Foreign Exchange Rate Forecasts: Sterling Euro Dollar Rates for 2009

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.

Here we see the GBPEUR chart for the last month, clearly illustrating the big rise in exchange rates for the Euro. Sterling may continue to rise as the Euro weakens, so there may be further room for levels to rise.

Do be aware however that the pound is still in uncertain times, as nobody knows what the results of the BoE's quantitative easing will be. If you are holding out for a highe rate, but also dont want to run the risk of the market moving the wrong way for you, then get in touch today to discuss Stop and Limit orders.

A similar story for the US dollar. Here you can see rates currently hovering at around 1.49. This is 6% better than just a few weeks ago, and on a $200k purchase, you would now pay over £8000 less. The market can just as easily retract though, especially as we have so much US data today. If this data shows that the US is in better health than expected, then I expect rates to drop. Of course if figures are very poor, then rates could continue to rise. Currently we are hitting resistance levels at 1.49, so if we do break that level, expect rates to improve.

House Prices
The RICS house price data released yesterday evening were better than expected, which has also helped prop up the pound at the moment. new enquiries for homes increased for the 5th straight month, signalling a possible start to the recovery in the housing market. However, this data needs to be taken into context. RICS is the Royal Institute of Chartered Surveryors, and of course surveyors are always among the most optimistic when predicting the turn in the market, as of course they have a vested interest!

Todays Data
We have some further minor UK housing data later this morning, but today like yesterday is primarily all US based data. However this can also effect Sterling and Euro values as investors move funds between the major currencies. See the chart in the sidebar of this blog to get a detailed outline of todays data releases. If you would like further information on how information like this can affect your currency purchase, please get in touch

So, the pound is has been making good ground on the major currencies. The question is will this continue through '09 or is this temporary and will rates drop away again? I'm afraid though that's a question no-one can answer! What I can say is that rates are significantly improved, so you may want to consider using the various tools available to maximise the exchange rate you get. It's market conditions like this that favours Stop and Limit orders to ensure you dont lose out.

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