Tuesday 15th September 2015
On Thursday, the US Federal Reserve will announce their decision on interest rates, and for the first time in many years, there is actually the chance of a change. It’s widely expected that the USA will be the first major western economy to start pushing interest rates up from the record lows they have been at for many years.
It’s likely that they will keep them at their record low of 0.25% for another month, however there is a 20% chance that they will raise the benchmark rate to 0.5%.
What would be the effect on exchange rates if they raise interest rates?
A hike in interest rates would make the US Dollar an attractive option for investors, due to the higher return they would get on their funds. Therefore, if the FED do indeed raise interest rates I would expect the US Dollar to gain strength and become more expensive to buy, and this would push GBP/USD exchange rates lower. The small chance of a hike will already be priced into the market, so if they leave rates on hold, then GBP/USD may rise slightly.
Looking further ahead, they are likely to raise rates at some point in the next few months, so I would not expect the GBP/USD rate to remain above the $1.50 mark for long. Most forecasts I’m reading at the moment suggest that the rate to buy Dollars will fall considerably in the medium term. Therefore if you have a requirement to buy US Dollars, click here to get in touch to discuss the ways I can help protect you against the rate moving against you.
Do you want the best exhcange rates?
If you have a currency transaction to perform there are a number of ways I can be of help. Firstly, I can source rates of exchange that are very close to the published market level, and up to 5% better than banks or other currency brokers can offer. Secondly, with over 15 years’ experience in the FX Markets, I have a very good knowledge of what can affect exchange rates, and can help you to make an informed decision on when to lock in a rate of exchange.
I would welcome the opportunity to speak to anyone that needs to get a quote on their exchange and explain how I can help you. Click here to send me your details and I will get in touch personally to discuss your requirements today.
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Selasa, 15 September 2015
Selasa, 10 Februari 2015
Pound rises to €1.35 – a 7 year high vs the Euro
Tuesday 10th February 2015
Since my post a week ago, as you can see below, the exchange rate has recovered and risen back to its 7 year high of €1.35.
As we will see in a moment, there are several factors that have caused the gains, including robust UK economic data giving the Pound a lift, the Euro remaining weak due to uncertainty over Greece, and stronger data from the United states which has also caused the Euro to weaken. In today’s report we’ll take a look at what has been happening, and whether the rate could go even higher in the coming months.
Sterling/Euro for the last 7 days:
Of late we have seen strong UK economic data that has served to strengthen Sterling. Better than expected UK manufacturing data this morning helped, which follows on from very robust private sector surveys last week. Manufacturing, construction and services sectors all came in ahead of forecasts in recent days. Also, an economic think tank said Britain's economy was on track for its strongest growth in nearly 10 years in 2015, all of which has lent support to the Pound and helped it gain against other currencies.
Attention will now shift to Thursday's Bank of England inflation report, in which we are likely to see updated growth and inflation forecasts, and will also help determine when interest rates will go up in the UK. However, those hoping the Pound will continue to strengthen should be cautions, as the upcoming election in May will likely create much uncertainty in the market and could well weaken the Pound brining exchange rates back down.
David Cameron today held a meeting to discuss the possible impact on the UK of possible Greek exit from the Eurozone.
There was agreement that the probability of Greece adopting a new currency had increased, however I still think that there will be an agreement between Greece and other EU governments to keep Greece in the single currency.
While uncertainty persists however, the Euro is likely to remain weak and that’s keeping GBP/EUR levels at 7 year highs of €1.35. Read more about what's happening in Greece here on the BBC website.
Last week figures showed that the USA created 257,000 jobs last month, which was much higher than forecast. Furthermore, the number of jobs created in November and December was revised sharply higher. This means that last month was the 11th in a row in which more than 200,000 jobs were created, which is the best in over 20 years.
The effect on the currency markets was US Dollar strength which caused GBP/USD to fall. This also meant capital flows out of the Euro into the US Dollar, which weakened the Euro and helped the GBP/EUR rate to rise.
Get in touch with me today to discuss the rates I can offer and the contract types you have at your disposal to ensure you don’t lose out. The consultancy service I provide is free, and involves a chat over the phone regarding your requirements. I can then explain the various options and choices you have to ensure you make an informed decision when to fix a rate.
When you decide to fix a rate I can provide you a quotation; the rates I provide are often up to 5% better than banks and other brokers can offer so the savings can be huge.
Since my post a week ago, as you can see below, the exchange rate has recovered and risen back to its 7 year high of €1.35.
As we will see in a moment, there are several factors that have caused the gains, including robust UK economic data giving the Pound a lift, the Euro remaining weak due to uncertainty over Greece, and stronger data from the United states which has also caused the Euro to weaken. In today’s report we’ll take a look at what has been happening, and whether the rate could go even higher in the coming months.
Sterling/Euro for the last 7 days:
UK data impresses and lifts Sterling high
Of late we have seen strong UK economic data that has served to strengthen Sterling. Better than expected UK manufacturing data this morning helped, which follows on from very robust private sector surveys last week. Manufacturing, construction and services sectors all came in ahead of forecasts in recent days. Also, an economic think tank said Britain's economy was on track for its strongest growth in nearly 10 years in 2015, all of which has lent support to the Pound and helped it gain against other currencies. Attention will now shift to Thursday's Bank of England inflation report, in which we are likely to see updated growth and inflation forecasts, and will also help determine when interest rates will go up in the UK. However, those hoping the Pound will continue to strengthen should be cautions, as the upcoming election in May will likely create much uncertainty in the market and could well weaken the Pound brining exchange rates back down.
Euro remains weak over Greek Euro exit fears
David Cameron today held a meeting to discuss the possible impact on the UK of possible Greek exit from the Eurozone. There was agreement that the probability of Greece adopting a new currency had increased, however I still think that there will be an agreement between Greece and other EU governments to keep Greece in the single currency.
While uncertainty persists however, the Euro is likely to remain weak and that’s keeping GBP/EUR levels at 7 year highs of €1.35. Read more about what's happening in Greece here on the BBC website.
US Jobs data continues to impress, giving the USD strength and weakening Euro further
Last week figures showed that the USA created 257,000 jobs last month, which was much higher than forecast. Furthermore, the number of jobs created in November and December was revised sharply higher. This means that last month was the 11th in a row in which more than 200,000 jobs were created, which is the best in over 20 years.
The effect on the currency markets was US Dollar strength which caused GBP/USD to fall. This also meant capital flows out of the Euro into the US Dollar, which weakened the Euro and helped the GBP/EUR rate to rise.
Do you want the best possible exchange rates?
Get in touch with me today to discuss the rates I can offer and the contract types you have at your disposal to ensure you don’t lose out. The consultancy service I provide is free, and involves a chat over the phone regarding your requirements. I can then explain the various options and choices you have to ensure you make an informed decision when to fix a rate.
When you decide to fix a rate I can provide you a quotation; the rates I provide are often up to 5% better than banks and other brokers can offer so the savings can be huge.
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