Pound falls slightly on poor Industrial and Manufacturing Production figures

Wednesday 9th September 
After gradually rising this week, the Pound has fallen slightly against the Euro and US Dollar today due to worse than expected UK data. Figures released earlier today showed that UK Industrial and Manufacturing production fell at its sharpest pace in more than a year. I warned on Monday that if the figures were worse than forecast Sterling could fall, and while the expected numbers were predicted to show slight growth, the actual numbers showed a decline of -0.4% & -0.8% respectively. As you can see from today’s GBP/EUR chart below, Sterling fell by around 1 cent against the Euro, however has since started to claw back its losses. (Click here to see my live currency chart)

Tomorrow key for whether Pound will rise or fall in the coming months 

At 12pm tomorrow, we will have a much clearer idea of whether Sterling is likely to rise or fall in the coming months, based on interest rate expectations. The Bank of England will announce its decision on interest rates, and they will almost certainly keep them on hold at 0.5%. Straight after the decision however, they will give a statement and release the minutes to the meeting. This will be key as it will show the views of the Monetary Policy Committee and what was discussed, and how many of the members if any voted for rates to rise. 

If these minutes give any hint that interest rates will rise early next year, then the Pound is likely to gain against other currencies. If they show that actually recent economic developments mean that rates will stay on hold for most of 2016, then expect the Pound to fall. 

How do I think the BoE decision could affect exchange rates? 

It’s impossible to predict currency movements of course, but I think that it’s quite likely the Pound could fall. I reach this conclusion because the current global economic downturn risks affecting the UK’s growth prospects, and raising interest rates too soon could hamper the steady recovery that Britain has been making relative to other major western economies. For this reason I think rates will stay on hold for around 12 months. This also means that investors are less likely to want to keep Sterling assets, and as a result Sterling exchange rates could fall. 

Of course, the BoE governor Mark Carney is highly unpredictable and it is impossible to second guess what effect his comments may have on the Pound. I’m quite sure however that tomorrow will see a change in the value of the Pound one way or the other. 

Are you worried about exchange rates moving against you? 

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Pound recovers after Bank of England Minutes

Wednesday 19th November 2014 

Sterling/Euro recovers to €1.25 

Just a quick update this morning, as we have finally seen the Pound recover slightly after the last week in which we saw rates drop from €1.28 to €1.24. 

Earlier this morning the Bank of England released the minutes to its recent meeting where they decided to leave rates on hold. Of the 9 member committee, 7 voted to hold rates, with 2 voting to raise them, which has been the case for the last few months. You can read the full minutes here on the BoE website.

Why did this cause the Pound to rise? 

Given inflation numbers have been lower recently, some analysts including me thought that the 2 members that had been voting for a hike would not do so. The market had also been expecting this and it starting getting priced into rates in advance, and before the release of the minutes GBP/EUR rates were as low as €1.2440. As you can see from the chart above, as soon as the result was out Sterling exchange rates jumped to €1.25 where it now stands. 

This is a key technical level so I expect rates to remain at around €1.25 in the short term. 

Sterling/Dollar 

Focus will now be on Pound/Dollar rates. Currently this sits at around $1.57, but there is some key data out in the next few days that could change this. This evening at 7pm we have the US Federal Reserve minutes, and if there are hints at an interest hike in the states we could see the exchange rate drop further. Tomorrow we have a host of inflation data and jobless claims from the states and quite simply, good economic news could strengthen the US Dollar and cause the exchange rate to drop. 

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Pound falls further in what is an important week for Sterling

Monday 17th March 2014 
Good afternoon everybody. The UK has been basking in unseasonable sunshine over the weekend, however Sterling has remained firmly in the shade. We have seen the Pound drop further today against the Euro and other currencies, ahead of what I think will be a key week for UK economic data releases, and therefore Sterling exchange rates.

Pound/Euro has fallen to 1.1940. Pound/Dollar remains in the mid $1.66’s. In today’s report I am going to run over the week’s economic data and how it might affect exchange rates. 

There are lots of very important releases this week that will affect the Pound, including a Bank of England report, the latest Unemployment data, and George Osborne's budget just to name a few.

• Will the Pound fall further?
• Could it bounce back? 
• How to know when to fix a rate? 
• Do you want to get the best exchange rates? 

The below data will determine the answers to these questions, so read on to find out more about how this week could affect you getting the best foreign exchange currency rates. 

If you need to to buy or sell currency and want to get the best exchange rates, then you can get in touch with me for a free quote by clicking below.

Contact me to discuss your currency requirement in detail. 

This weeks economic data releases that could affect exchange rates 

Monday 17th March 2014 

Today has been relatively quiet data wise, with only some EU inflation data released earlier this morning. The numbers were not that different to the forecast, and so didn’t affect GBP/EUR rates too much. 

Tuesday 18th March 2014 

GBP/EUR could be affected by the EU ZEW survey at 10am. Basically this measures economic sentiment and how investors see the economy. A high reading could strengthen the Euro and pull GBP/EUR rates lower. 

GBP/USD could also be choppy today, as we have a raft of inflation data from the USA at lunchtime. 

At 17:45pm there is a speech by the Bank of England governor Mark Carney. This could be very important. It’s impossible to know whether he will be upbeat and positive about the economy, but if he is it could cause the Pound to rise. Many think they he wants the Pound lower however, in order to help UK exports. So he may use this opportunity to talk the Pound down which would cause exchange rates to fall also. 

Wednesday 19th March 2014 

The most important day of the week for the Pound in my opinion. Firstly we have all the latest unemployment figures. I expect the figure to be at 7.2%. Lower than this would cause the Pound to rise, and vice versa. 

Along with unemployment we also have the latest BoE minutes which will show what was discussed and how they voted in their recent decision to hold interest rates. The key will be whether this report hints at a rate cut early next year or not, and this report is likely to affect Sterling one way or the other. 

At 12:30pm chancellor George Osborne delivers the budget report, so just how could the budget affect exchange rates? The last few haven’t really affected the value of the Pound at all, but it all depends what he says. As we’re getting closer to an election, I expect some positive noises, but nothing that will really surprise the markets, so it’s the unemployment and BoE data today that you want to keep your eye on. 

Late in the afternoon the USA has an interest rate decision and a press conference, so GBP/USD may also be affected today. 

Thursday 20th March 2014 

After yesterday’s incredibly busy day, things settle down a little. There is nothing of note from the UK or EU, but the USA does have some manufacturing data and a bank stress test in the afternoon. 

Friday 21st March 2014 

The latest UK Public sector borrowing figures are released today and is expected to come in at around £7.8bn. As always, if the number differs from this then the Pound may rise or fall accordingly. 

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Sterling remains near 19 month high

Wednesday 18th April 2012
Good morning. Not an awful lot to report from the Currency Markets, as Sterling exchange rates continue their relative stability and remain fairly range bound. The Pound did however gain against the US Dollar yesterday after data showed UK inflation ticked up as expected in March.

UK Inflation strengthens the Pound

Data released yesterday showed that UK inflation rose to 3.5% last month. This caused the Pound to gain because it makes it more likely that the Bank of England will not inject more stimulus into the economy next month. Previous Quantitative Easing had weakened the Pound.

The next focus for the Pound will be later this morning, when the Bank of England MPC meeting minutes for March are released. This will show how the members voted and what was discussed.

While all nine members of the MPC are expected to have voted to keep rates on hold, the minutes will be scrutinised for any hint on whether policymakers would consider another round of quantitative easing when the current programme ends next month.

More confidence in Europe

There was cautious improvement in sentiment towards the euro zone yesterday, helped by a much more positive German ZEW business survey. Usually good news from Europe would strengthen the Euro, and cause exchange rates to fall.

This didn't' happen however, due to the current global climate meaning good news for Europe is also good news for the Pound, and so the data failed to boost the euro against the pound. Sterling remains around a 19 month high vs the single currency.

Today's Data

Unemployment data is the main UK release today in addition to the BoE minutes. In the EU there are Current Account measures which measure the net flow of funds in and out of the Eurozone, so expect some EUR volatility. Later in the day some inflation measures are released from New Zealand


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