to drop rates further to try and stimulate spending, however rates are almost at zero anyway, which is why money is being created through quantitative easing.

Inflation and Exchange Rates
Usually higher inflation as desrcibed above would lead to higher interest rates as already mentioned. These higher interest ra…

Sterling/Euro Sterling/USD rates falling?

Last week after making steady gains for almost a month against both the US Dollar and the Euro, Sterling starting moving back and rates fell away from some of the best buying levels we have seen all year.

The reason for initial gains were a weakening Euro following news they may also make a foray into Quantitative Easing, much like the US, UK and Japan have already done. This meant investors became wary over value of the Euro, and so started to move funds into other percieved safer currencies - this weakened the Euro and pushed rates above 1.13 briefly however have now dropped away.

The pound fell on Friday after UK Trade and Investment Minister Mervyn Davies said that he was 'not worried' about a further slide in the currency, and added that a weak currency would help the British economy out of the recession. So, this may be good for exporters, however anyone needing to buy foreign currency with Sterling will not be pleased with the statement, as it indicates that further drops…

GBP Exchange rates start to drop.

After making substantial gains in recent weeks, the pound fell across the board yesterday after weaker global economic data affected exchange rates. The pound had risen in the last month from 1.0550 to over 1.13 on the Euro. Against the dollar rates have risen from the 1.30's up to 1.50 this week.

Figures yesterday showed China had the weakest quarterly growth since records began, and there were also sharp falls in EU and US industrial production. The bad news dented the slightly optmistic view this week that the world economy was starting to recover. The dented confidence mean the percieved weaker currencies such as the pound fell victim, as cautious investers moved funds back to the safe haven USD.

US Dollar
"I think we're still in a range... on sterling/dollar... but $1.50 for sterling was about the top of that range, which leaves more risk to the downside for the pound," Standard Bank currency strategist Steve Barrow said. So it looks like after a steady run fo…

Sterling GBP Euro EUR Outlook Forecast 2009

GBP/EUR 1.1358
GBP/USD 1.4963
GBP/AUD 2.0705
GBP/NZD 2.6138
GBP/JPY 147.73

The pound continued its gains yesterday against most major currencies, breifly breaking through 1.50 against the US Dollar and smashing through 1.13 on the Euro. Prices at the time of writing are above, and live prices can be seen in the sidebar of the blog.

Why did Sterling gain?
Well, the pound got a boost after figures yesterday showed house prices in the UK fell again last month, however the fall was the slowest in 12 months and sales actually picked up from record lows.

Geoffrey Yu, currency strategist at UBS commented "The pound's rise is a combination of bona fide sterling strength from the housing data and the Europeans playing catch-up with regard to quantitative easing," said.

GBPEUR Sterling EuroForecast
So, as the pound made gains following the good housing news, speculation that the European Central bank will make a foray into 'Quantitative Easing' also weakened the single cur…

Sterling Euro Dollar Rates for 2009

Sterling gains yesterday Sterling hit a 6 week high against the Euro yesterday, breaking through 1.12 towards the end of the day. We are also at a 2 month high against the US Dollar.
The main reason for the pounds increase, was the first quarter figures from UK Bank Goldman Sachs being better than expected, causing those and other banking shares to rise. This supported the pound, because the UK is so heavily reliant on the finance sector, and in particular the banking sector.

There were also better than expected results for some US banks, which mean that there is increased optimism for the UK banking sector. This will probably support Sterling in the short term, and we may see gains extend slightly.

As outlined in yesterdays report, this week is very light for UK data, so movements in Sterling Exchange rates will likely be driven by external factors such as share prices. GBPEUR

Here we see the GBPEUR chart for the last month, clearly illustrating the big rise in exchange rates for the Eur…

Best Sterling Exchange Rates EUR THB USD

Good morning, and welcome back to our regular readers after the easter break. Sterling exchange rates for the Euros are at a 5 week high, and dollar rates remain just under 1.50.

This week is fairly busy in terms of data releases for the US and EU which will no doubt affect Sterling exchange rates across the board. This data is outlined below, with the dates released. Please get in touch for a detailed outline of how these data releases may affect your requirement.

Sterling GBP Euro EUR
The pound is now trading at a 5 week high against the Euro, having steadily risen for the last month. Rates have increased from 1.0550 to almost 1.12. This is more than a 5% increase, and on a €200k purchase makes a difference of £11k. The reason for the increase is mainly the Euro weakening.

Last week we saw the Bank of England (BoE) announce their decision to hold interest rates at 0.5%. This is the first meeting since September last year that rates have not been cut. It was no surprise, as the central b…

Sterling Euro Exchange Rates Gain

Yesterday the EU revised their GDP figures, and this shows that the economy shrank in 2008 more than originally thought. Despite the bad news about UK condfidence yesterday (see below) GBPEUR rates have climbed due to the weaker Euro following the news.

"Worryingly it is far from inconceivable that EU GDP contraction was deeper in the first quarter of 2009, given the largely dire data and survey evidence," said Howard Archer an economist. "This will hopefully have marked the low point in the downturn, although recovery currently still looks some way away, " he added.

In my opinion this spike in rates may well be short lived, as tomorrow we have lots of very important data from the UK that is likely to be fairly poor. The pound is still very weak, and remember it is the weak Euro thats pushing rates up rather than any strength in Sterling. This is made clear when you see other Sterling Exchange rates such as GBPUSD falling away yesterday.

UK Consumer Confidence

Sterling GBP to AUD, JPY, USD

Today we have lots of news from different areas of the world. The combining factor seems to be that the global recession shows little sign of releasing it's grip on the world economy, and many different economic zones are suffering as a result. This is causing unprecendented volatility in the markets, as currencies become stronger or weaker depening on the view of each economy. Let's take a quick global tour and see how the economic news that we see every day actually affects exchange rates:
USA The weakness of the dollar was very short lived yesterday, with exchange rates for Sterling to Dollar dropping away from 1.50, and settling this morning at 1.4725. As mentioned in yesterdays post, spikes in the market are often very short lived, and it is the buyer that has their trading facility open and ready to use that is in a position to take advantage of better rates. GBPUSD is now significantly better than this time last month as you can see from the chart.

With lots of UK data re…

GBP/EUR and GBP/USD forecast

This week we have lots of economic data releases from the EU, US and UK. Today though is mainly EU data, with lots of UK releases tomorrow. Let's take a quick look at currency movements last week, and the outlook for Sterling Exchange Rates for the 2 most traded currencies - the US Dollar and Euro, and just what the future may hold in store.

GBP/USD Sterling to US Dollar rose again on Friday. The reason was two fold; slighty better than expected services data for the UK which strengthened the pound. We also saw negative jobs data from the US; the number of people unemployed in the US rose by 663k in March which was much higher than expected.
The jobless rate rose to 8.5% unemployed - almost a half percent increase from February's figure. Unemployment in the states is now the highest since 1983. The bad news on the jobs front followed figures released last thursday showing that claims for unemployment insurance rose to 669,000 last week from the previous week's revised figure …

G20 & Exchange Rates

Today we will look at the impact of the G20 summit on exchange rates. First lets look at yesterdays movements and the forecasts for GBPEUR and GBPUSD.

Sterling gained broadly yesterday, rising by more than 1.5% against the US Dollar on the back of optimism about the coordinated steps after the G20 meeting of world leaders. (more on this below)

Investors were encouraged to purchase assets perceived to be risky, including sterling, after sources said the latest draft of the G20 calls for an increase of International Monetary Fund resources.

Rates are looking pretty good for this currency pair, at 1.0974 at the time of writing. Rates increased yesterday after better than expected house price data for the UK, and also the expectation of a 0.5% interest rate cut by the European Central Bank. This pushed the rate over the 1.10 level.

However, when the ECB announced their decision, they have played it safe with just a 0.25% cut. The lower than expected movement caused some strengt…

Sterling Exchange Rates Gain

Snapshot of rate movements this morning:
GBP/EUR +0.44%GBP/USD +0.44%GBP/AUD -0.05%GBP/NZD +0.25%GBP/CAD +0.06%GBP/ZAR +0.08%GBP/CHF +0.71%GBP/THB +0.32%Sterling Gains
Sterling has gained against most currencies after better than expected manufacturing data yesterday, and also figures this morning that have showed a rise in UK house prices for the first time in ages.

The pound has risen against the US dollar and the Euro. The rate of decline in British manufacturing eased much more than expected in march, which is a possible sign that the very low interest rates might be having some impact. Where it has weakened the pound and lowered exchange rates, it has been good for some sectors in that it has made exports cheaper for overseas buyers, which is one reason this sector is doing better than expected.

Analysts said although the figures were an improvement and could be a signal of massive UK monetary easing taking effect, overall conditions for the UK economy remain very bleak indeed.


Sterling Exchange Rates 2009

Today we'll look at risk. First lets take a quick look at where the pound is this morning against a basket of major currencies....

Sterling Gains against Euro
The Sterling Euro exchnage rate oulook improved this morning, after the pound made gains against the Euro. Exchange rates for this currency pair are now getting close to 1.09 at the time of writing. The reason for the increase in GBPEUR exchange rates is the interest rate decision by the ECB tomorrow....

The ECB announce their decision at 12:45 tomorrow. Yesterday we saw data that shows EU inflation has plunged to an all time low. This means it is highly likely we will see an interest rate cut tomorrow. When inflation is low, often central banks will use a cut in interest rates to spur the economy. I think we'll see them cut rates from 1.5% to 1.0%. A half point cut that could boost rates a bit more. Let's see if I'm right tomorrow!

What does a cut mean for exchange rates?
Where an interest rate cut may be positive in…