Following a few weeks of positive news for the pound, the tide has turned and there are many old and fresh questions to be asked of sterling and the UK. How will the pound react to the possibility of the UK leaving the EU? To what extent has the Government’s budget deficit reduction plans choked off the recovery? What exactly will a new Bank of England Governor bring to the table and how will his policies affect sterling? All in all these uncertainties are likely to remain a weight around the neck of the pound and we will see sterling struggle to find significant strength.
Growth for Q1 remains a key positive and should prevent a major fall, but it is now old data. I expect the pound to remain vulnerable to poor data and would not rule out more QE by the Bank of England as early as next week. This week look out for Mortgage Approvals (Fri) and Nationwide Houseprice data (tomorrow) as potential market movers for GBP.
On balance if you have a GBP transfer to undertake I would be prepared for further falls in the coming weeks. Why not make a free quote request here or call the trading floor direct on 0800 328 5884 to speak to one of our knowledgeable team and learn exactly how we can save you money.
It is tempting to think of issues in the Eurozone and picture the Euro weakening by a few (or many) cents. Unfortunately for Euro buyers the single currency remains rather strong against both the pound and dollar.
Underlying Euro strength and confidence stems from Mario Draghi, President of the ECB (European Central Bank) who has stated a firm commitment to guarantee the debts of Eurozone members. This means despite the protests in Greece, despite the rising Unemployment in Spain (which are of course all bad for the Euro), it is highly unlikely any country will be forced to leave the Euro and their problems are in theory workable.
If you are considering making a transfer involving the Euro hoping for rates to improve to say 1.20 on GBPEUR, beware of holding out too long and missing the boat, particularly with sterling on the back foot. Last week’s good German data helped the Euro to break fresh lows against sterling, will it continue?
DataWatch – German Unemployment 08.55 UK time today. I expect this will be Euro strength but if the release does not go your way, then there is always German Retail Sales Friday morning.
Exchange rates move every few seconds for a wide variety of reasons so speak to one of our specialist team who can highlight everything to beware of and if you are interested, keep an eye on rates so you don’t miss out. To keep an eye on rates movements yourself, you can view live interbank rates here. Don’t be afraid to call us for a quote or further information.
The USD and Stock Markets worldwide have lately been trading on the prospects of more QE. Pretty much every US data release is now closely watched for signs of whether the recovery in the US has stalled and consequently whether more QE will be due.
In my humble opinion I think it is pretty much guaranteed more QE will be due again in the US but it could be many months ahead. Last week Chinese Manufacturing data showed a contraction and the Eurozone, we know is in a recession. The Eurozone is the main importer of US goods and so long as collectively the Eurozone remains weak, I am sure the US economy will need help. Having said that US data lately is pointing to a booming housing market and high consumer confidence too, tells a different story.
Datawatch – US GDP (Gross Domestic Product) 13.30 UK time tomorrow: This will be the latest important release to affect the dollar for the reasons above. If you are considering a transfer involving the USD keep an eye on this or contact us on 0800 328 5884 to be kept informed.
Overnight GBPUSD has come very close to breaking 1.50 on GBPUSD, will it remain there long? If you are looking to trade around 1.50 on GBPUSD or equivalent in say GBPAED, HKD then current levels should not be taken for granted. To ensure you don’t miss out please register an interest with us today.
This week is rather important for the CAD as we have the Canadian Interest Rate decision today at 15.00 UK time and GDP (Gross Domestic Product) figures which are due this Friday 31st May. Despite the pound falling recently, GBPCAD has been weakening due to the fears of a global slowdown. I think if you are selling CAD for GBP it would be best done sooner as rates are currently very good.
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