Tomorrow at 9:30am the latest official revised figures for UK GDP will be announced. As most of you will be aware the UK exited recession in the 4th quarter of 2009 with a weak 0.1% growth and analysts are optimistic of an upward revision of this figure to 0.2% growth. One of the major threats to the value of Sterling at present is the possibility of a ‘W shaped’ or ‘double-dipped’ recession where the economy is at risk of falling back into recession before sustaining a full recovery. Germany are already at risk of this as their revised GDP figures released yesterday morning saw a drop from positive growth of 0.7% down to zero growth and I personally fear that the UK may find itself with a similar struggle.
In my opinion the importance of tomorrow’s release means that the markets are ready to react one way or another and I believe that should we see expectations of 0.2% growth or better then we could see a Sterling spike offering some better buying exchange rates across the board. However I believe that a result of 0.1% or worse could be catastrophic for Sterling…
Thursday, 25 February 2010
Tuesday, 23 February 2010
Exchange rates this week
Yesterday was a relatively quiet day for the market but we do have plenty of data coming up this week that could affect your currency transfer whether buying currency with sterling or bringing funds back into the UK. For anybody with a GBP/EUR or GBP/ USD requirement this is particularly the case. In my opinion the biggest data set for GBP/EUR this week will be German GDP figures due for release on Thursday, this thought is echoed by other industry specialists:
“The German GDP figure out tomorrow at 09:30 could be the key factor as to how Sterling Euro fares this week, with it being the largest economy in the Euro zone and following the problems in Greece a lower than expected figure could provide excellent buying opportunities.” Tom Higham, Director at Foreign Currency Direct
With Germany being the largest economy within the Euro zone its GDP figures will be closely scrutinised and I would expect GBP/EUR volatility following this release.
For those interested in GBP/USD US Non-farm payroll unemployment data released on Friday is viewed as a very important release for anyone following cable. USD exchange rates have been performing well recently against a number of major currencies including Sterling and the Euro and should these unemployment figures be better than expected we may see this trend continue, possibly worth holding on should you have dollars to sell.
“The German GDP figure out tomorrow at 09:30 could be the key factor as to how Sterling Euro fares this week, with it being the largest economy in the Euro zone and following the problems in Greece a lower than expected figure could provide excellent buying opportunities.” Tom Higham, Director at Foreign Currency Direct
With Germany being the largest economy within the Euro zone its GDP figures will be closely scrutinised and I would expect GBP/EUR volatility following this release.
For those interested in GBP/USD US Non-farm payroll unemployment data released on Friday is viewed as a very important release for anyone following cable. USD exchange rates have been performing well recently against a number of major currencies including Sterling and the Euro and should these unemployment figures be better than expected we may see this trend continue, possibly worth holding on should you have dollars to sell.
Monday, 22 February 2010
Is Brown a bully?
The Labour party have taken a very offensive stance after an anti-bullying charity announced at the weekend that staff from Gordon Brown's offices had contacted them.
Downing Street says the reports are "malicious allegations" and "without foundation" while the PM's secretary has immediately asked for evidence from the charity that the questions have really come from staff at No.10.
Gordon Brown has previously been warned about his behaviour towards staff by civil service head Sir Gus O'Donnell.
The problem the Government now face have is whether or not the allegations prove to be true, Gordon Brown has been labelled a bully in most newspapers in the run up to a General Election!!
Political instability is very much one of the key factors that affect the value of Sterling against other currencies and I'm sure that this will not be the last incident of mud throwing or scandal during the upcoming weeks so the Pound could be in for a really rocky ride!!
If you want to have a chat about market conditions and forecasts give me a call on 01494 787457 or email me at sah@currencies.co.uk
Downing Street says the reports are "malicious allegations" and "without foundation" while the PM's secretary has immediately asked for evidence from the charity that the questions have really come from staff at No.10.
Gordon Brown has previously been warned about his behaviour towards staff by civil service head Sir Gus O'Donnell.
The problem the Government now face have is whether or not the allegations prove to be true, Gordon Brown has been labelled a bully in most newspapers in the run up to a General Election!!
Political instability is very much one of the key factors that affect the value of Sterling against other currencies and I'm sure that this will not be the last incident of mud throwing or scandal during the upcoming weeks so the Pound could be in for a really rocky ride!!
If you want to have a chat about market conditions and forecasts give me a call on 01494 787457 or email me at sah@currencies.co.uk
Thursday, 18 February 2010
Currency News
With the Greece situation smouldering in the background whilst it gets on top of its troublesome deficit there are lot of economic releases to make for an interesting day. We have already seen the Bank of Japan hold interest rates steady this morning. Later sees UK public sector net borrowing for January released at 09:30. With the already very large UK deficit this is one release that should be keenly watched and is likely to shape the sterling markets today.
Forecast is actually for an improvement in the figures with a reduction of £2.5 billion. However seeing the deficit expanded the previous month by £15.7 billion then this forecast from my view is a little on the optimistic side and we could see a reversal of the good gains the pound saw yesterday.
At the same time M4 money supply data is also released measuring all the money in circulation in the UK. The Bank of England will be hoping to see some growth in the figures and most are expecting a small increase of about 0.5%. However, with a growing belief that QE isn’t having the desired effect and the fact that the money supply actually shrunk by more than 1% last month then we could be in for a nasty surprise.
With two very important releases this morning, for anyone with any currency requirements it would be beneficial to be in close contact with your account manager should the market move substantially.
It is worth being aware that there are European consumer confidence figures released at 10:00. With a more fragile looking Euro with the problems surrounding Greece at the moment it has the potential to put a dampener on the euro.
Across the pond focus will be on Canada with a number of releases including Consumer Price Index (CPI) for January at 12.00. For the US it is Producer Price data and the Philadeplhia Fed Survey later this afternoon.
Forecast is actually for an improvement in the figures with a reduction of £2.5 billion. However seeing the deficit expanded the previous month by £15.7 billion then this forecast from my view is a little on the optimistic side and we could see a reversal of the good gains the pound saw yesterday.
At the same time M4 money supply data is also released measuring all the money in circulation in the UK. The Bank of England will be hoping to see some growth in the figures and most are expecting a small increase of about 0.5%. However, with a growing belief that QE isn’t having the desired effect and the fact that the money supply actually shrunk by more than 1% last month then we could be in for a nasty surprise.
With two very important releases this morning, for anyone with any currency requirements it would be beneficial to be in close contact with your account manager should the market move substantially.
It is worth being aware that there are European consumer confidence figures released at 10:00. With a more fragile looking Euro with the problems surrounding Greece at the moment it has the potential to put a dampener on the euro.
Across the pond focus will be on Canada with a number of releases including Consumer Price Index (CPI) for January at 12.00. For the US it is Producer Price data and the Philadeplhia Fed Survey later this afternoon.
Wednesday, 17 February 2010
US data out today
Like its UK equivalent, the US Federal open Market Committee minutes are sure to cause ripples for the world’s largest economy. They may give an insight as to if or when the US is able to start raising interest rates which is likely to impact on the price of the Dollar. Since many commodities are priced in the greenback this has huge significance for various market sectors and may affect a currency pair you had not considered. With gold being priced in Dollars, and South Africa being the world’s largest single producer of gold, as the Dollar rate changes, so does the amount of gold investors can afford, and therefore the ZAR strengthens or weakens as a result. As you can see the impact of the US information out this afternoon doesn’t only affect clients looking at buying or selling Dollars directly but also those clients looking at a range of other currencies
Tuesday, 16 February 2010
Banks for sale!!!
Taxpayers may have to wait until 2015 before they start getting back the £40bn used to prop up failing banks. UK Financial Investments (UKFI) believes it may take that long before it can sell most publicly owned shares in RBS, Lloyds and Northern Rock. The government body had been hoping to offload them sooner, but there are fears this could result in huge losses.
The question I find myself asking is what will fill the £40bn hole in the meantime? And I keep coming up with the same 2 answers, increases in taxes and cuts in public spending – neither of which I think will have a positive effect on Sterling exchange rates.
We at FCD are always looking for our client’s thoughts and opinions on what they think will happen to the market and where they see exchange rates going? So why not let me know your predictions. Where do you see EUR and USD exchange rates 3 months from now? Email me at sah@currencies.co.uk and I will publish the findings in my next blog.
The question I find myself asking is what will fill the £40bn hole in the meantime? And I keep coming up with the same 2 answers, increases in taxes and cuts in public spending – neither of which I think will have a positive effect on Sterling exchange rates.
We at FCD are always looking for our client’s thoughts and opinions on what they think will happen to the market and where they see exchange rates going? So why not let me know your predictions. Where do you see EUR and USD exchange rates 3 months from now? Email me at sah@currencies.co.uk and I will publish the findings in my next blog.
What will be the effect of a hung parliament
The Liberal Democrats yesterday denied that it had ruled out joining a coalition government if no single party won a parliamentary majority at this year's election.
The possibility of Britain's first "hung parliament" since 1974 has unsettled financial markets but Liberal Democrat deputy leader Vince Cable said it could be in the national interest "because it will force parties to work together in a way that single-party government won't."
He told BBC radio: "We will be very constructive in our approach to it, but we are not engaging in fancy games of working out who does what."
The Conservatives are favourites to win the election, expected in May, and so end 13 years of Labour rule.
But a series of polls has shown the Conservatives falling short of the support needed for a majority. The Liberal Democrats, who have 63 seats in the current 646-member parliament, could become kingmakers in that scenario.
Investors fear a minority or coalition government would not act decisively to bring down Britain's gaping public sector deficit, forecast to reach 178 billion pounds this year or more than 12 percent of Gross Domestic Product.
In my opinion the overriding factor that is going to cripple any short term economic recovery in the UK is the national debt, it is already at levels which are spiralling out of control and without a single party steering us (or at least attempting to) then we really could be left out to see without a paddle.
If you, like me, have grave concerns about Sterling’s strength against all world currencies coming into a new political cycle then speak to us soon. We have contracts that allow you to secure today’s exchange rates for up to two years ahead allowing you the comfort of knowing to the penny how much your overseas transfers are going to cost you.
The possibility of Britain's first "hung parliament" since 1974 has unsettled financial markets but Liberal Democrat deputy leader Vince Cable said it could be in the national interest "because it will force parties to work together in a way that single-party government won't."
He told BBC radio: "We will be very constructive in our approach to it, but we are not engaging in fancy games of working out who does what."
The Conservatives are favourites to win the election, expected in May, and so end 13 years of Labour rule.
But a series of polls has shown the Conservatives falling short of the support needed for a majority. The Liberal Democrats, who have 63 seats in the current 646-member parliament, could become kingmakers in that scenario.
Investors fear a minority or coalition government would not act decisively to bring down Britain's gaping public sector deficit, forecast to reach 178 billion pounds this year or more than 12 percent of Gross Domestic Product.
In my opinion the overriding factor that is going to cripple any short term economic recovery in the UK is the national debt, it is already at levels which are spiralling out of control and without a single party steering us (or at least attempting to) then we really could be left out to see without a paddle.
If you, like me, have grave concerns about Sterling’s strength against all world currencies coming into a new political cycle then speak to us soon. We have contracts that allow you to secure today’s exchange rates for up to two years ahead allowing you the comfort of knowing to the penny how much your overseas transfers are going to cost you.
UK unemployement figure going up?
The UK economy is facing more redundancies, with substantial cuts expected in the public sector, a report said yesterday. Almost one in three public sector employers plan to shed jobs this quarter, the Chartered Institute of Personnel and Development stated.
Its latest quarterly survey found that the jobs outlook had worsened despite the UK emerging from recession, another strong indicator that the UK may be entering the second phase of a double dip or W-shaped recovery – bad news for the Pound!
The latest unemployment number (which currently stands at 2.46 million) is released tomorrow. A significant increase is likely to have a pretty negative effect on the value of the Pound as fears continue to mount over the long term financial health of Britain.
If you want to be among the first to know the number, literally only a few minutes after its release, email me today at sah@currencies.co.uk and I’ll personally make sure you are emailed the data and how it has affected exchange rates tomorrow morning.
If, however, you are getting tired on the insecurity of the UK economy and need to buy currency in 2010 call us free today on 0800 328 5884 and find out about the contract types we have available that can be tailored to your specific needs.
Its latest quarterly survey found that the jobs outlook had worsened despite the UK emerging from recession, another strong indicator that the UK may be entering the second phase of a double dip or W-shaped recovery – bad news for the Pound!
The latest unemployment number (which currently stands at 2.46 million) is released tomorrow. A significant increase is likely to have a pretty negative effect on the value of the Pound as fears continue to mount over the long term financial health of Britain.
If you want to be among the first to know the number, literally only a few minutes after its release, email me today at sah@currencies.co.uk and I’ll personally make sure you are emailed the data and how it has affected exchange rates tomorrow morning.
If, however, you are getting tired on the insecurity of the UK economy and need to buy currency in 2010 call us free today on 0800 328 5884 and find out about the contract types we have available that can be tailored to your specific needs.
Monday, 15 February 2010
Greek tragedy
It was announced last week that there will be some form of bailout plan for Greece and rather than the responsibility falling onto a few nations, the responsibility will be passed onto the European Union.
This of course includes the United Kingdom and therefore even with our own debt mounting we may be forced to spend further in order to help Greece, with rumours that Spain are in a very similar position as well as possibly Ireland and Portugal, the prospect of the U.K. following suit cannot be ignored.
If this were to happen it would be disastrous for the pound and for those looking to buy Euros either now or in the future should consider forward contrcats in order to protect themsleves from the rocky road ahead.
This of course includes the United Kingdom and therefore even with our own debt mounting we may be forced to spend further in order to help Greece, with rumours that Spain are in a very similar position as well as possibly Ireland and Portugal, the prospect of the U.K. following suit cannot be ignored.
If this were to happen it would be disastrous for the pound and for those looking to buy Euros either now or in the future should consider forward contrcats in order to protect themsleves from the rocky road ahead.
Friday, 12 February 2010
USD rates suffering
Most of the east coast of the USA has been hit by snow and many people are asking whether it is affecting their economy.
It meant that their Retail Sales figure release has been delayed till later today but some are also thinking it has helped to show their jobless figures in a better light. The jobless figures were released yesterday afternoon and came in better than expected as the snow may have caused an administrative backlog. Due to this the pound strengthened against the dollar through yesterday’s afternoon trading.
With this in mind if you are interested in enquiring about our currency rates to send money abroad get in contact today on 0800 328 5884 and talk to your independent currency broker.
It meant that their Retail Sales figure release has been delayed till later today but some are also thinking it has helped to show their jobless figures in a better light. The jobless figures were released yesterday afternoon and came in better than expected as the snow may have caused an administrative backlog. Due to this the pound strengthened against the dollar through yesterday’s afternoon trading.
With this in mind if you are interested in enquiring about our currency rates to send money abroad get in contact today on 0800 328 5884 and talk to your independent currency broker.
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