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By Alex Ellis

Looking ahead to next year there are 3 main factors that I believe will influence sterling exchange rates:

1. The Coalition’s austerity measures – these budget cuts are some of the most severe that the UK has ever witnessed and we could therefore see sterling weakness as a result. As unemployment is likely to rise following the cuts and VAT is set to increase we may see consumer spending affected.

2. Rising Inflation – this is a big issue because if inflation spirals out of control then the economy is much too fragile to be able to cope, until we can categorically see some significant growth. Usually the government would raise interest rates to tackle inflation but they are not able to in the present climate and therefore they remain stuck between a rock and a hard place.

3. Another issue for the pound is the exposure to the debt crisis within the Euro zone and this could escalate into a real problem if any further economies fall into a similar category as Greece and Ireland. I would expect that if this were to happen GBP/EUR exchange rates would suffer as a result.

As a currency broker we have a number of contract options which can be tailored to suit individual client needs and ensure that you minimise both your risk and are well informed before committing to an exchange rates. Currency Brokers’ exchange rates can be over 4% better than a high street bank, on a £100,000 currency exchange this equates to a saving of around £4000.

By Alex Ellis

UK GDP was revised downwards this morning from a previous of 0.8% to 0.7%, although this difference is marginal we have seen sterling suffer as a result. This could be the norm in the run up to Christmas as we could see retail sales figures suffer due to the adverse weather conditions when they are released. Obviously the Christmas period is supposedly the busiest time for the retail sector however predictions are that sales will be greatly impacted as people struggle to make it to work.

Looking in the longer term the Coalition budget cuts and austerity measures are due to come into play in the New Year as well as VAT rising to 20% all of these should cause the UK economy and ultimately the pound to stutter, therefore you may want to consider forward buying to protect your position and ensure you don’t risk losing thousands – December historically sees large drops in the exchange rates and this can be as much as 4% or a difference of £8,000 on a £200k currency conversion.

If you are looking at currency exchange or sending money overseas then an experienced currency broker can ensure that you are both well informed and minimising any risk when exchanging.

By Alex Ellis

On Monday RightMove released house price data and this showed that house prices increased by just 0.3% in the last month whereas this time last year the increase was 1.4%. The UK relies heavily on housing as both an indcator and boost for the general economy and therefore this release sent shock waves through the currency market for sterling.

Also released on Monday was a report from the Bank of England which stated that UK banks were hampering growth by not lending enough, this is something that the banks have consistently denied but if they are not lending then this completely defeats the purpose of the QE programme.

UK Retail sales are due to be released today at 09:30 AM an these account for 60% of the UK’s GDP therefore this will be very important for GBP exchange rates, use our contact us form to check the impact of this release.

By Alex Ellis

Sterling has lost around across the board today as Inflation figures were released higher than expected, this would normally be seen as a positive for the currency however investors seemed to cash in on the high and sold their positions therefore causing the pound to weaken. Looking ahead the future for sterling is beginning to look bleak and investors are starting to recognise this.

VAT is due to rise in January, more cival unrest and increased pressure on the coalition government all are not painting a positive picture for the future of the currency.

If you have an upcoming currency exchange then you will want to ensure that you are well informed and by contacting a currency broker you can be made aware of any upcoming data releases which may impact the value of your conversion. Currency brokers also have a numbers of tools and contract options at their disposal to ensure that your position is constantly protected.

By Alex Ellis

Right Move released house price figures this morning and these showed a fall of 3% causing sterling to weaken slightly this morning. Sterling has also suffered as a study conducted by the Bank of England has shown that banks are harming the recovery by limiting access to credit.

Until the UK economy recovers we have got no chance of seeing exchange rates anywhere near levels seen prior to the recession and in fact we may have to start considering that we will never see rates anywhere near the 1.50 mark.

This week there are a number of other economic releases for sterling all of which have the potential to cause market movement; the two that I would single out are the Consumer Price and Retail Price Indicies released tomorrow at 09:30 GMT both of which if released worse than expected could cause sterling to lose strength.

Even when it seems that all the elements are against you, using a currency broker ensures that you are well informed before committing to any currency purchase, as well as having a number of tools availible that will help to minimise your risk.