Sterling falls on better US Data

Thursday 25th August 2011

Good morning. After several days of not much happening with exchange rates, Sterling fell against the Euro and US Dollar yesterday. Investors had been betting on Sterling as a safe haven currency, but better than expected US data reversed this trend, pushing the Pound lower as we have been warning for several days. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1331

• GBP/USD 1.6384

• GBP/AUD 1.5644

• GBP/NZD 1.9717

• GBP/CHF 1.2993

• GBP/CAD 1.6156

• GBP/ZAR 11.848

• GBP/JPY 126.29

• GBP/DKK 8.4392

• GBP/NOK 8.8727

• EUR/USD 1.4459



Sterling falls on better US Data



Market Analysts have said some investors had been betting on the Pound in the last few weeks, on the perception the UK is a safer investment option, U.S. fiscal problems and the euro zone debt crisis that shows few signs of resolution. This meant that the Pound had gained in recent weeks, and exchange rates had risen. For some time we have been warning that the gains were not likely to last, and yesterday this was the case.



A surprise rise in durable goods orders from the USA for last month strengthened the US Dollar, and as a result Sterling weakened and fell against other currencies. For several days there has been little data in the markets to move exchange rates, but as soon as we got some, the Pounds gains came to an end.



While sterling has been supported due to its perceived "safe-haven" status, few expect it will gain much more due to expectations that UK interest rates will stay low for a prolonged period as Britain's economy struggles to recover.



The pound remains at risk of selling if economic data continues to show the recovery is stuttering as it would increase speculation that the Bank of England may opt for more quantitative easing. For the remainder of this week we have GDP figures from most major zones, which will show how each economy is growing, and we expect the numbers to have a significant effect on exchange rates.



Today's Data



The most important release today are German GDP figures. If poor these could weaken the Euro. In the USA we see Jobless Claims and Unemployment Data.



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Sterling vs Euro down due to GDP

Tuesday 26th July 2011
Good morning. Sterling is down this morning, ahead of GDP figures later today that are expected to show the economy has slowed. This has pushed the Pound down against other currencies, as the rate snapshot as at 08:30am below shows:

• GBP/EUR 1.1266
• GBP/USD 1.6335
• GBP/AUD 1.4942
• GBP/NZD 1.8736
• GBP/CAD 1.5398
• GBP/ZAR 10.941
• GBP/JPY 127.50
• GBP/DKK 8.3961
• GBP/NOK 8.7538
• EUR/USD 1.4494

UK GDP Figures today

UK growth figures published at 09:30am this morning are expected to show that the UK economy slowed between April and June. They may even show it contracted, some analysts forecast, after growth of 0.5% in the first quarter. This news has weakened Sterling, and exchange rates are down in anticipation of poor figures.

A weak figure from the Office for National Statistics will put pressure on the government to boost growth. The problem for the government is its plan for reducing the deficit relies on a certain amount of growth in the economy to increase the amount it raises through taxation and reduce the amount it spends on benefits.

However some organisations, including the International Monetary Fund (IMF), have supported the government's policy despite the lack of growth in the economy. The IMF said last month that the UK's high inflation and low growth had been unexpected but were largely temporary and that no changes to policy were yet needed.

Lacklustre growth or a contraction in the UK would add to expectations the Bank of England will keep interest rates on hold until late 2012 , and increase speculation policymakers may consider another round of quantitative easing, pumping more cash into the market to kickstart the economy. This would only weaken Sterling further.

Today's Data

Lot's of data from the UK today, including UK House Prices and UK GDP which if poor could push the Pound lower. Germany releases measures of Consumer Confidence and Retail Sales. From the USA we have Home Sales and Consumer Confidence.

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Pound up against Euro ahead of GDP figures

25th May 2011
Good morning. Sterling is back up above €1.15 against the Euro this morning, recovering losses yesterday after Moodys threatened to cut the credit rating of some UK banks. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1513


• GBP/USD 1.6147


• GBP/AUD 1.5410


• GBP/NZD 2.0355


• GBP/CAD 1.5834


• GBP/CHF 1.4201


• GBP/ZAR 11.350


• GBP/JPY 132.21


• GBP/NOK 9.039


• GBP/DKK 8.5842


• EUR/USD 1.4023

Pound up against Euro but analysts expect Sterling weakness

The credit agency Moodys recently said it may downgrade the rating of some UK banks and this weakened Sterling yesterday against most currencies. Small Euro gains against the Dollar also helped prop up Sterling.

Analysts say that the general weakness of Sterling vs the Euro mean that the Pound will probably remain vulnerable due to concerns about the banking sector and the fragile UK economic recovery.

Rates to buy Euros are now back to a 2 month high, so those that missed the chance on Monday to buy at these levels has another opportunity today. With weakness in the economy rates could fall back away, and it was only several weeks ago rates were at their worst for over a year.

Today's Data

At 09:30am this morning we see UK GDP figures. This is a measure of economic activity and will show by how much the economy is growing. It's the most important release of the week for Sterling and could well alter rate significantly.

We expect quarterly growth of 0.5%. If it's more than this then Sterling will gain against other currencies. If it's less, then this will show that the recovery is stalling and expect big falls for the Pound.

You can keep up to date throughout the day on our Twitter page. This will have regular rate updates and information on the GDP data in addition to other releases.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound falls vs Euro / GDP figures today

27th April 2011
Good morning. Sterling fell yesterday against the Euro, pushed down by broad strength in the single currency. The pound also faces more selling pressure if weak UK GDP data further dampens expectations for an interest rate rise in the coming months. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1222
• GBP/USD 1.6458
• GBP/AUD 1.5222
• GBP/NZD 2.0411
• GBP/CAD 1.5664
• GBP/CHF 1.4405
• GBP/ZAR 10.944
• GBP/JPY 134.52
• GBP/HUF 296.44
• GBP/NOK 8.7352
• EUR/USD 1.4662

Sterling falls against Euro

Traders said demand from a UK bank for euros against sterling yesterday strengthened the single currency, pushing GBP/EUR rates lower. It also had a knock-on effect on the pound versus the dollar, pushing it further away from a 16-month high hit last week.

Mounting speculation earlier this year that the Bank of England would soon raise interest rates put sterling on a broad upward trend. But an uninspiring run of UK data recently, including figures for industrial production, has prompted investors to take bets off the table that rates will rise from a record low 0.5 percent next month.

GDP figures today

At 09:30am today we see UK GDP data. It's the most important UK release of the week, and it's likely to cause volatility for the pound today.

"A weak GDP reading may completely take off the table the possibility of a May rate rise and seriously question whether rates will rise in August," said John Hydeskov, currency strategist at Danske.

To keep up to date with developments, follow us on twitter by clicking below. We update regularly throughout the day with exchange rates and economic figures that affect rates, such as today's GDP figures.




If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exchange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Sterling lower on Interest Rates/GDP figures today

29th March 2011 Good morning. Sterling is lower this morning as we'll see in a moment. Markets are awaiting UK GDP figures at 09:30am which may well cause a significant change in Sterling exchange rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1329


• GBP/USD 1.6015


• GBP/AUD 1.5612


• GBP/NZD 2.1277


• GBP/CAD 1.5603


• GBP/CHF 1.4643


• GBP/ZAR 10.968


• GBP/JPY 130.75


• GBP/HUF 302.77


• GBP/NOK 8.9436


• EUR/USD 1.4131

Sterling lower on interest rate expectations; GDP today

The pound fell broadly yesterday and again this morning, hitting a 5 month low versus the Euro and a 2 month low against the dollar. This was mainly due to a pullback in expectations on how soon interest rates may rise given a still fragile economy.

Sterling's falls have come as weak UK data raised concerns that poor economic growth could push back the timing of interest rate rises from the Bank of England. At the same time, investors expect euro zone interest rates to rise in April, a view that was pushing the euro higher.

This morning at 09:30am we will see the latest GDP figures. The Gross Domestic Product released by the office of National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity.

We expect the monthly figure to be -0.6% and the annual figure to be 1.5%. If the numbers are lower than this, then expect a sharp fall in Sterling exchange rates. Given the poor run of economic data of late we are expecting falls today.

If you need to buy Euros then consider either fixing a rate before this, or placing a Stop Loss order. this works by placing a lower level e.g. €1.11, and if rates should drop below this we will automatically secure your currency. This allows you to aim for a higher rate, but have a safety net in place should things not move your way.

Today's Data

Today is important for UK data, with GDP figures at 09:30am. We also have Mortgage approval figures and Money Supply data, so we expect some volatility for Sterling today. We also have some confidence measures from Germany and the USA today.

Keeping track of rate movements

Here on the blog, I give a brief market update at 08:30am with a snapshot of where rates stand. Throughout the day I also update our twitter page with currency rate updates, and important news that's affecting rates. It's a good way of keeping track of things throughout the day.

If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.

Pound falls vs Euro, GDP figures today

25th January 2011
Good morning. Sterling fell against the US Dollar and Euro yesterday due to doubts over when the Bank of England will raise interest rates. Falls against the Euro were bigger as the single currency drew some support from easing debt worries and tough talk about keeping inflation in check from European Central Bank chief Jean-Claude Trichet.

Today we have GDP figures for the UK which will cause volatility. More on this after the usual snapshot of rates as at 08:30am:

• GBP/EUR 1.1666
• GBP/USD 1.5922
• GBP/AUD 1.5991
• GBP/NZD 2.0811
• GBP/CAD 1.5810
• GBP/CHF 1.5123
• GBP/ZAR 11.169
• GBP/JPY 131.24
• GBP/HUF 319.34
• EUR/USD 1.3646

Sterling falls on Interest Rate expectations

Yesterday a Daily Telegraph article said the UK could be headed for stagflation and even small interest rate hikes could hurt. Implied rates based on overnight indexed swaps have pared chances of a 25 basis point rate hike in May to 65 percent, from 70 percent late last week.

Sterling has been well supported since higher-than-forecast UK inflation data this month caused investors to bring forward expectations for when the BoE will raise rates. However now that it looks like there is less chance of a hike any time soon, the Pound fell and exchange rates dropped.

As I mentioned in the intro, there was also tough talk from the ECB president about keeping inflation in check. This may mean an interest rate hike in the EU before the UK and so the Euro gained strength, compounding the fall in GBP/EUR rates.

UK GDP Growth figures today

The first estimate of 4th Quarter GDP will be released today and analysts expect growth to have slowed as a harsh winter is likely to have hurt construction activity and the service sector.

"With public finance data also due out the same day, traders will have a lot to digest in relation to the pound and its recent gains," said Michael Hewson, analyst at CMC Markets. "It could well be an interesting week for sterling."

The GDP figures, due to be released at 09:30am, are expected to show growth of between 0.2% and 0.6% in the three months up to December.

Howard Archer, chief UK and European economist at IHS Global Insight, said there was considerable uncertainty over how much December's severe weather hit overall activity.

As a result, the range of forecasts is wide, from 0.2% to 0.6%. The "consensus figure", drawn from a range of forecasters, is that the Office for National Statistics (ONS) will announce a 0.4% increase in growth in the fourth quarter.

If the figure is less than this then we expect Sterling to fall sharply. Of course any surprise increase in the figure and this may support the pound, but in our view there is more chance of worse than expected figures, and so the recent upwards trend in Sterling exchange rates could be reversed and the recent highs we hit vs the Euro and US Dollar may not be seen again for some time.

Today's Data in full

The most important UK figure today is the Gross Domestic Product. This is a broad measure of economic activity and shows if the UK economy is growing in line with forecasts. It often creates some volatility for Sterling. Later in the day we have some Consumer Confidence figures from the USA.

If you are looking for the best exchange rates, click the link below to send us an enquiry.