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Sterling exchange rates drop off a little as the Pound falls back out of fashion (Daniel Wright)
The Pound has slightly fallen out of favour once again this week seeing a drop against most major currencies over the past few days.
We have seen fairly poor economic data to start off the year for Sterling however I don’t feel this is enough to have seen such a drop on a trade weighted basis. personally this all appears to be down to the fact that an interest rate hike seems to be getting pushed further and further back by the Bank of England and the current drop in oil prices to the lowest level since May 2009 (under $50) per barrel which is leading to inflation dropping significantly and adding to the problems that are currently faced by the Bank of England.
An interest rate hike is generally seen as positive for the currency concerned and a cut in rates usually negative and even the mere speculation of a hike in interest rates can lead to quite a change in the value of a currency.
Many major analysts have been thinking that the Euro is in for a tough few weeks as well and I am of the same opinion, we have the potential of QE (Quantitative Easing) from the European Central Bank and also a pending Greek election which may lead to Greece starting the process of leaving the Eurozone. QE when introduced generally tends to weaken a currency so this could put pressure on the Euro, however much of this may have already been priced into the market.
The Euro is a funny old character as no matter what seems to be thrown at it, it just never seems to lie down so do not expect extreme weakness just yet.
I feel the Dollar charge will more than likely find resistance at the 1.50 level but unless we get some positive news for the U.K and quickly it could potentially break through it.
Regarding Australian Dollars, although there is a minor fightback going on at the moment the RBA Governor Glenn Stevens still keeps on commenting that he would like to see a weaker Australian Dollar so I feel this could head back to the 1.90 level in the near term.
If you have a pending currency transfer to carry out and you would like to get a commercial level of exchange rate for it then we can assist you. We deal with bank to bank transfers ranging from £5000 to multi-million Pound transfers and welcome any new enquiries for business or personal exchanges. We deal with a huge amount of overseas property transactions too so if you would like assistance with any of this and you find this site of use then feel free to email me (Daniel Wright) directly on [email protected] with a brief description of what you are looking to do and a contact number and I will be more than happy to call you personally.
Source: http://www.poundsterlingforecast.com/2015/01/08/sterling-exchange-rates-drop-off-a-little-as-the-pound-falls-back-out-of-fashion-daniel-wright/
