Flash Crash and Political Turmoil continuing to hit the Pound

Although there has been little in the way of hard data to effect the currency exchange rates in the last week, there has been plenty of speculation and political turmoil to cause big swings on the currency markets and a huge decline in the pound.

The flash crash caused by a mistake in Asian trading last Friday has kept the markets very on edge. This is still being investigated by the Bank of England and is responsible for much of the harm caused to the Pound Sterling, which in my opinion still remains undervalued at this point in time.

However this is not the only reason for the continued poor performance of the Pound.

The Brexit process is beginning to look increasingly messy with MP’s taking the government to court seeking Parliamentary approval before the UK officially begins to leave the European Union. This political in fighting with Theresa May’s government has caused major companies such as Fujitsu to talk of cutting jobs within the UK, other companies such as Morgan Stanley have begun to talk about moving business away to the likes of Paris and Luxembourg. I believe a lot of this talk is a lobbying tactic designed at shaping the deal Theresa May tries to get from the EU. Though I expect we will see a few major players exit the UK market in the months to come further adversely affecting the Pound.

Analysts have commented that actions such as this in the face of Brexit could see £66bn a year lost in tax revenues as major companies head for the door.

The pound looks set to continue being driven by speculation in the coming months with Credit Suisse’s forecast of GBPEURO already hitting 1.10, I believe other analyst predictions of parity being hit by the end of the year are now looking more likely (1GBP for 1 EURO).

In summary if your going away for Christmas or a late holiday this year I would advise to act sooner rather than later to secure a more favorable rate of exchange against most major currencies. If you are holding on to currency from a previous holiday you will see a great rate of return selling your left over currency to us. In most cases your likely to walk away with more money than it cost to purchase in the first place!

Should you have any questions about anything mentioned in this blog or your individual currency requirements please don’t hesitate to contact me at accounts@currencydeals4u.co.uk

 

 

Article 50 to be triggered in early 2017, trouble brewing in the euro zone…

Rumors have been surfacing this week that Theresa May will be ready to invoke Article 50 in early 2017 formally beginning the UK’s withdrawal from the European Union. Whilst this has not had any major effect yet on the current exchange rates most analysts predict a sharp fall in the Pounds value, with market rates possibly hitting 1.08 in early 2017.

However since Brexit the rates did not fall as low as predicted and manufacturing data along with exports proved to be higher than expected. There will certainly be some choppy waters ahead I feel that the current rates may look attractive come 2017.

While the UK tries to assess what its future looks like outside the European Union the European Union itself continues to grapple with its own set of of problems. The continued problems with Italian bank debt now at 360 billion euros in bad loans and the new issue of Germany’s biggest bank Deutsche Bank being under investigation for miss selling mortgages packages before the recession in 2008. All of these problems have led to further fears of referendums springing up in member states across the union.

The short term forecast is rather a mixed bag, UK pressure concerning Brexit is still the biggest factor and likely to push the Pound down further before the year is out. However as Europe’s problems manifest this may present some choice small windows of opportunity for those wanting to purchase Euros and many other currencies against the Pound.

For those that have been sitting on currency before the referendum this is still a great time to covert back to sterling and will only last until stability returns to the markets.

As usual if you have any questions concerning your currency requirements or any issues raised in this blog please feel free to contact me at accounts@currencydeals4u.co.uk.

 

Pound to Euro at a five week low. Likely to weaken further by end of year.

The pound has come under further pressure lately as mixed data on the state of the economy and predictions for post Brexit continue to emerge. It appears this is not the bottom however with levels expected to drop down to as low as 1.05 Euro’s to the Pound (inter rate).

This week is quieter in terms of date for the UK so I don’t expect any positive spikes in the current levels. Therefore if you are travelling in the short term the current rates may be the best for sometime to come.

If you have any questions about your upcoming currency requirements please feel free to email me at accounts@currencydeals4u.co.uk.

 

 

UK shows signs of recovery while the Eurozone begins to feel the pressure…

Much to dismay of the Remain backers the UK’s economy rather than contracting is showing signs of growth and recovery. On Monday service sector PMI for the UK came out out far better than expected at 53.6 (Anything over 50 shows growth, under shows contraction), this coupled with the best manufacturing growth in 25 years has led to a resurgence in the Pound’s value heading back towards the 1.20’s (Inter Branch rate).

The UK’s economy is proving more resilient than most people expected even with trade talks with China stalling a generally positive outlook is shaping up.

The Eurozone on the other hand is beginning to feel the pinch with further woes concerning Italian banks and Greece’s debts resurfacing. All this is pointing to signs of contraction and any further stimulus introduced could cause further weakness for the Euro in the short term.

The danger from Brexit is far from over though, as we head into October and start official leaving proceedings we will get a better idea of what Britain outside the European Union will look like, this will likely cause more volatility in the markets. Therefore if you are traveling before the end of October, this month may provide some of the best opportunity’s for buying Euros.

In the short term this week Thursday may provide the best opportunity as Mario Draghi meets for the Eurozone’s Interest rate decision any further cuts or quantitative easing may produce sharp gains for the Pound.

Should you have any questions please contact me at accounts@currencydeals4u.co.uk any time.

Matt Sinclair

What next for the Euro? South African Rand plunges amidst political turmoil.

The markets have been much quieter than late this week with little data coming out this week to swing GBPEURO levels one way or another. The Pound however still remains under pressure with post Brexit reactions being monitored carefully by the markets as such GBP is struggling to breach the 1.16 mark, the Euro has benefited from rising inflation keeping these levels firmly in check.

Though not all is well with the Euro zone as Italy’s Banks continue to be a headache for finance ministers with news of debt issues failing to be resolved quickly. There is little in the way of opportunity for Euro buyers at the moment and any potential spikes should be acted on quickly. One such spike may occur if the ECB decides to implement further Quantitative easing to boost its economy, this could provide Euro weakness in the short term in turn helping the Pound briefly breach the 1.16 level.

In other news the South African Rand has plunged in this mornings opening market bell as political turmoil engulfs the countries finance minister over espionage charges with the minister being asked in for questioning by the countries Hawks police unit. This in turn has provided an opportunity for those with Rand to buy a better rate of exchange.

My outlook for the rest of this week will probably see the GBPEURO hover around the 1.16/1.17 rate (Inter bank rate) with a possible downslide Friday as the spotlight falls back on the negative consequences of Brexit for the Pound.

If you should have any questions please email me on accounts@currencydeals4u.co.uk

Matt Sinclair

Sterling continues to suffer from low investor confidence and poor post Brexit data. A stormy week to come…

The Pound saw another big drop against most major currencies at close of of markets on Friday afternoon as traders moved there money in to more appealing and more importantly stable currencies. This saw the Pound drop to levels close to the lows following the Referendum vote.

Today is a fairly quiet date in terms of data as Europe takes a bank holiday (Assumption day). Though tomorrow is anything but quiet for the pound and may prove stormy for exchange rates as UK Inflation data is released at 10am GMT along with Price index data at 9.30am GMT.

Following the interest rate decision and poor manufacturing data I believe this data will have a negative effect on the Pound and will adversely affect currency pairings such as GBPEURO and GBPUSD pushing them lower.

The next big data release this week will be Thursday with Retail sales figures for July and Price index data for Europe following shortly after. Again I believe a slow down in retail is to be expected and may see further negativity for the pound. If however European Data comes in worse than expected the Pound may gain some lost ground and would present an opportunity for Euro buyers.

So in summary my weekly outlook would be for further Sterling negativity followed by a possible window to buy Euros on Thursday dependent on data. If you have a holiday in the next week or so it may be the time to act now to avoid further disappointment.

Should you have any questions concerning your holiday and currency requirements please email me at accounts@currencydeals4u.co.uk and I will be more than happy to help.

Matt Sinclair

 

 

All eyes on Thursday’s BoE Interest Rate Decision and Potential Stimulus Package…

Like the British weather the Pound has seen a fair few ups and downs recently partially recovering some of the ground lost to the Brexit vote and then losing it again on the likes of Purchase Index Data release and poor manufacturing data. I believe this is just the beginning of a tug of war as data releases play against Brexit expectations, which are proving difficult to predict accurately.

The big news this week will be the Bank of England’s Interest rate decision on Thursday. Should they choose to cut the rate to 0.25 expect a drop in the Pounds value against most major currencies especially the Euro and US Dollar. At the same time if Mark Carney and his committee introduce a fresh round of Quantitative easing this will see further downward pressure on the Pound.

Now with both of these things to consider and further Brexit shocks down the road in the short term I feel the Pound is unlikely to gain in strength and could see GBPEURO levels dropping into the low teens.

Considering this if you have a holiday requirement in the next week I would be looking to act before Thursday.

Theresa May’s appointment adds value to the Pound

The recent political turmoil surrounding the Prime Minister has come to a conclusion with Theresa May being the only candidate left standing and consequently will be the countries new Prime Minister by tomorrow evening. This has helped steady the market with the Pound pushing slightly above 1.18 against the Euro at Market rate.

This may be short lived as a interest rate cut and possible quantitative easing looking more than likely to be announced Thursday at 12PM by the Monetary policy Committee. This will likely see the Pound once again drop back against most currencies.

Those with short term plans should be looking to act within the next 48 hours to take advantage of the current spike and avoid disappointment by the end of the week.

 

Brexit prediction fears begin to come to fruition. Sterling continues to drop.

Fresh blows to the UK’s economy have begun to play out over the last few days with 3 major fund managers halting withdrawals on UK property funds highlighting a weakening investor confidence in the pound sterling.

As such the Pound dropped to a new 31 year low against the dollar, briefly touching 1.27 before rising slightly to 1.29 today. Similar losses were seen against the Euro with the Market rate hovering at 1.17.

Domestic companies such as banks and supermarkets have seen sharp losses on the FTSE 250. With warnings of a price war between the supermarkets this is further highlighting the instability of the markets in general right now. As political unrest continues to grip all major parties I feel there are certainly more shocks around the corner.

My prediction for the rest of July will be further downward pressure on the Pound against most major currencies as Brexit fall out continues to play out financially and politically. Indeed Gold has jumped to fresh highs as investors look for safer ground such as government bonds and commodities.

With this in mind my clients should be looking to act sooner rather than later as the major holiday season approaches before levels such as 1.10 for the Euro are hit possibly by the end of July. On the flip side those with currency to sell that have been holding off since before the referendum are now seeing great returns on there investment.

We will always look to beat all competition on the high street on leftover currency for example 500 Euros today would give you a return of £416.67! Please get in contact for all buyback rates for up to 50 currencies too secure a great deal today.

Please don’t hesitate to contact us at help@currencydeals4u.co.uk or use the contact form on this website.