Showing posts from June, 2016

Pound plunges as BoE hints at rate cut

So much for the Bank of England supporting the Pound! The governor Mark Carney has just spoken and warned that interest rates could be cut next month due to the deteriorating economic outlook.  The rate has been at record lows of 0.5% for 7 years, and a lower rate that than means less return for investors, and so the currency weakens. You can clearly see how much the Pound weakened the moment he made the comments:

I must say that it's not very helpful him pouring oil onto the fire. I would not be surprised to see some criticism of what he's just done to the value of Sterling, when he should be looking to calm the markets, not increase an already volatile market. 

It was this low in the last week but recovered, but time will tell if the Pound will regain the hit it's taken today. It was sitting pretty steady at €1.21 against the Euro before Mark Carney's comments pushed it lower. They could cut rates either in the middle of July or in August.

Personally I think that th…

Pound continues to rise for second day

Sterling has continued to strengthen, rising to €1.2150 vs the Euro and $1.35 vs the US Dollar. Here are this week's chart's showing the Pound's recovery so far:



Why has the Pound gone up?
The gains have probably been caused by investors realising that the Brexit vote last week is not Armageddon. Share prices have also risen today, and the FTSE has already recovered all the losses we saw last Friday. Markets are a little calmer, and the fact that the UK won't be triggering article 50 of the Lisbon treaty any time soon have also calmed things a little.

Will it keep rising?
There is still no way to know if this is the start of a proper recovery though. There is still a huge amount of uncertainty, but for the moment this is mostly political uncertainty rather than economic. Cameron is leaving the hard decisions to his successor, whoever that might be (maybe Boris, but perhaps the sensible option would be Theresa May). The opposition is in compl…

Sterling makes gains, but will it last?

Today the Pound has managed to claw back some of its losses against the Euro and US Dollar, but the question is, will the Pound keep going up, or is this a temporary spike?

Today has seen GBP/EUR climb to €1.21, and GBP/USD to $1.34. Normally you would think this is a pretty decent rise, but when you compare it to the sharp falls we saw last week in the wake of the EU referendum, it's not a huge recovery although it is positive. There hasn't really been anything in particular that has caused the rise. I think it's mostly due to the fact that things have now calmed down a little, and perhaps the 'Brexit' won't be the end of the world after all. It's looking increasingly likely that once negotiations start, there will be a real push to make deals that suit both the UK and the EU, in terms of trade, movement of people, and agree to something that's favourable for both sides. Also, as nobody expects 'Article 50' of the Lisbon treaty to be invoked an…

Pound continues to fall in wake of 'Brexit'

The Pound has continued to take a hammering in the currency markets today, falling to below €1.20 against the Euro, and to $1.31 against the US Dollar:

The decline started in trading in the Asian markets yesterday, and continued when London opened at 8am this morning. It's all to do with the uncertainty, both political and economic. George Osborne has said that the UK is ready to face the future from a position of strength, in an effort to calm the markets.  However the fact is that the Prime Minister has left his successor to pick up the pieces, and we won't know who that is until October. The opposition is in complete turmoil, with many shadow ministers being fired or resigning. Their replacements that were announced earlier have now also resigned, which leaves the UK in a bit of a political void.

Markets hate uncertainty, and that's what we're likely to have quite a lot of in the coming months. That's why the Pound has fallen. It seems to have stabilised around …

Leave Wins... Sterling tumbles to lowest levels since 1985, but has since recovered slightly

In a shock result that the city and the bookmakers didn't see coming, the UK has voted to leave the EU. The Pound has fallen twice as far as on Black Wednesday,hitting it's lowest since 1985. The Pound has since recovered some of it's losses however.

Watch live charts and how rates are moving by clicking here

Sterling/Dollar was up at $1.50 last night, and dropped to as low as $1.32. Sterling has managed to recover nicely however, and GBP/USD currently sits at $1.3715, with GBP/EUR at €1.24. So while it's lower, it's not a complete disaster.

However you voted, and whatever your currency requirements, we can help you navigate these turbulent markets to achieve an exchange rate much better than banks or other brokers can offer. Those with Euros to sell may well wish to take advantage of the weakness.

If you would like to find out more about what is happening to the market, and to get a quote for your exchange, click here to send me a free enquiry today.

There will b…

Vote today, but the volatility will come tomorrow...

The day is finally upon us, and today is the EU referendum. Apologies for the lack of posts over the last week, but as I'm sure you appreciate we have been incredibly busy on the trading floor, helping clients secure currency at the best possible exchange rates.

I actually think today could be quite quiet on the currency markets, as investors and those buying currency tread water in the calm before the storm. Most of my clients that want to buy currency have now already done so, with the remainder now waiting to see what happens. The main volatility in exchange rates will come tomorrow morning, once the result is known and exchange rates react accordingly. 

Since last Thursday Sterling has risen by around 3% against other currencies as the polls have swung towards the 'Remain' Camp. Here is how GBP/EUR and GBP/USD have moved over the course of the last week:

What could happen to exchange rates?
I've been asked this question hundreds of times in the last week, and ulti…

EU Referendum: Hope for the best, plan for the worst….

Hope is a belief that an outcome will occur, and this hope, desire and belief foster confidence, however this is not a reliable tool when dealing with the Foreign Exchange market; by far the largest market in the world. Over confidence that the market will move your way could cost you thousands of Pounds in the coming weeks. For clients buying properties overseas, or businesses dealing with foreign currencies, the implications of what’s happening at the moment are huge. With current volatility heightened due to the impending EU referendum, now is the time to take stock of your currency requirements. Yesterday was relatively flat in the market, so in today’s post we’ll look at ways you still hope for the best, but plan sensibly for the worst.

Need to buy Euros? 
Those that need to buy Euros will no doubt be hoping that onFriday morning, the UK will have voted to remain within the EU. If so, it’s likely that Sterling will strengthen. However there is every possibility that we will vote t…

Pound/Euro falls to €1.25 as polls show 'Leave' has the lead

Sterling has started the week poorly, falling again due to ongoing concerns about next week's referendum on EU membership. GBP/EUR has now fallen to €1.25, 7 cents lower than it was last month. The latest polls seem to give the 'leave' camp a lead, and this has weakened the Pound. The vote is now only 10 days away, and continued volatility is likely given the very tight nature of the opinion polls. It's worth noting however that despite the polls being very close, the bookies still have the UK 74% on to remain within the EU. Here's how GBP/EUR has moved this week:

As you can see, the Pound has been suffering due to the concerns and uncertainty a 'Brexit' would cause. 

The coming week will be very important for exchange rates as the vote looms ever closer. We also have central bank meetings this week from the UK, USA and Japan. While no change in monetary policy is expected, there could be hints on future moves, particularly from the US Federal Reserve, so t…

GBP/NZD rates fall from $2.20 to $2.03

Pound/New Zealand Dollar
GBP/NZD rates have fallen significantly this month. Only a week or so ago rates were up at nearly $2.20 Kiwi Dollars to the Pound, however it now sits at $2.03. Part of the reason for the fall is Sterling weakening due to the EU referendum, which I've been discussing in detail in recent weeks. The pair fell further last night however, when their central bank decided to hold interest rates. The RBNZ had been widely expected to cut interest rates. Because they chose not to do so, the NZD has gained significant strength, and as you can see from the chart below, the GBP/NZD fell:

We can trade over 35 currencies, including NZD. If you need the best exchange rates for this or indeed any international currency, click here to get a free quote and see how much we could save you.

Sterling is still on the back foot, and the real possibility of a Brexit means the Pound is struggling, and will likely to continue to do so. Pound/Euro has remained pretty ra…

Another day, another poll...

Sterling has been on the slide for the last week, but today has picked up a little, thanks to the latest EU referendum polls. Over the last week, polls had shown that it was likely we would leave the EU, and the Pound weekend accordingly, falling from €1.32 to €1.27. Today however, 2 new polls have given the lead back to the 'Remain' camp. A YouGov poll published in the Times and an ORB poll in the telegraph both showed a 1 point lead.

You can see how close things are from this Graphic from YouGov:

The effect on the exchange rates? 
The Pound has received a boost, as illustrated in today's GBP/EUR chart below:

The next few weeks will see more polls, and significant volatility in the currency markets. It's still very close, and the vote could go either way. I've said for a while that Sterling exchange rates will be driven by opinion polls, and this is likely to continue for the next few weeks. Y

If the polls are anything to go by, then it's looking like it will…

Pound continues to fall as 'Brexit' chances increase

The Pound has been in decline over the past week, caused by the ongoing uncertainty surrounding the imminent UK referendum. Just over a week ago, GBP/EUR was up at €1.32 and all the polls seemed to suggest remaining in the EU was very likely. Fast forward a week, and it's a very different picture.

Further polls over the weekend by YouGov and TNS both show that the 'Leave' campaign has the lead. This follows polls last week showing the same things. As a result, the Pound has fallen further against other currencies, illustrated below in a graph showing GBP/EUR over the last week dropping from €1.32 to €1.27:

The reason the Pound is falling is due to the uncertainty a 'Brexit' would cause for the UK economy. It doesn't matter what your view or my view is on whether the UK should remain in the EU, what matters is that investors hate uncertainty, and the more likely it is that we'll leave, the lower the Pound is likely to go. This is what we have seen over the …

Low US jobs numbers surprise currency markets

A short time ago the USA released it's 'Non-Farm Payrolls' figures, and this has caused some large swings in both GBP/EUR and GBP/USD.  The report shows the number of new jobs created, excluding the agricultural sector as that's seasonal. It's notoriously difficult to predict, and the actual figure came in today as 38,000 new jobs. The markets had been expecting, and priced in, a number of 164,000. So as you can see the actual figure was significantly lower than expected. Very very low, probably the lowest I've seen since the credit crunch.

This has global implications, and the effect on the currency markets is clear to see. If you look at the first chart below you can see that GBP/USD shot up by 1 cent, due to the US Dollar weakening and becoming cheaper to buy. The charts also show the inverse relationship between the Euro and the Dollar. The second chart shows GBP/EUR and this moved the opposite way and gone down. This is because investors that have sold the…

Sterling falls further on global risk aversion

Sterling has continued to fall sharply today, and GBP/EUR rates have now fallen by 3 cents in a little over 24 hours:

Why is the Pound falling?
It's partly due to the latest polls I mentioned in yesterday's post, showing the the UK may well vote to leave the EU. The continued fall today is due to reduced demand for riskier assets, such as Sterling.

Today we have seen stock markets falling, along with the price of oil. There has also been manufacturing data from China showing that their economy is still struggling. There is a global deflationary trend emerging, and this has spooked investors to seek safer havens, and dumped riskier assets. There is also the fact that the US will soon raise interest rates, pushing up demand for the US Dollar and pushing Sterling lower.

I've been saying for a while that we're likely to see increased volatility in the run up to the EU referendum, and this is what we're starting to see. A 3 cent drop in the GBP/EUR rate is a large move …