The following currency report will examine the factors that could affect Sterling exchange rates. The table below shows the difference in currency you could have achieved trading at the high over the last 30 trading days, compared to the low, on a £200,000 currency transfer.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 2.4% | €5,980 |
| GBP/USD | 1.5% | $4,840 |
| GBP/NZD | 1.5% | NZD 5,780 |
UK GDP Figures Give Sterling a Huge Boost
The UK economy was given a huge boost yesterday following the release of UK GDP (Gross Domestic Product) figures. The expectation had been for our economy to grow by 0.6% during Q3 of this year but the actual figures surpassed this, showing a very positive 1% growth. This gave the markets a confidence boost and although these figures will have two revisions to navigate, the news can only be viewed as positive for the UK economy and ultimately Sterling.
GBP/EUR rates continued to climb throughout Thursday’s trading, following on from Wednesday’s movement. GBP has gained approx 2 cents in the past two days, or an extra EUR 4000 on a £200,000 GBP/EUR transfer. This spike is another clear indicator of why it is so important to stay in contact with your personal currency broker, so that you do not miss these fantastic opportunities when they do present themselves.
I expect rates to put pressure on 1.25 by next week as the results of this positive data take effect and the continuing problems faced by the eurozone, hinder the EUR chances of recovery in the short-term.
If you would like to take advantage of this spike in the market highs then please visit our website www.currencies.co.uk for more information and speak to one of our brokers on the Freephone number 0800 328 5884 today.
France & Germany Heading Towards Recession
Whilst it seems that the UK economy has turned a corner and moved itself out of recession, the same unfortunately cannot be said for the euro zone. The well documented economic deficiencies in Greece, that seemed to indicate the start of the current debt crisis, then filtered out to smaller eurozone economies such as Portugal and Ireland amongst others. This was followed by economic downturn in larger countries such as Italy and Spain but what held firm were the stalwarts of the euro zone and they were the once untouchable economy of Germany and also France. Whilst these two powerhouses continued to prosper, they could to some extent support the smaller nations.
However, a report today has indicated that now both Germany & France are heading towards recession. German economic activity fell to 48.1, with France’s reading even worse at 44.8. These are extremely worrying statistics and will do nothing to ease fear amongst euro zone leaders. For all those hoping this will present an opportunity for a cheaper European property, they should beware that the UK’s long-term economic health and ultimately the strength of the Pound, is inextricably linked to the prosperity and long-term well being of the euro zone.
US Dollar Continues to Struggle Ahead of US Elections
The USD’s recent revival against GBP did not last long as the Pound broke back through 1.61 yesterday. The greenback has struggled to make any serious inroads against GBP of late, as the US await the outcome of the upcoming presidential elections and hopefully some clarity on how they are going to revive a flat economy. Whilst pressure could certainly be put on 1.62 over the coming days, I do feel a move back towards 1.55 is inevitable in the months ahead.
GBP/NZD Forecast
The Pound also made gains against the NZD this week following the recent positive upturn in economic data. The NZD had been performing better of late but a statement by the reserve bank chairman regarding the country’s economy not requiring Quantitative Easing did not have the desired effect, as the NZD lost ground on most major currencies yesterday. GBP/NZD rates are often volatile, which can make forecasting difficult but a move towards 2 could be likely over the coming weeks as the UK pulls itself clear of recession.
Here at FCD we have various contract types all tailored specifically towards our client’s needs, so for more information please call us today on 0044 1494 725 353 or contact me directly at mtv@currencies.co.uk.
