Showing posts from March, 2011

Sterling remains weak despite GDP figures

30th March 2011
Good morning. Yesterday data showing the UK economy shrank slightly less than first thought in the final quarter of 2010 had little impact on the markets, but Sterling has made slight gains this morning. At 09:00am this morning stand as follows:
GBP/EUR 1.1377GBP/USD 1.6036GBP/AUD 1.5542GBP/NZD 2.1089GBP/CAD 1.5589GBP/CHF 1.4782GBP/ZAR 10.937GBP/JPY 132.98GBP/NOK 8.963GBP/HUF 303.28EUR/USD 1.4090
Pound unchanged on GDP figures

The Office for National Statistics yesterday revised 4th quarter GDP growth upwards to -0.5 % on the quarter from its most recent previous estimate of -0.6 percent, though the new figure is still the biggest decline since the second quarter of 2009.

Despite the GDP figures not being quite as bad as expected, analysts said the preliminary estimate for the first quarter of this year, due at the end of April, would be more significant.

Most movements in Sterling exchange rates at the moment continue to be driven by interest rate speculation. Hawkish…

Sterling lower on Interest Rates/GDP figures today

29th March 2011 Good morning. Sterling is lower this morning as we'll see in a moment. Markets are awaiting UK GDP figures at 09:30am which may well cause a significant change in Sterling exchange rates. At 08:30am this morning rates are as follows:

GBP/EUR 1.1329
GBP/USD 1.6015
GBP/AUD 1.5612
GBP/NZD 2.1277
GBP/CAD 1.5603
GBP/CHF 1.4643
GBP/ZAR 10.968
GBP/JPY 130.75
GBP/HUF 302.77
GBP/NOK 8.9436
EUR/USD 1.4131Sterling lower on interest rate expectations; GDP today
The pound fell broadly yesterday and again this morning, hitting a 5 month low versus the Euro and a 2 month low against the dollar. This was mainly due to a pullback in expectations on how soon interest rates may rise given a still fragile economy.
Sterling's falls have come as weak UK data raised concerns that poor economic growth could push back the timing of interest rate rises from the Bank of England. At the same time, investors expect euro zone interest rates to rise in April, a view that was pushing the euro higher.

Weekly GBP/EUR & GBP/USD Forecast

In this week’s Report:

• Sterling vs. Euro round up
• Where will GBP/USD rates move in the coming months?
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro

In the build up to last week all eyes were focussed on George Osborne’s budget on Wednesday, however, in what was a busy week it was UK retail sales that most affected Sterling’s performance against the Euro.

Monday started well for the UK with Rightmove house prices showing a slight increase although movement in the market is mainly limited to the top end. The market’s reaction was limited as traders were waiting for Consumer Price Inflation (CPI) out on Tuesday.

Consumer Price inflation is a key measure of the economy that looks at the change in prices of consumer goods and services purchased by households. February’s CPI figures were expected to show a growth from 4% to 4.2% but in fact came out better at 4.4%.

As expected the Pound began to g…

Sterling falls to new 4.5 low vs Euro

25th March 2011
Good morning. Sterling slid to a 4.5 month low against the euro yesterday as weak retail sales data raised concerns about a fragile economy while Moody's warned slower growth could make it harder to rein in the deficit. At 08:30am this morning rates stand as follows:

GBP/EUR 1.1361GBP/USD 1.6095GBP/AUD 1.5723GBP/NZD 2.1397GBP/CAD 1.5688GBP/CHF 1.4692GBP/ZAR 11.041GBP/JPY 130.35GBP/HUF 302.31GBP/NOK 8.9447EUR/USD 1.4161Sterling tumbles again vs EuroConcerns that a weak economy could push back the timing of a Bank of England interest rate rise pushed sterling lower just as the euro gained steam, with investors shrugging off doubts about Portugal as they anticipated a euro zone rate hike next month.

"Recently all the focus has been on the prospect of interest rates rising, but now people are thinking rate hikes will not come as quickly as they had been anticipating," said Richard Wiltshire, chief FX broker at ETX Capital.

With a raft of poor UK economic data in …

Sterling falls after Budget and BoE Minutes

24th March 2011
Good morning. The pound fell yesterday after less hawishBoE minutes, and the Budget that cut growth forecasts as we predicted in yesterdays post. At 08:30am this morning rates are as follows:
GBP/EUR 1.1508GBP/USD 1.6209GBP/AUD 1.5977GBP/NZD 2.1693GBP/CAD 1.5873GBP/CHF 1.4763GBP/ZAR 11.210GBP/JPY 131.04GBP/HUF 308.48GBP/AED 5.9496EUR/USD 1.4081Pound falls on BoEMintesYesterday minutes from this month's BoE policy meeting showed no more policymakers wanted to raise rates, with three out of nine MPC members backing a hike and the rest wanting to hold rates at a record low of 0.5 percent. Markets expected more to vote for a hike, and so the less hawkish results mean it's not likely rates will go up in the next month. This weakened Sterling and exchange rates fell.

The central bank said that there was a "significant risk" inflation could exceed 5 percent in the coming months but that it was too early to tell how strongly the economy was recovering after a su…

Inflation, Budget, BoE Minutes, Best Exchange Rates

23rd March 2011
Good morning. Inflation data yesterday was higher than expected, and this pushed the pound higher against the Euro slightly, but to a 14 month high against the US Dollar. We may see slight further gains after the BoE minutes this morning, but the Budget at Mid-day may take the wind out of Sterling sails. At 08:30am this morning rates are as follows: GBP/EUR 1.1529GBP/USD 1.6364GBP/AUD 1.6217GBP/NZD 2.2087GBP/CAD 1.6056GBP/CHF 1.4708GBP/ZAR 11.280GBP/JPY 132.22GBP/HUF 310.49GBP/NOK 9.1147EUR/USD 1.4188Inflation Data pushes Sterling higher

Yesterday inflation figures were above forecast, and more than double the governments target of 2%. The news increased the chance of an interest rate hike in the UK in the coming months. Against the Euro gains were limited due to the fact the EU are expected to raise rates next month. Against the US Dollar though we hit a 14 month high. Most analysts think Sterling is overvalued though and so we expect it to drop back away in the coming …

Sterling remains low vs Euro; inflation figures today

22nd March 2011
Good morning. The pound remained low against the Euro yesterday, but hit a 2 week high vs the US Dollar. If inflation figures this morning are high as expected, it could support the case for an early rate hike and give Sterling a boost. At 08:30am this morning rates are as follows:
GBP/EUR 1.1471GBP/USD 1.6340GBP/AUD 1.6167GBP/NZD 2.2036GBP/CAD 1.5945GBP/CHF 1.4774GBP/ZAR 11.255GBP/JPY 132.45GBP/HUF 309.89GBP/NOK 9.0672EUR/USD 1.4238Will inflation figures today give Sterling a boost?Sterling remains very low vs the Euro due to global uncertainty. Against the US Dollar however, rising oil prices due to tensions in North Africa and the Middle East have weakened the USD significantly, and we're at a 2 week high. A little more and we'll hit a new 1 year high. Today we have inflation figures released at 09:30am. It's expected that the numbers will show inflation is at more than twice the government target. If confirmed, that would increase the chances of an early …

Weekly GBP/EUR & GBP/USD forecast

In this week’s Report:

• Pound/Euro in 4th week of decline
• Effect of Tsunami/Earthquake on markets
• GBP/USD remaining at good levels
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro; 4th Week of Decline against Euro;

Sterling lost 2.5 cents in the last 10 days of trade with the pound sliding against the euro, heading for the longest run of weekly declines since October 2010.

The Contributing factors to Sterling’s downfall this past week have been weaker consumer confidence figures and the continued rising unemployment rate (highest level since 1994). Natural disaster has once again played its hand in affecting currency markets over the last week, namely the Japanese earth quake, ensuing Tsunami and the resulting potential nuclear fallout of one of Japans oldest nuclear power plants causing an exit from perceived riskier currencies such as Sterling.

In contrast the Euro has seen gains on the back…

Sterling at 4 month low vs Euro, up against USD

18th March 2011
Good morning. Sterling is at a new 4 month low vs the Euro today, as the Euro is supported by a strong bond auction in Spain. The pound is up slightly against the weaker US Dollar. At 08:30am this morning rates are as follows:

GBP/EUR 1.1459GBP/USD 1.6133GBP/AUD 1.6257GBP/NZD 2.2172GBP/CAD 1.5822GBP/CHF 1.4561GBP/ZAR 11.346GBP/JPY 131.66GBP/NOK 9.0516GBP/HUF 312.76EUR/USD 1.4078Pound lower vs the Euro; up vs US DollarSterling is very low against the Euro this morning, down well into the €1.14's after Spain drew solid demand at a bond auction and on the view that euro zone interest rates were likely to rise soon. This strengthened the Euro and is making it more expensive to purchase.

Moving forwards it's likely Sterling will remain weak due to market jitters caused by the uncertainty in the world at present. Problems in Libya will now escalate as a no fly zone is approved by the UN. This is likely to have an impact on oil prices and also investors will continue to …

Pound falls on unemployment & growth figures

17th March 2011
Good morning. Sterling fell against the Euro and US Dollar again yesterday, hit by concerns about a fragile UK economy and high unemployment, while rising risk aversion due to worries about Japan's nuclear crisis helped the dollar. At 08:30am this morning rates are as follows:
GBP/EUR 1.1502GBP/USD 1.6073GBP/AUD 1.6312GBP/NZD 2.2202GBP/CAD 1.5896GBP/CHF 1.4476GBP/ZAR 11.345GBP/JPY 127.05GBP/NOK 9.0769EUR/USD 1.3965High unemployment and growth worries hurt Sterling

Highlighting concerns about the UK, the OECD on Wednesday cut its 2011 growth forecast for the country, saying the economy faced significant risks from falling house prices, weak domestic consumption and uncertain global demand.

Also yesterday figures showed unemployment is at it's highest since 1994. The combined bad economic news for the UK weakened Sterling and pushed exchange rates lower against major currencies such as the Euro and US Dollar. Losses against the Euro limited due to EUR weaknessSterlin…

Why has Sterling fallen against the Euro?

16th March 2011
Good morning. Today we'll look at the following questions:
Why has Sterling fallen against the Euro? Will GBP/EUR rates recover? What is the effect of the Japanese Tsunami on the currency markets? Why is the Yen getting stronger when you would think it should weaken? All these questions will be answered today after the usual snapshot of rates as at 08:30am:
GBP/EUR 1.1531GBP/USD 1.6109GBP/AUD 1.6204GBP/NZD 2.1926GBP/CAD 1.5796GBP/CHF 1.4776GBP/ZAR 11.240GBP/JPY 130.13GBP/HUF 315.47GBP/NOK 9.1068EUR/USD 1.3966Why has Sterling fallen against the Euro?Sterling fell broadly on Tuesday, as fears of a nuclear crisis in Japan sparked a global pullback in riskier currencies and led investors to pare expectations of an early rate hike by the Bank of England. In contrast, markets expect the EU to raise rates sooner than the UK, and these are the main reasons the pound has fallen against the Euro. With the budget coming in the next few weeks and expectations of further cuts, it …

Sterling Euro rates remain low

15th March 2011
Good morning. Sterling remains low vs the Euro despite slight gains yesterday after an affirmation of the UK's sovereign rating supported the pound. At 08:30am this morning rates are as follows:
GBP/EUR 1.1534GBP/USD 1.6074GBP/AUD 1.6133GBP/NZD 2.1880GBP/CAD 1.5747GBP/CHF 1.4827GBP/ZAR 11.034GBP/JPY 130.99GBP/HUF 314.32GBP/NOK 9.0717EUR/USD 1.3934Sterling vs Euro rates downSterling started the week very low vs the Euro, but rose slightly throughout the day after credit rating agency Fitch said it was keeping its AAA sovereign rating of the UK with a stable outlook, adding the rating was underpinned by a high value-added, wealthy and flexible economy. It said that the legacy of the financial crisis weighed on the economic and fiscal outlook but those risks were declining. Despite this rates are still very low due to a stronger Euro. The single currency was boosted by an unexpected deal to strengthen a euro zone bailout fund and a hawkish view on rates. This caused str…

Pound vs Euro & Pound vs US Dollar predictions

In this week’s Report:

• Interest Rates left on hold in UK
• Japan earthquake shocks markets
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Sterling had another poor week last week heading toward a 6 week low against the Euro. The main blow to Sterling was landed at Thursdays Bank of England meeting where the Monetary Policy Committee again voted for a hold on interest rates.

This hold coupled with the news that chief rate hawk Andrew Sentence is to step down from the MPC in May triggered most analysts to reduce their expectation of a UK rate rise in 2011. The knock on effect to the currency market saw many UK banks & traders cut their pro GBP long positions on Sterling, deciding instead to sell the pound short with little confidence in the future performance of the pound.

These moves came in the backdrop of Jean Claude Trichet’s statement last week that the ECB could raise rated as soon as…

Pound down vs Euro, Japan quake shocks markets

11th March 2011
Good morning. The pound is down vs the Euro this morning after rates were left on hold in the UK. The earthquake in Japan has also shocked the market and the Yen has weakened significantly. At 08:30am this morning rates are as follows:

GBP/EUR 1.1599GBP/USD 1.6042GBP/AUD 1.6021GBP/NZD 2.1819GBP/CAD 1.5623GBP/CHF 1.4979GBP/ZAR 11.061GBP/JPY 132.70GBP/HUF 316.91GBP/NOK 9.0650EUR/USD 1.3829Sterling down as interest rates left on holdThe Bank of England left interest rates on hold at the record low of 0.5%. It's now 2 years since rates have moved. Despite inflation running at double the target rate, the BoE have decided not to push rates up as yet to combat this. This illustrates the fragile position of the UK in that rates have to stay low to help the recovery, while inflation figures need rates to go up. This fragility is reflected in the fact the pound fell after the decision, and rates vs the Euro and US Dollar are now lower. We'll have to wait 2 weeks to see how…

Spain downgrade causes GBP/EUR to rise

10th March 2011
Good morning. Sterling rose slightly yesterday on better Trade balance data, and the Euro is also slightly weaker this morning due to Spain's credit rating has been downgraded. At 08:30am this morning rates are as follows:
GBP/EUR 1.1670GBP/USD 1.6126GBP/AUD 1.6063GBP/NZD 2.1938GBP/CAD 1.5630GBP/CHF 1.5025GBP/ZAR 11.097GBP/JPY 133.42GBP/HUF 318.26GBP/NOK 9.0234EUR/USD 1.3817Sterling gains, interest rate decision todayYesterday better than expected Trade balance data helped push the pound slightly higher. Today is quite important for Sterling as we have various data releases and an interest rate decision. Economists expect the MPC to keep interest rates at a record low 0.5 % although the debate within the 9 member MPC could be particularly lively as divisions have been growing on when the BoE should raise rates. Also today, a UK GDP estimate could cause significant volatility for Sterling this morning. We also have UK industrial production, manufacturing production re…

Sterling, Euro, US Dollar rate forecasts

9th March 2011
Good morning. Poor housing data and weak retail sales pushed the pound lower against the US Dollar yesterday, but Sterling recovered slightly against the Euro but not by much. At 08:30am this morning rates are as follows:

GBP/EUR 1.1646GBP/USD 1.6158GBP/AUD 1.6014GBP/NZD 2.1850GBP/CAD 1.5680GBP/CHF 1.5094GBP/ZAR 11.128GBP/HKD 12.585GBP/NOK 9.0300GBP/JPY 133.75EUR/USD 1.3870Sterling falls due to weak dataThere was weak Retail sales and housing data for the UK yesterday, which pushed the pound lower across the board. In addition, there is speculation that due to the weak recovery the Bank of England won't be able to raise interest rates until around July. "There is no momentum to push sterling higher right now," said Neil Mellor, currency strategist at BNY Mellon. "UK yields are lower than that of the euro area." Euro still strong on interest rate expectations, debt worries weighThe single currency has gained on Sterling in the last week due to the f…

Sterling falls to 5 month low vs Euro

8th March 2011
Good morning. Sterling fell against the Euro and US Dollar yesterday, mostly on continued speculation the EU will be raising interest rates soon, giving the single currency strength and making it more expensive to purchase. Today we'll look at Sterling, Euro, and US Dollar in details. First, at 08:30am this morning rates are as follows:

GBP/EUR 1.1615GBP/USD 1.6185GBP/AUD 1.6000GBP/NZD 2.1858GBP/CAD 1.5745GBP/CHF 1.5123GBP/ZAR 11.092GBP/JPY 133.42GBP/NOK 9.0313GBP/HUF 314.15EUR/USD 1.3930Sterling

Sterling has rallied since the start of the year on speculation the Bank of England will raise rates by at some point this year. A weak reading of the UK services sector last week prompted some investors to pare back those expectations which halted Sterlings upward trend.

Trichet's surprise announcement on Thursday has cranked up expectations of an ECB rate rise in April, and analysts said this would also keep the euro stronger than sterling. Some analysts have said upcomin…

Pounds vs Euro / Pound vs US Dollar (Weekly Report)

In this week’s Report:

• EU interest rate talk pushes GBP/EUR down
• Oil prices weaken USD; still near 13 month high
• Interest Rate speculation continuing to drive rates
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Sterling vs. Euro exchange rates have not fared well over the last week. Through most of the week Sterling had actually recovered quite well against the Euro, supported by better than expected housing data and inflation figures early in the week. All that was overshadowed however when the European Central Bank (ECB) president said on Thursday that interest rates were going to rise in the EU as soon as next month. As the chart below shows, this caused rates to fall close to a 3 month low:

European Central Bank President Jean-Claude Trichet said on Thursday that euro zone rates could rise next month -- stunning markets which were expecting a rise late this year. He also pledged &quo…

Pound falls vs Euro on ECB comments

4th March 2011
Good morning. The pound fell against the Euro in a big way yesterday, when the ECB president said in no uncertain terms, EU interest rates will rise soon. This strengthened the single currency and exchange rates have fallen. At 08:30am this morning rates are as follows:

GBP/EUR 1.1641GBP/USD 1.6244GBP/AUD 1.6036GBP/NZD 1.6035GBP/CAD 1.5815GBP/CHF 1.5092GBP/ZAR 11.167GBP/JPY 133.84GBP/NOK 9.0411GBP/DKK 8.6772EUR/USD 1.3952Pound falls vs Euro on ECB commentsECB President Jean-Claude Trichet said euro zone rates could rise next month in a press conference yesterday. This stunned the markets which were expecting a rise much later this year. The ECB also pledged "strong vigilance" on rising inflation, a phrase that in the past has signalled a forthcoming rate rise.The news caused strength in the Euro, making it more expensive to purchase and pushed rates down significantly throughout the day. In contrast, expectations for an early UK rate rise in contrast were scaled…