Showing posts from October, 2010

Sterling remains firm against EUR & USD

29th October 2010
Good morning. Sterling rose one percent against a broadly weaker dollar and outperformed the euro on Thursday as investors looked to push the currency higher in a choppy market, offsetting disappointing UK housing data. Rates at 08:30am are as follows: GBP/EUR 1.1466 GBP/USD 1.5903 GBP/AUD 1.6313 GBP/NZD 2.1060 GBP/CAD 1.6253 GBP/CHF 1.5673 GBP/ZAR 11.137 GBP/JPY 128.23 GBP/HUF 312.65 EUR/USD 1.3867 Pound remains firm vs Euro and US Dollar
Despite poor housing data for the UK, Sterling remains firm following good GDP data earlier in the week. Sterling has benefited since stronger-than-expected third quarter UK gross domestic product data on Tuesday eased concerns about an imminent need for further quantitative easing from the Bank of England.

But analysts said the UK economic outlook remained cloudy, with QE a possibility if the economic situation worsens, although the BoE is expected to leave policy on hold at its meeting next week."We have had a very volatile week after th…

Sterling slips on poor housing data

28th October 2010
Good morning. Yesterday Sterling fell vs a stronger US Dollar, but held steady against the Euro. This morning however, the pound has fallen after very poor house price data. This morning at 08:30am rates are as follows:

GBP/EUR 1.1410GBP/USD 1.5772GBP/AUD 1.6163GBP/NZD 2.1016GBP/CAD 1.6176GBP/CHF 1.5571GBP/ZAR 11.117GBP/JPY 128.10GBP/HUF 313.66GBP/NOK 9.2813EUR/USD 1.3817Pound slips on House Price data

House prices dropped in October compared with the previous month as the property market saw an autumn fall, according to the Nationwide. The building society said that prices were down 0.7% compared with September, with the average home now costing £164,381. The figure was expected at -0.3% and so the worse figures pushed the pound lower.

As we said earlier in the week, as Sterling is very volatile at the moment any data, positive or negative, is having a significant effect on exchange rates.

GDP data earlier in the week was above forecast and the pound rose. Today house pr…

Pound gains on UK growth data

27th October 2010
Good morning. Sterling rallied well yesterday following much better than expected economic growth for the UK, coupled with a vote of confidence by a credit ratings agency. Rates at 08:30am are as follows:

GBP/EUR 1.1440GBP/USD 1.5768GBP/AUD 1.6260GBP/NZD 2.1147GBP/CAD 1.6239GBP/CHF 1.5595GBP/ZAR 11.051GBP/JPY 129.11GBP/NOK 9.3137EUR/USD 1.3777Sterling gains on GDP dataIt's certainly been a volatile week for the pound. On Monday rates against the Euro dropped into the €1.11's, however by today we are 3 cents higher at €1.1440. The reason for the remarkable turnaround is better than expected Gross Domestic Product. GDP is a measure of the total produced by the UK, and this increased by 0.8% according to figures released yesterday. Most analysts only expected a 0.4% gain, and so the economy grew by twice than forecast. The pound immediately gained against other currencies, and markets now see the pound as less of a risk than they did on Monday. It's likely the…

Currency markets await UK GDP data

26th October 2010
Good morning. The pound hit it's lowest in 7 months against the Euro yesterday on QE fears and today's GDP figures. This morning Sterling has recovered slightly though, and rates as at 08:30am are as follows:

GBP/EUR 1.1300GBP/USD 1.5787GBP/AUD 1.5915GBP/NZD 2.0949GBP/CAD 1.6079GBP/CHF 1.5347GBP/ZAR 10.875GBP/DKK 8.4253GBP/JPY 127.66GBP/HUF 308.27EUR/USD 1.3966Pound weak against Euro and US Dollar

Sterling started the week badly falling against most currencies, and a 7 month low against the Euro. The reason why is fears the Bank of England may pump more money into the economy through Quantitative Easing.

Today however the Euro has also weakened helping rates recover back to €1.1300. Many analysts are being very bearish on the pound, with some forecasts now suggesting GBP/EUR may fall to €1.08 and GBP/USD may fall to $1.40 by June next year.

GDP Figures

Much will rest on today's GDP figures. Investors were concerned weak UK third quarter gross domestic product d…

Weekly forecast for Sterling exchange rates

25th October 2010
Good morning. Sterling is down again against the Euro this morning, continuing it's downward trend. At 08:30am rates are as follows:

GBP/EUR 1.1200GBP/USD 1.5725GBP/AUD 1.5798GBP/NZD 2.0868GBP/CAD 1.6021GBP/CHF 1.5234GBP/ZAR 10.805GBP/JPY 126.54GBP/HUF 305.66EUR/USD 1.4037Pound vs Euro

In a week which saw ‘Wayne Rooney’ take most of the headlines it was almost forgotten that Chancellor of the Exchequer ‘George Osborne’ had stepped up and spoken about the radical changes he was going to implement to the British economy.

Fiscal deficit in the UK is up at a whopping £178 Billion and while cuts are absolutely essential it is going to hit the spine of Britain a lot harder than first thought. The coalition Government has to be very careful that they don’t drive the British economy into another deeper and darker recession.

The economy is currently precariously balanced by the fact the spending cuts are positive for the pound, while there is also the risk the cuts could push …

Pound falls again on Retail Sales

22nd October 2010
Good morning. The pound fell again yesterday after poor retail sales, which only added to the view the UK economy is still in a precarious state. Today we'll look at the data this week that's caused the pound to fall. Rates at 08:30am are as follows:

GBP/EUR 1.1279GBP/USD 1.5683GBP/AUD 1.5996GBP/NZD 2.0969GBP/CAD 1.6112GBP/CHF 1.5268GBP/ZAR 10.876GBP/JPY 127.20GBP/NOK 9.1934EUR/USD 1.3906Sterling falls on Retail SalesBritish retail sales unexpectedly fell for the second month in a row in September, lending weight to the view that the UK economic recovery has peaked. Retail sales are seen as an indicator of consumer confidence, and the low figures suggested that the recovery is still fragile.

As a result, the pound fell yet again to a 5 month low against a basket of major currencies. Versus the Euro, Sterling fell into the €1.12's. Only a few months ago, the rate was at €1.2250 which illustrates how much rates can change in a short period of time.

There are a …

Pound falls AGAIN on BoE comments

21st October 2010
Good morning. The pound has fallen to a new low against the Euro this morning, as the Bank of England chiefeconomist said that there is uncertainty over inflation and the economic recovery. We'll look at this today, in addition to how the spending review affected rates. First the usual snapshot of rates as at 08:30am:

GBP/EUR 1.1267GBP/USD 1.5746GBP/AUD 1.5982GBP/NZD 1.5981GBP/CAD 1.6068GBP/CHF 1.5188GBP/HKD 12.221GBP/JPY 127.63GBP/ZAR 10.868EUR/USD 1.3974Pound falls on BoE CommentsThe comments from the chief economist increase the chance the bank will opt for more Quantitative Easing next month at their November meeting. This seems certain to happen now, and it has been mostly priced into exchange rates. As a result, the GBP/EUR rate is the lowest since April this year. Bank 3 way split on QEThe Bank of England's Monetary Policy Committee was split three ways during its October meeting, released minutes have revealed. Seven of its members voted for no change t…

BoE Minutes and Spending Review today

20th October 2010
Good morning. Today is an important day, as we have not only the government spending review, but also the minutes to the recent Bank of England (BoE) minutes. We'll look at how the spending review and BoE minutes may move exchange rates after the usual snapshot of where things stand at 08:30am:
GBP/EUR 1.1394GBP/USD 1.5731GBP/AUD 1.6092GBP/NZD 2.1017GBP/CAD 1.6201GBP/CHF 1.5216GBP/ZAR 10.908GBP/HKD 12.205GBP/NOK 9.3064GBP/JPY 127.78EUR/USD 1.3800 Bank of England Governor speaksYesterday evening Mervyn King, the BoE Governor spoke Mr King was speaking to an audience in the West Midlands on the eve of the government's Spending Review. He described the sober decade as one of "savings, orderly budgets, and equitable re-balancing". The negative view will do little to support the pound, and it's probably the case they are talking the pound down to try and weaken the currency to boost exports. As I posted recently the weakening of currencies may lead to …

Sterling weakens / Pound vs NZD

19th October 2010
Good morning. Sterling fell against the Euro and US Dollar yesterday. The pound is weak due to this weeks Bank of England minutes, and the spending review due to be announced by the government tomorrow. Rates at 08:30am are as follows: GBP/EUR 1.1378GBP/USD 1.5833GBP/AUD 1.6027GBP/NZD 2.1019GBP/CAD 1.6151GBP/CHF 1.5202GBP/ZAR 10.951GBP/JPY 128.88GBP/NOK 9.2870GBP/PLN 4.4713Sterling weak on BoE and spending review

Despite good house price data for the UK, analysts say the pound remained vulnerable ahead of the release of the UK government's spending review on Wednesday, which is set to deliver the biggest public cuts in decades. We had a detailed look at what the Spending review might mean for the markets in yesterdays report.

That could renew speculation the Bank of England would opt for more quantitative easing to offset the adverse impact of fiscal tightening. BoE meeting minutes also due on Wednesday were expected to show policymaker Adam Posen had voted for more…

Spending Review cuts & exchange rates

The Spending Review and the effect on exchange rates
It’s finally arrived. The UK's "age of austerity" will begin in earnest this Wednesday when the government announces the results of its Spending Review. It will give us the details of which government departments will need to cut their spending, and by how much.

With debt expected to reach £900bn (70% of GDP) in the coming years, the cuts are expected to be severe. This week then, in addition to the usual releases below, it’s the spending review announcement that will likely dominate the currency markets.

We expect the usual media leeks well before the official announcement on Wednesday, so we could see volatile swings in rates at any point. We also have the BoE minutes, so we’re in for some uncertain times, and it’s going to be pivotal for the Pound.

If you haven’t already, we suggest having a trading facility open and ready to use. It’s free to open, and allows you to take advantage of a free consultation on tools availa…

Currency War and the effect on Exchange Rates

Rates remain above $1.60 against the US Dollar, and still just under €1.14 against the Euro. With little data released yesterday for the UK it was weakness in the US Dollar that caused rate movements yesterday.

For something a little different today, we'll have a look at the recent talk of a 'Currency War' and what this may mean for exchange rates.

Currency War
In recent weeks, there have been warnings over an economic ‘Currency War’ from the International Monetary Fund (IMF) and the United Nations (UN).
So, what exactly is a currency war and what will this mean for exchange rates when purchasing abroad?
In the wake of the global economic crisis, countries want their economy to grow as fast as possible. With low interest rates and spending cuts on the horizon, this leaves an increase in exports as one of the only ways to boost investment into a country.
Economies are therefore trying to devalue their currency to make exports more attractive, and boost investment.
The problem …

Pound up against USD, Pound down against EUR

14th October 2010
Good morning. This morning Sterling is up against the US Dollar, above the $1.60 mark. The pound remains very weak against the Euro however with rates still in the €1.13's. Today we'll look at why Sterling is up against one currency but down against another. Rates at 08:30am are as follows:

GBP/EUR 1.1377GBP/USD 1.6034GBP/AUD 1.6062GBP/NZD 2.0987GBP/CAD 1.6014GBP/CHF 1.5253GBP/ZAR 10.850GBP/HKD 12.441GBP/JPY 130.19EUR/USD 1.4091Pound up against US DollarThe reason Sterling us up against the US Dollar is actually to do with dollar weakness. Yesterday the FED chairman was fairly dovish in a speech, and analysts believe they will soon resume their Quantitative Easing (QE) measures.QE is where they will create money to pump into the economy to help support the recovery. As with any supply and demand, when there is more of something it is cheaper, and that's what we're seeing with the Dollar. Pound down against EuroDespite rising against the US Dollar, Sterl…

Sterling continues to fall vs Euro

13th October 2010
Good morning. Sterling has fallen again vs the Euro, after further Bank of England comments about possible Quantitative Easing. As a result, the pound has weakened and exchange rates have dropped. Rates at 08:30am are as follows: GBP/EUR 1.1355GBP/USD 1.5854GBP/AUD 1.6079GBP/NZD 2.0947GBP/CAD 1.5986GBP/CHF 1.5177GBP/ZAR 10.826GBP/JPY 129.77GBP/HUF 309.72GBP/AED 5.8199EUR/USD 1.3968Bank of England - more Quantitative Easing?One of the MPC members has again been vocal in the need for more Quantitative Easing. Next Wednesday we see the minutes to the last meeting, and if QE was indeed discussed, expect the pound to fall. There has been more negative UK data too, which we'll look at below.

UK Consumer Confidence FallsConsumer confidence is now at its lowest level for more than a year, the Nationwide building society has said. Its monthly Consumer Confidence Index fell to 53 for September, down nine points from August. Nationwide said sentiment had been hit by fears ab…

Our Dealing Director on CNBC / Currency War

12th October 2010
Good morning. Yesterday was quiet in the markets due to the US holiday. Sterling has risen very slightly against the Euro. Today with all the talk of a Currency War, we'll watch our dealing director on CNBC. He discusses with the Bank of England's MPC member their policy of de-valuing the pound. At 08:30am rates are as follows: GBP/EUR 1.1465GBP/USD 1.5863GBP/AUD 1.6174GBP/NZD 2.1148GBP/CAD 1.6096GBP/CHF 1.5338GBP/ZAR 10.919GBP/JPY 129.91GBP/HUF 313.27GBP/AED 5.8229EUR/USD 1.3832Our Dealing Director on CNBC :

For email subscribers, or anybody having trouble viewing the video, Click here to watch it on You Tube.

Today's Data to Watch - UK Inflation

For the UK, we have consumer prices which are an inflation indicator, and this may well have an impact on Sterling. We expect an annual change of 3.1% and no monthly change. If it's more than this expect the pound to climb. Less, and we'll probably see it fall.

We also have Retail sales and Trade Balance dat…

Pound vs Euro, Pound vs US Dollar, Weekly data

11th October 2010
Good morning. Today as usual on a Monday, we'll have a detailed look at how Sterling has performed against the Euro and US Dollar over the last week, in addition to the weeks data that we think will affect exchange rates.
Pound vs Euro
With Sterling hovering close to a 5 month low against the Euro on Friday we again had a fairly volatile week. Highs reached 1.1589 whilst Friday’s lows plummeted to 1.1354.
Last Monday’s publication of bullish, above estimate PMI Construction data caused a small jump in the value of sterling although this was short lived. The release of the EMU’s GDP data on Wednesday was positive for the Eurozone and reignited the Euros continued strengthening against the Pound.

The two major information releases for the week were the BoE and ECB interest rate decisions on Thursday. With both institutions choosing to remain dovish and not change rate levels of 0.5% and 1% respectively, this information actually had little effect on the GBP/EUR pairin…

Pound up vs USD, down vs EUR

8th October 2010
Good morning. As we predicted, the pound rose slightly yesterday after the Bank of England decision. The gains were short lived however, and Sterling is down against the Euro again. This morning at 08:30am rates are as follows:

GBP/EUR 1.1378GBP/USD 1.5847GBP/AUD 1.6201GBP/NZD 2.1165GBP/CAD 1.6108GBP/CHF 1.5329GBP/ZAR 10.943GBP/JPY 130.64GBP/NOK 9.2162GBP/HUF 312.11EUR/USD 1.3925Pound gains after Bank of England decisionThe bank left rates on hold as expected, and also decided to hold of more Quantitative Easing, for the moment. Speculation more stimulation would be required is the reason that the pound has fallen so much against the Euro in recent weeks. It's now likely the BoE will look at QE in November, so Sterling will probably remain under pressure. Many suspect the latest BoE decision was a compromise between a three-way policy split. Details of the vote will be released in two weeks' time.

"A three-way split looks to have been the likeliest scenario,…

Pound falls AGAIN vs the Euro...

7th October 2010
Good morning. The pound has continued to fall against the Euro this morning, and Sterling is now at it's lowest since June. Things could get worse today, depending on what happens with the Bank of England result at 12:00pm. Rates at 08:30am are as follows:

GBP/EUR 1.1366GBP/USD 1.5887GBP/AUD 1.6063GBP/NZD 2.1008GBP/CAD 1.6028GBP/CHF 1.5214GBP/ZAR 10.857GBP/JPY 131.12GBP/HUF 308.06EUR/USD 1.3980Pound continues to fall against Euro

Concerns that further monetary easing may be needed in the UK has hammered the pound this week. Each day we fall lower, as markets expect the Bank of England to resume Quantitative Easing.

The BoE announce their decision on interest rates and QE today at 12pm. We don't expect any move in rates, and to be honest we also don't expect an announcement on QE today. If there is no announcement, then we could see limited recovery for Sterling, but probably not much.

While markets are uncertain what route the BoE will take, investors have sold…

Pound up against USD, but remains low vs EUR

6th October 2010
Good morning. Sterling rose to a 2 month high versus the USD yesterday as the dollar fell to its lowest levels in more than eight months versus a basket of currencies. However the pound continued to lag vs the Euro as surprisingly good UK services sector data failed to kill off concerns that the economy may require further monetary easing. Rates this morning at 08:30am are as follows:

GBP/EUR 1.1475GBP/USD 1.5910GBP/AUD 1.6308GBP/NZD 2.1180GBP/CAD 1.6110GBP/CHF 1.5365GBP/ZAR 10.900GBP/HKD 12.338GBP/JPY 132.14EUR/USD 1.3863Sterling and US Dollar weakThe pound and the US Dollar are weak at the moment, due to speculation both the Bank of England and the FED will have to stimulate the economy again through Quantitative Easing. The weaker USD means it's cheaper to purchase and rates are now the best for a few months. Due to the weaker pound and a stronger Euro however, the current downward trend is continuing. The euro is stronger across the board, finding persistent dem…

Pound gains against Euro, but threat of QE limiting

5th October 2010
Good morning. Sterling staged a modest recovery against the euro yesterday as concerns about the health of peripheral euro zone countries weighed on the single currency. Today we'll look at this, and also a look at the Canadian Dollar. First the usual snapshot of rates as at 08:30am: GBP/EUR 1.1535GBP/USD 1.5799GBP/AUD 1.6533GBP/NZD 2.1364GBP/CAD 1.6201GBP/CHF 1.5334GBP/ZAR 11.064GBP/DKK 8.5967GBP/JPY 132.30GBP/HUF 314.86EUR/USD 1.3694Pound gains against EuroUK CIPS construction PMI was better than expected yesterday, and this helped push the pound up against the Euro following a 4 month low hit early Monday morning. However, the threat of further Quantitative Easing is keeping Sterling vulnerable.

More Quantitative Easing?

The Bank of England should consider pumping more money into the economy to help the recovery, according to a monetary policy committee (MPC) member.

External member Adam Posen advocated resuming the policy of quantitative easing (QE), under which t…

Pound vs EUR, Pound vs USD, Fundamental Data

4th October 2010

Good morning. Today we'll have a look at recent movements in GBP/EUR and GBP/USD. In addition we'll look at the weekly data that may affect rates.

Pound vs Euro

Once again the GBP/Euro pairing was volatile last week with highs reaching 1.1807, lows of 1.1509 and an average exchange rate of 1.1686. This equates to a difference of 2.59% between high and low leading to a difference of €6,475 on an exchange worth €250,000.

Last week saw the publication of UK GDP data which temporarily caused a positive shift in the value of Sterling. This was short lived and the value of the Pound against the Euro dropped off towards the end of the week.

Sterling has been relatively strong against the other major currencies last week leading analysts to speculate that it is primarily Euro strength which is causing the movement. The value of the Euro has managed to rise even in the wake of the increased bailout of Anglo Irish Bank and the downgrading of Spain’s credit rating.

Looking to …