Sterling’s value climbed once more yesterday following better than expected UK GDP figures. Rates climbed higher still as we saw PROFIT TAKING in the market. This is when global investors ‘reset’ their investments levels for the following month. In this case, as a result of the QE program announced by the European Central Bank, stock generally went up. This resulted in their profits coming back to the UK, pushing up the demand and value of the Pound.
Eyes are now on UK and EU Manufacturing PMI which are both released later this morning. I expect a negative trend to start for GBPEUR levels which will probably continue until the Easter weekend. Good news for EURO sellers that have seen their euro’s become less valuable for 4 days straight now.
Please be reminded that the Easter Bank holiday could delay payments; as a result please get in contact today to allow enough time to get funds to their respective destination.
The Election of a generation is now in full swing with the next live debates taking place tomorrow evening. The general election is now just 36 days away and is widely expected to have a negative impact on the strength of the Pound. This is due to the political and economic uncertainty it creates which impacts everything from business orders to investment in the UK. Plus with the prospect of a EU membership debate follow the election further pressure is expected on Sterling’s value even after the election, it suggests that the Pound could be in for a tough 3 months.
The Scottish referendum last September caused a nearly 3 cent drop in GBPEUR and the last election caused over a 7 cent movement. As a result I would strongly suggest anyone with current exposure in the next 3 months to review their situation with ourselves, get in contact by clicking here.
The USD has become more and more expensive to buy this quarter, getting to the worst point seen in nearly 5 years on Monday. Buying the ‘Greenback’ is now nearly 9% more expensive compared to 6 months ago.
The FED is expected to start raising interest rates within the next 6 months which is increasing the demand for the currency making the USD more expensive to buy. Plus with the political uncertainty in the UK expected to weaken the Pound I can see this trend continuing. Saying that however rates never move in a straight line so timing a transfer is key in getting the best price.
Yesterday afternoon we saw such an event when US Consumer Confidence showed a steep fall. We are still seeing the benefits this morning but I expect these gains to evaporate this afternoon. US Manufacturing PMI and US Mortgage Approvals are both expected to gains for the USD resulting in GBPUSD to return to this negative trend.
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GBP/AUD rates have fallen by over 3% in the last 30 days making a AUD $200,000 purchase nearly £5,000 more expensive. News over the last week has however changed the forecast significantly for the AUD. Glenn Stevens, the head of the Reserve Bank of Australia is now expected to cut interest rates at their next meeting over this coming weekend. As a result there is an opportunity currently for buyers as the expectation is priced into the market and rates have climbed 6 cents in 3 days.
I generally expect rates to peak on Thursday afternoon within UK trading hours and this is when I would be buying the AUD. Alternatively if you would like to trade over the event get in contact to exploit the tools at your disposal including LIMIT ORDERS & STOP LOSS
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