Update – 5 Reasons Why the British Pound is Being Pounded – Access my latest article Feb 28, 2010
http://www.kathylien.com/site/british-pound/british-pound-5-reasons-why-the-pound-is-being-pounded
How Did the British Pound Trade in 2008?
The British pound was one of the worst performing currencies in 2008. It fell to a 6 year low against the US dollar and record low against the Euro in addition to selling off against every other G10 currency. The overwhelming weakness in the currency is a direct reflection of the impact that the credit crisis had on the UK economy. In the month of December, many currencies recovered against the US dollar, but unfortunately the British pound was not one of them. Although the pound could continue to weaken in the first quarter, the government’s aggressive fiscal and monetary stimulus should help the country recover towards the end of 2009.
Official Recession in 2009
Without two consecutive quarters of negative GDP growth, the UK economy is not technically in a recession but that should change in the first quarter of 2009, when the 2008 Q4 GDP numbers are released. Growth has been slowing materially and the weakness is reflected in the British pound. GDP growth fell by 0.6 percent in the third quarter, the largest decline in 18 years. The housing market and the financial sector have been the engine of growth in UK for the past few years and both blew up in 2008. Unfortunately the worst is probably not over for the 2 key components of the UK economy, particularly following the Bernie Madoff’s Ponzi scheme. In addition to losses suffered from the subprime mortgage crisis, many large hedge funds and European banks invested with Madoff’s. In 2009, they will be forced to write down those losses and deal with what could be pretty severe consequences for the financial sector as a whole. With the financial and housing market sectors expected to remain weak in the first half of 2009 and layoffs predicted to rise, GDP growth could fall as much as 2 percent next year. Although we believe that the country could be one of the first to recovery from the global economic downturn, this will not before more pain is felt in the UK economy. The severity of the UK recession will be largely dependent upon how quickly the credit markets are restored in 2009.
Inflation to Fall Back to 2%
Even though falling oil prices has driven inflation lower in the UK, the annualized pace of consumer price growth is still well above the central bank’s 2 percent target and even higher than their 3 percent upper limit. The latest data is for the month of October and according to that report, consumer prices rose 4.1 percent yoy. Despite the high level of inflation, the central bank has pretty much abandoned the inflation target and shifted their focus back to growth because they believe that the slowdown in the economy will naturally drive inflation lower. They believe inflation could fall back to 2 percent as early as the first quarter.
More Rate Cuts in First Half of 2009
Next to the Federal Reserve, the Bank of England has been the most aggressive central bank in 2008, having cut interest rates by 350bp to 2 percent, the lowest level in 57 years. Despite the massive interest rate cuts, tax cuts and other fiscal stimulus, the Bank of England remains committed to doing all that it takes to prevent a recession from sparking deflation. Central Bank Governor King believes that the economy will contract in 2009 and given his pledge UK interest rates could fall by another 100bp in the first half of the year. Although zero interest rates are not expected in the UK, interest rates will fall below 2 percent and until the Bank of England is done easing, the British pound may remain weak.
EUR/GBP at Parity
The sell-off of the British pound in the first few months of the year could drive EUR/GBP to parity. If that happens, it would be the first time ever that one Euro would be worth more than one British pound. This could not come at a better time than 2009, when the Euro celebrates its 10-year anniversary. In this past decade, the currency has risen from ashes to become more valuable than the 2 primary reserve currencies in the world. Although many Britons may be alarmed at the weakness of their exchange rate, the Bank of England will probably not step in to stop it from falling. Instead, the BoE will revel in the stimulative effects of a weak currency. There are already reports of Europeans from the Eurozone flocking to the UK for their holidays. The weakness of the British pound against both the US dollar and the Euro are key ingredients for an economic recovery.
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Keep an Eye Out for a Recovery
Although the UK economy still faces many risks in 2009, there is hope. Consumer spending has been pretty resilient with November retail sales rising for the first time in 3 months. If the global economy begins to recover, we expect the UK economy to outperform its peers thanks to the Bank of England’s proactiveness. The currency has sold off significantly, providing additional stimulus for the battered economy. Even if there is no full-blown recovery, the UK economy is much further long in their slowdown than the Eurozone. Therefore if we see sharply weaker growth in the Eurozone economy in 2009, expectations for more aggressive ECB interest rate cuts may be all that the British pound needs to recover against the Euro. As for the US dollar, the recovery could come sooner if the quantitative easing forces the greenback lower. When the UK economy begins to recover, so will its currency.
For my technical forecast for the GBP/USD, read my full 2009 currency market forecasts on GFTForex.com
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I think GBP is forming a bottom, and I will consider to buy it when it break out from the bottom.
All mainstream sites are shouting about GBP – Euro parity. It means time is ripe for correction. Which will be painful for Pound bears.
What do you think about the possibility of the rumors for GBP recovery in 2009 Q3?
Thks,
Ip > I am looking for a possible GBP recovery in the second half of the year
I am looking to transfer a large amount of Euro’s to GBP. GBP has recovered from 1.01 to 1.12 in the last 2 weeks. Is this trend going to continue (should i transfer now) or do you forsee another drop to 1.02 or even parity?
Thanks
Seeing the movements in the exchange rates, I got scared that GBP will fall below Euro, so I took the risk and exchanged GBP in EURO in early December 2008 for the rate £1 = 1.08 Euro. Today £1 = 1.12 Euro and I have started to think that I have made a mistake and I’m thinking to get the money back in GBP before the situation worsen. Mainly, is the same question which Stephen Smith has asked. Many thanks.
So where do you see the GBP/USD going not the quantative easing is on the cards?
I’m looking for a recovery in the GBP towards the end of the year
Will the Britsh pound continue to grow stronger against the Australian Dollar??
I have some dollars what currency should I buy tomarrow.
I dont even any individual advice on currencies here. I do believe that we could see more strength in the gbp against the aud
how do you think the gbp will perform agianst the canadian dollar?
I think it will appreciate
thank you kathy
i need to know that is it possible that 1 usd will be equivalent to 1 gbp sooner or later please reply
Not likely but we could see GBP/USD = 1.30
Kathy, do you see the GBP going further down in the first and second quarters before it starts picking up again against the EUR?
What about GBP/JYP? It is sitting at 1.19 (all time low). If GBP/USD drops to 1.30 where do you see it against the yen? Also, do you think it will get to 1:1 against the yen?
If you understand the British, then you know what they call a “bitter pill”, the current situation with their GBP is exactly a British style performance,as they always “love” to use a weak GBP currency to make a quick balance with any finance crisis as they would like to bring back their economy by weak currency, therefore you should not expect any recovery on their currency until you see their economy getting better………
I expect to need a substantial amount of GBP in 1 to 2 years from now. I have the equivalent amount in USD. Do you think the best strategy is to start exchanging now in small installments, or should I leave it for later in the year? Thank you very much.
There is no telling how weak the pound will become in this economic climate. Instability in the markets is being fuelled by the actions of the British Government, who were unable to foresee the looming crisis despite the warnings for years by the IMF. The future is in the hands of this inept government, and that is particularly worrying when we consider the fact that the whole country will be paying for the risks taken by so few, and yet which affect so many. The pound will weaken further before recovering towards the end of 2009. At a guess, the pound will be 1.30 and later 1.50 against the Dollar
to Dafni- I assume you need GBP for business reasons, not investment reasons.
If so, one way to meet your need is to buy long-dated calls. this is cheap insurance against large movements that could happen especially in the late part of 09, early 2010
Saxo Bank is one good place to buy FX options.
for example, a slightly out of the money call at 1.45 strike for December 09 expiry is has a premium of $766 for $50,000 (Jan 22, current spot = 1.3860), 1.5% of $50k
a 1.50 strike is $592, or 1.2% of the $50,000.
cheap insurance, and if GBP is actually lower, you’ve lost very little, compared to exchanging now and being exposed to larger risk.
Now that we know what’s going to happen to the pound we can ask ourselves a critical question. Who shall accept responsibility for our current situation, and more importantly, who shall we prosecute? After all, we were happy to jail Nick Leeson for his part in a ‘minor’ banking issue. There must be 50,000 Nick Leeson’s out there waiting nervously to find out what happens next. And, Chancellors of the Exchequer should have no immunity!!! Will we ever see any justice?
It’s amazing! Governments are more geared up to tax and track the average businessman/worker, and yet, the whole Banking world get a special indemnity. I suggest the reason for this is; that they are unable to comprehend the complex mathematical models employed by the Banking industry.
And where does this leave Britain? In the same mess that the Labour party always leave the country, severely wounded! But, the Tories didn’t have a game plan either. None of the politicians were able to foresee (except for the Lib/Dem shadow C.O.E whose feeble effort to alert us was like a puff of hot air).
Governments have never been equipped to run any Nationalised Industry efficiently. So, where does that leave us now?
When do you think the gbp will perform good agianst the Indian Rupee? It was 86 2-3 months back and 66 now
. have to transfer GBP to India , any idea how long wait will be worth to make a try ? Thanks a lot in advance . i like this blog and all commets as well
Dear all,
I hope you will be doing excellent. My business is purty export oriented in rice from pakistan. I sealed an order in gbp a month ago when it was at Rs.117 against the Pak rupee but i received the payment it declined to Rs.108. this loss was bitter for me to digest but had to owing to finantial crisis. Now I am again going to seal orders for next shipment,, can you please give me your expert opinion that either i should seal order in GBP or USD?? what is future scenrio of GBP, I will be eagerly waiting your reply and expert opinion,
Regards,
asif rana
http://www.atlasfoods.org
A concern!
Hi there
I moved to the US a few months back and declined to move to dollars as payment. this decision was based upon the strong pound:dollar performance history and this giving me a better salary entry point back into the UK in 2 years – a decision i now regret. is the pound likely to recover to above 1.5 against the USD or do i need to go back to my employer “cap in hand”! its costing me thousands a month at the moment!
thanks
Hi Kathy,
Thank you for such fantastic data you have provided. I wish I had come across your analysis before few weeks. Our problem is similar to what Amit has mentioned above. We have GBP balance which needs to be converted to USD and INR. We are now paying almost twice for purchase of new servers which has become a big trouble though the Business has shown improvement in past 3 weeks.
I would like to know what would be the right time to convert GBP to USD and INR. We can manage to run our Business with existing bank balance for next 3 – 4 months, but what if things don’t change even after that period ?
I think that this blog is very useful and interesting but it does make me nervous! I have booked a holiday to the USA in March and have since seen the GBP drop and drop. I did buy some dollars at about 1.4726 a few weeks ago. Now the dollar is 1.345. Should I buy some more dollars asap?
I know there must lots of people in a similar situation to myself and would be most grateful for your advice.
There are few people who want to convert GBP to INR. My personal suggestion is to wait if you can till June/July when we can expect the Pound to appreciate. Meanwhile, you can earn good interest in bank like ICICI who offer a good rate. Transferring money now will be a worst idea as the Pound is in its lowest level.
Hi,
I am carring some pounds with me when it was 86 to indian currency ,please suggest me something good so that i dont face loss,do i have to wait for long and if yes how long will it take to recover else will be better to convert it to some other currency
thanks
Kathy
I go on holiday to th USA in June 2009. Should i buy the dollar at todays rate? Or do you visualise the pound gaining against the dollar in the coming weeks?
Thanks
GBP/USD is very tricky at the moment. Think we are seeing small reverse to about 1.42 mark (sometime this week) and then down possible to 1.33 and maybe 1.30 which should form a bottom. (between now and mid-feb – depending on economic news – it could go either way)
GBP has a lot of bad news currently factored in and the BoE is happy with the position of GBP to try and stimulate exports – USD has the Obama factor and risk aversion, so i would expect Bearish conditions for the next month or so.
If UK economy (particular hosuing) starts to show signs of hitting a bottom in the next 3-6 months i would expect some recovery for Cable in the later summer/early autumn. Possibly to 1.5 with top at 1.62-6 mark
If i was holding USD I would move shortly as i suspect 1.3 would form a formiable resistance (could still be broken but 1.3 is a real floor, if 1.3 broken then GBP could go into free-fall!!)
Dear Kathy / All,
I have UAE Dirhams which I need to convert to UK GBP. I realise the GBP currency is an all time low but to maximise my exchange should I wait until it goes much lower – Basically are we expecting the GBP to drop further or not ?
The best drop I have seen was last week againt the UAE Dirham (4.90).
My apologies to those on the other side of the fence who are waiting for the GBP to recover so they can minimise their losses !!!
Thank you in advance for all your help and advice
IQ
Thanks Jacko, much appreciated.
Moiz,
The GBP/INR rate will not go to 86 in the near future(atleast this year). The GBP has weakened against all the currencies so there is no point buying any other currency. My personal suggestion is to wait and meanwhile invest it in something else like fixed deposit.
Very interesting comments by George Soros today in Davos when talking of sterling:
“It seemed to me that the risk-reward no longer makes it clear which way we should go at this. While we did have a short position on sterling, it does not mean that I am ‘bearish’ today, but it does not mean that I’m bullish either”
Basically looks like he thinks that short positions on the pound do not offer enough reward i.e. the Pound is close too or at its lowest mark against USD (and potentially other currencies)
Doesn’t look positive about the short term outlook either but if we are to take 1.30 – 1.40 as being rock bottom for sterling then it is at least a platform to gauge sterling in the short-medium term
Still think we will see downward movement in the next few weeks to test the mid 1.30’s (probably around the time of BoE base rate decision) even though i think a .5% cut is already factored into sterling.
Looks like the Barclays statement is adding more weight to sterling than I expected. I would say the key time for buying/selling cable this pair will be April when the banks end of year accounts are published. Better than expected results will bring support for sterling, skeletons in the closet (i.e. RBS) will be a massive hammer blow
In response to a couple of Q’s – this time with spell checker
– please delete above post
GBP-JPY Pair – Not really a market I follow but….I would expect some pull back from the 120 low seen last week. This pair will follow the market, whenever there is perceived risk then there will be a flight to the JPY.
Not too much the BoJ can do about the Yen, they want a much lower rate (esp. against the $ for Japanese exports) but whenever uncertainty prevails JPY will be very strong
GBP-CAD – A fleeting interested as one of our service contracts is paid in CAD, although we already have 80% of the required CAD currently for this years contact. Loony is driven by commod. prices and will oil etc. still falling i can see some reversals for sterling.
Would expect some movement back towards $1.76-1.8 shortly and further gains later in the year. Would not expect massive bang but gradual movement towards the $1.9 mark as I cannot see any real strength behind the CAD, think the only reason we see the current lower 1.7x is the weakness of GBP
Hi All,
I have some fixed deposits with Indian bank in GBP approx.30,000
I bought it when it was 1 GBP=84 INR.
Interest rate is 6%/year.
It actually huge loss till now.
Is it any good to convert them into INR now? i think now its 1 GBP=67 INR.
Rushel!! R u fool to convert money from GBP to INR @ this moment.
how long will it takes for the GBP to rise again after its’ Value deterioration within the economy crisis?
Hi I am holding a large amount of dollars which I need to convert to pounds, should I do it now or wait for the rate to drop again, i am so annoyed I didn’t make the switch 25th Jan indications were for a further drop so I held…
I think GBP will go up in Q1 of 2009
Still think we will test 1.33ish mark in the next few weeks – wait till later in week to see what BoE do with base rates. 0.5 cut is already largely factored in but anything bigger would see bear market for sterling with possibility of testing 1.3
Manufacturing sentiment has show improvements from today’s figures but still sterling is sliding, still think there is room to the down, see where Thursday’s BoE decision takes us as I expect largely down on Sterling for most of Feb
My calls so far on CAD & JPY seem to have been largely held, so hoping im correct on cable
Hi
I am a techy and do not understand finance and Forex . I worked in UK and have some 3000 GBP in my UK account. I am really upset to see 1 GBP =67 INR.Can anybody please suggest me as to how long should i wait for GBP to become stronger ? and also at what GBP to INR Exchage rate i should convert my money ?
Regards
CS
I bought 5000 British pounds at $1.753 Canadian for 1 British Pound.
Did I get a good deal or was it a sour one? I am worried that the pound will fall further to $1.50 Canadian, and a day may never come that I would be able to recover let alone make any money from this buying and selling. I bought it out of the fear that the Amero would come, and with the collapse of the US economy Canada falling down with it overnight.
Probably nobody knowns where currencies go on FOREX. Professional traders and investors only suppose and employ methods to curb losses. Nobody will say here : look mate, CAD will get stronger against GBP, I know! What we can say for sure is that the capital runs from small, unstable and recently (2001-2008) ‘blown into bubbles’ currencies. Personally, I would avoid exotics like INR. Amero is a conspiracy theory which is more laughable than probable.
Julie- you might do well to wait for this Thursday BoE interest rate statement. it might negatively impact the GBP, and provide a good time to convert. But do it before Fridays US unemployment numbers come out… likely to be a bad number, weakening $
if this is for a future business transaction, you might also hedge your position with Fx options.
I will try and encapsulate this in a few lines……
As Paul says BoE sets base rate on Thursday – think .5% cut is already factored into sterling – any more would probably see fail, anything equal or less would see sterling probably raise.
Medium term I believe sterling will following the markets (much as we’ve seen today – early losses to USD then big gains when market closed 1.7% at time of writing). March/April will be potentially big months for Cable – banks will announce results – think its save to say worse than expected losses or other “skeletons in the closet” (i.e. RBS) will have a major downside effect on sterling opposite will see positive for sterling – think GBP/USD will be very financial media sensitive in the coming months.
I’ve seen estimates on sterling for the coming months ranging from £1 = $1 to £1 = $1.80 by April, so I do not think anyone has a real handle where this is going medium to long term – I personally sit somewhere in the middle – I expected you will see a downside shortly followed by some correction and eventually more bullishness for sterling as risk aversion abates and credit starts to flow again – again this could all change depending on news events – as they say “Watch this space”
Hi Kathy,
Your blog is very informative. My concern like many others is GBP to INR rate. I converted when GBP was 83 INR. How long should I wait till I convert it back?
To Paul Stafford:
Sorry it has taken so long to answer. First of all, thanks for the advice. However, I opened a demo account at SaxoBank and am confused.
Right now, for example, a 1.55 call strike for December 09 expiry has a premium of $3015 for $50,000 (Jan 22, current spot = 1.4640).
So the premium I see is more like 6% rather than the 1-2% you quote. Am I wrong?
Sorry, current spot was Feb. 5, not Jan 22.
Hi Dafni
the premiums vary minute to minute, depending on volatility and recent news.
I looked back and when I quoted those numbers on Jan 22, the spot was 1.3860.
its now 1.4660, 800 pips later in only 10 trading days. that’s 5.48%, or an annualized volatility of 35%+, which is huge, and very likely more than it had been preceding my post.
that huge jump in volatility may account for the increase in premiums.
Thanks a lot for the clarification, I will keep monitoring the premiums.
Hi,
I was hoping to buy GBP with US$ but see quite a jump in the wrong direction for me! Now that the BoE has dropped the interest rates do you think the $1.48 mark is as good as I can get this month???
Thanks
I am holding an amount of Euro and would like to exchange to INR.Is there any chance of hike in exchange rate in near future
Thanks
Cannot see return to $1.3x now – think resistance will be at $1.40 but market appears bullish for sterling at the moment
On the monthly I can see the potential for a double bottom with move to $1.45 area and then backup to test $1.60 short-term and $1.75 mid-term (on Elliott wave)
Short-term market is still very volatile, but thinking $1.37 was bottom for GBP – I expected move to $1.33 (boy was i wrong and it cost!!!) but GBP found support at $1.40 and that now looks like key support.
Expect stimulus package (if passed) will give short term support with move away from risk aversion, so expect move away from USD & JPY as risk appetite returns to the markets for a short while.
Take a rain check on the above post!!
I’m out of cable for the time being – cashed in shorts when it went to $1.46, but $1.44 is crazy – following the DOW in going down (3% in just over 3 hrs). Was going to add Longs at $1.45 but will wait until I see clear signal of where the market is heading
Suspect some re-trace but I am not adding longs yet as volatility is wild – the rhetoric from Obama/Geithner and the stimulus package is really sucking confidence from the market and risk aversion is driving USD & JPY higher.
The package is woolly (the private sector debt bit), difficult to digest and provides no reassurance that the Fed has a grasp on how much this will cost or how long it will take. I will take a back seat for the time being on cable until a pattern develops, although i suspect we may see bears in the market after this.
If you agree or disagree with package, the delivery of it was truly awful, something that could have provided confidence with a cautious edge was what i was expected…….but this will take some digesting
I was persuaded on Monday to sell dollars to pounds at 1.5 because the broker said he thought the market would continue to go against me as it had done all week. Now I regret it though I haven’t paid the broker yet. It was a verbal contract on the phone. Is the verbal contract binding? It may have been recorded. I know that there is always a risk that things move for and against but I feel that the broker was overly confident in his advice which persuaded me to sell.
Sorry Marko nothing much you can do
Upto Yesterday i would have agreed pretty much with your broker – i expected up after stimulus package then retrace down (to form double bottom) then major head north to possible $1.6x mark with confidence and risk appreciation returning to the market.
Yesterday was a bomb shell and possible re-test of 1.395 inside next week. I was fairly confident of mid/long term bullish market but after yesterday i will sit on the fence until the next major move occurs.
Thanks. I thought so. I content myself with knowing that 1.5 is a good rate compared to what we were getting 6 months ago. Does anyone have any advice on a good broker for forward contracts? Some seem to want a very large deposit.
Hi, I am looking forward to convert some GBP into INR. Can somebody give a forecast as to what to expect or when it is advisable to convert?
Thank you
Kavitha
forecasting is pretty hard- if it was easy, we’d all be rich! having said that, a couple of objective tools you can use are
1) sovereign credit default swap (CDS) rates. if the spread is widening, it means the country is at more risk of default on their debt, and thus a weakening currency.
2) check the volatility skew on options. if the market makers are pricing in more volatility on the calls than puts (say 20% vs 17%) then they are expecting a move upwards.
3) Chicago Futures exchange. there, you can find the number of long and short contracts, and the changes over the previous week. if the big guys (banks, hedge funds) are going long, its an indication of an upward pressure on the currency.
4) beyond this, there are a ton of other fundamental indicators (interest rate differentials, PPP, GDP growth etc.) as well as technical indicators- welcome to FX!
lastly, if you are not a speculator, but running a business and need to protect the exchange rate for profitability issues (I think there are a few of you out there), you can use risk reversals (collars, range forwards etc). typically priced as a 25 delta, you’ll see quotes for 25RR or 25 Fly, from 1 week through 1 yr.
contact me directly if you need a source for this data
Dear Kathy,
Can you please talk more about the impact of quantitative easing by the BoE? Have they already taken the actions, and if so, what exactly are they doing? How will this impact the GBP/USD pair?
I am looking to buy a house in the US in the near future. We have a US bank account and am hoping to transfer money from my UK account over. At the moment, the exchange rate is way too low (I based the price of the house when the exchange rate was $1.70) and am anticipating Jun/Jul as a good time to move money. From what I have seen (and I am by no means an expert) I can see the pound rallying shortly but was wondering if it will falter.
Any advice is welcome.
Jim,
the FEB issue of Goldman Sachs FX monthly analyst was bullish on GBP, and bearish on $ and JPY.
You can either take your chances on this playing out (I, myself am long GPBJPY), or you can hedge using a risk reversal as I mentioned above. very common for businesses to limit their fx risk this way.
the GBP/$ 200 Day MA is about 175, so mean reversion is on your side. trade deficits have been falling, latest claimant count change less than anticipated. $ OUGHT to be hurt by rising deficits- $2T of Treasuries to be sold this year.
having said that, there’s plenty to be unhappy about, too. sovereign CDS rates on GB are creeping up- now 135 bps. Business Monitor Intl was very bearish on GB, based on large deficits and still contracting economy. BoE to begin “quantitative easing” (code for printing money)
Earnt 250 pips on latest down money by cable
Waiting for re-entry on longs with target of 1.49x mark
As stated before Sterling is closely linked to the markets – the latest downward movement is a result of 3 events (Geithner’s stimulus package, BoE inflation report & Kings speech and CBI report) all which affected the markets, nothing in the technical’s has changed for sterling – just reaction to news, this is how it is going to be for the next few months.
Not sure about June/July – think April/May will be massive for GBP/USD, company results will be announced, possible measures like QE will become clearer, rate cuts will have made their way into the “real” economy and hopefully the stimulus package will have begun to take effect.
Depending how the markets act to the above will determine which way cable (and sterling in general) will move.
Paul and Jacko,
Thanks.
I’ll leave it a month or so and see how the markets are doing. I feel you may be right, but even a couple of cents on the sterling can make a big difference when we are talking six figures.
What’s your best guess of how the British £ will do against the Thai Baht? Going to Thailand for two months in June ’09 and wonder whether it’s wise to exchange currency now, or wait until I get there.
I think (/hope) GBP/INR will reach 75 over the next few months probably because of 1) general increase in risk aversion resulting in outflow of funds by FIIs (though this will benefit USD more) 2) downgrade of sovreign debt to junk territory due to high fiscal deficit 3) another 100bp cut in repo rates….lets see how it goes.
I’m going to USA in August and September from UK so am wondering should i exchange my money now or will i be in a better position to do it now?
I’m also going to Canada in June so the same question lies there?
Basically when is best to convert GBP to USD or CND dollars?
Thanks for any help guys!
Kara
I think you’ll see your best rate later- GBP will strengthen during that time, IMHO, to at least 1.5 or 1.6. $ will weaken as treasury tries to sell additional $2T in debt, and yet the Fed will be keeping interest rates low by buying them itself.
of course, from 1.42 to 1.6 is only 11% or so. It might save you a few hundred Pounds
I see the relative $/CAD rates staying pretty close to where they are (in fact I have a butterfly option trade betting on that very idea).
Hi Paul,
GBP/INR
You said:
“1) sovereign credit default swap (CDS) rates. if the spread is widening, it means the country is at more risk of default on their debt, and thus a weakening currency.
2) check the volatility skew on options. if the market makers are pricing in more volatility on the calls than puts (say 20% vs 17%) then they are expecting a move upwards.
3) Chicago Futures exchange. there, you can find the number of long and short contracts, and the changes over the previous week. if the big guys (banks, hedge funds) are going long, its an indication of an upward pressure on the currency.
4) beyond this, there are a ton of other fundamental indicators (interest rate differentials, PPP, GDP growth etc.) as well as technical indicators- welcome to FX
contact me directly if you need a source for this data”
I need to source this data – as am looking at transferring some GBP to INR failry soonish. Please could you email me at [email protected].
I was trying to follow up http://www.forecasts.org/exchange-rate/british-pound-exchange-rate.htm but looks like its not gonna be much of a use to project GBP VS INR. Lately I have seen that its increasing so I am making less loss now.
I am still confused what to do with the money. Do you guyz thing GBP will reach 75 – 78 during the month of June July ?
I cant really do research or calculations myself as i dont understand much in finance. But reading different blogs I guess GBP will go down further in the coming months where GBP > INR may just be 65 ??? :O
Please suggest.
Mac- I tried emailing you at that address, and also at [email protected].
neither worked.
also, much of this data is from for-pay sources, which I doubt you’d be interested in paying.
you can, however, find this data in my newsletter (visit http://www.4xtradertools.com)
I am concerned at the rate of the THAI BAHT, rather low now, as compared to 2 years ago. I need to transfer some funds from Thailand to the UK. What is your prediction for the Baht. Will it head above the current 50 to the pound or below in the coming weeks ?
Will this be the right time to convert GBP – to – AUS$’s?
I need the AUS$’s in June ’09.
Should I wait for few more weeks/months before the conversion? Thanks in advance for your advice.
personally, I don’t think it will make much difference. GBP/AUD seems to be trading in a fairly tight range, and I don’t think there will be much move outside 2.10-2.25, or 5-7% max
if you’re talking a great deal of money (ie this is for business, not travel), you can set convert now and set up up a risk reversal or a collar – this is
Long underlying
Short OTM call option
Long OTM put option
and for the net premium, limits the net loss or gain.
Hi my husband and i are going on holiday to the us in early september will the $ travel rate be any better by then?
Kate,
IMHO and some other Delta traders i’ve spoken with i would expect some retrace of the pound as the year progresses.
Short term – I’m expecting retest of $1.39x levels then rebound back to mid 1.40’s
Medium Term – Expect the $1.50 – 1.60 level
Long term (6 months) expect to be around the $1.7 level
As with anything these expectations can change. So far we have not seen a clear daily break of lower than 1.37 and major support will be found at 1.35 if 1.37 is broken, so would not expect pound to go below $1.35. Historically the pound is traditionally weaker in March with some pick up heading towards British summer, so hopefully come Sept you will see better exchange rates
Kate- I agree with Jacko, for two reasons.
1)GBP strenthening for a lot of reasons:
BoE has taken an early lead in QE (buying gilts and private sector debt), housing price declines leveling off, CPI still rather positive, composite PMI was up, retail sales remain reasonable, and sovereign CDS rates are declining, indicating lower possibility of gov default. From a technician’s standpoint, GBP/$ is trading 3,000 pips below 200 dma, and 700 pips below PPP (purchasing price parity), both providing upwards pressure. Against this is UK budget balance dropping from -3% to -11%…ouch. (but of course, so did USA)
2) $ Weakening
at least for now, a decrease in risk aversion (which has boosted $ recently), a huge increase in USA negative budget balance and overall debt, and the upcoming effects of the treasury needing to sell $2T of debt this year will weaken the $. Wildcard- Who knows what China might do if the US annoys them (see todays article on China flexing muscle)
I won’t venture a guess at levels, only to say GBP/$ should improve over the next 3-6 months- so you should wait to convert.
HI Paul, I have some dollars to convert into Sterling. It looks like Sterling got its strength back to 1.4 or even higher, wonder if any chance it might fall again to against dollar back to 1.35 in March or early April? thanks
Neil,
(as I write, GBP/$ trading at 1.40)
you have the opposite problem of Kate!
Most of my thinking/trading looks out much further than a month or two, as I use mostly fundamentals, and a month or two just isn’t enough time for mean reversion to work its magic. Its certainly possible for GPB/$ to fall to 1.35, although it looks like there’s some strong support at 1.37, and strong resistance at 1.47/9
tomorrow is a big data day for GBP, and it could swing either way.
my (and Goldman-Sachs) long term view is for GBP/$ to hit 1.5/6 in 3-6 months. see all my points to Kate…
However, it might take a month or two to really get going. UK just hit -11% budget balance, and many other indicators (eg risk reversals, sovereign credit rating) are still somewhat weak.
it seems to be positively correlated to financial stocks, so if you have a short term view of those (eg Barclays), it is relevant.
really, though, I cant hazard a guess for only a month out. that would be guessing at noise…
Hi Neil,
I think we will see movement towards $1.35 within the next few week (possibly in the next few days)
My short term target of $1.39 has been hit and still think its a bear market, so i would expect further weakness in sterling in response to todays data on unemployment and IMF “leak” and general concern on GB economy – countering this is the risk in stock prices which is reducing $ demand as a safe heaven
Traditional March is a weak month for sterling with March traditionally being annual low (Commodity Trader’s Almanac) – as Paul says possible movement back towards $1.5x – $1.6 by mid summer and then further correction towards $1.7 as posted earlier.
IMHO, if i was holding dollars and wished to trade, i would be looking to move shortly, very strong resistance can be expected at 1.37 & 1.35 – so not a lot of range to the downside but quite a lot of potential to the up, if risk aversion subsides
This is only my opinion, depends how much of a gambler you are and how much money you are transferring – USD/GBP is not for the faint hearted at the moment and is very difficult to call accurately!!
Hi all,
I’ve been trying to figure out the effect of rise and fall in GBP VS US$ on INR’s. I posted a question earlier but not sure if it was ever recorded. I can see some rise in GBP value in the last few weeks and i have started to transfer little by little funds to balance out the over all loss I’ve made. Is there any change over the next 3 months that GBP’s value against INR will be higher ??? i.e. as of now its as follows
1 UK£ = 73.1371761 Indian rupees can it reach anywhere near
1 UK£ = 78 – 80 Indian rupees over the next 3 months ?
hello Kathy,
I’m planning to transfer Pounds to India.. when do you recommend it? Please help.
thanks.
Hi Anu,
here’s my 2 cents.
the INR has weakened a lot, and will remain weak in the near term. A very high fiscal deficit, widening trade deficit, and recent S&P downgrade of India’s sovereign risk to “negative” all contribute. GDP growth was lower than consensus, and even the agri segment contracted.
However, 6-12 months from now it should strengthen slightly because its relative growth outlook (compared to other regions) is not too bad, and FDI is still strong (according to Economist). I think remittances also remain positive.
Cable was down, but recently somewhat stronger (esp against $). However, recent articles have indicated its recession might last quite a bit longer than others (see FT). This might be the strongest Cable gets for a while…
Therefore, I would recommend exchanging Pounds for INR now rather than later.
Kathy- anything to add?
Thanks Paul. That was very helpful indeed.
Hi Paul,
I am moving back to the UK in Early November 2009. Should I change up a few thousand USD’s now or wait. It looks like the pound is creeping back up against the US Dollar. I will have to wait to change up another few thousand as I don’t have the money in hand yet and won’t until nearer November 09. But for now with what I do have should I convert my USD to GBP or still wait…….Thanks
Hi Bren,
GBP/$ is such a mixed bag right now.
on the positive side, see all my comments above.
on the negative side, as I mentioned to Anu, some recent speculation that the UK might remain in recession longer than other regions. the claimat count change has not levled off, indicated potentially even higher unemployment. As I mention in my weekly briefing:
“By 2010, Britain’s deficit will be much bigger relative to the size of its economy than even the US, and nearly twice as big as the average among G20 nations. The IMF calculates that borrowings will balloon to 11 per cent of gross domestic product by 2010 while those of the US will rise to 8.9 per cent. The G20 average, weighted for the size of its respective economies, will be 6.3 per cent”
Because the $ is also racing to the bottom with its highly inflationary tactics, and the $ is the most sold currency recently according to Bank of NY, Mellon. The GBP/$ might still strengthen over the next month or two. A wild guess might put it at 1.5, and a further drop in the $ might drive it to 1.55- but I am averse to calling it over a short term.
frankly, if you’re just changing say $2,000, a move from 1.44 to 1.5 is only 4%, or $80.
Hi Paul,
I have been reading your comments over the last few weeks with interest and wondered if you could provide YHO on the following. Many if not most recent medium term forecasts I have read are $1.3/4 perhaps down even to $1.2 as the UK’s defecit will be as high as 12% of GDP, UK unemployment over 3m while the US may be out of recession by end of 2009. I ask as I have a large amount of $ which I will need in the UK in the next 6-12 months. Just wondered if you had heard any of these more bearish GBP predictions in the last week or so and what your thoughts were.
Many thanks.
Hi, Could you offer some advice on GBP/AUD? I am moving to Oz and have money from house sale in UK. I need to achieve 2.22$AUD. Do you see this as achievable within the next four months?
Ever hopeful, Yvonne.
Haris,
Bottom line humble opinion first- if you have a large amount (you’re not just planning a holiday!), I think the best thing is not to speculate, but to lock in a range using risk reversals. cheap insurance…
I have indeed heard the bearish calls (including from the IMF), and I believe there’s some truth to them. GBP/$ is going to be really hard to call over 6-12 months. BOTH economies have some serious issues (both just hit -11% budget balance), and as you point out (as I did to Bren), UK may not exit recession as fast.
On the other hand, the US is inflating the $ hugely, raising the deficit by untold amounts, and may be losing reserve currency status. just too many unknowns to risk your exchange.
if you need more info on a Risk Reversal (also known as a Collar) execution, let me know and I”ll post something (enough people are in the same boat I think it would be appropriate content).
hope that helps.
P
Paul,
Many thanks for your comments and would greatly appreciate any info on Risk Reversal execution. I was fortunate to buy these on a forward contract at over 2$ (lucky timing as I don’t know much about this) so I am tempted to take the profit now but, as I don’t actually need the money, would kick myself if it did drop to $1.2ish.
As you mention, both sides have many issues and there’s always the China element… a difficult call. I’ll have a look into RR execution but would welcome your own explanation.
Thanks again.
Hi Haris- here’s my version, but for sure do your own research too!
When you are LONG an underlying and want to limit the extent of your net exposure BOTH up and down, (Fence= Collar= Risk Reversal) open the following two option positions:
long put
short call (note this is a covered call because of your underlying position)
you choose the expiry (same for both) according to your timing needs.
you choose the strikes to set the limits of exposure, as well as the cost of the position. more protection = more money
for example, today the GBP/$ is at 1.4560. the following premiums are for 22 Oct ’09 expiry, and per lot of 10,000 underlying.
case 1) choosing +/- 500 pip positions, you would buy the 1.5 put for $1,026 (premiums as of this writing), and sell the 1.4 call for $1,099 for a net cost of $73 USD. The combination of long underlying, long put and short call creates a net P/L which is very limited up and down.
case 2) if you chose the strikes to be the same as the current spot, you’d have NO P/L at risk as the long put/short call is a synthetic short spot position, but the net premiums would be ($832-$740) = $92 per 10,000.
a picture would be worth another 1000 words, but I don’t know how to post graphics here. if you want me to email you a graphic, pls let me know your email (you can go to my website at 4xtradertools.com to get mine)
hope this helps
Hi,
my familly just moved to live in uk, i am paid in us dollars.
should i transfer my saving from us dollar to british pound now or shall i wait?
as it is a large amount and i feer the pound will get better now after the new decisions that the us made.
Hi,
My family has moved from the UK to Canada, we need to bring our GBP over to Canada within the next few months. It is trading at 1.78 today, should we exchange now or will the pound gain strength again or continue to drop.
Thanks
Is there a thread for EUR/GBP? What are your views on the pair in the coming months?
Predicts from 18 Mar still valid
1.35 still valid in Short Term
Mid/Long term is still slightly bullish GBP
Dan – re CAN:GBP – Dont expect a lot more downside that what we are seeing now (mid/high 1.7) . Risk reward mid/long term is against Loonie although further downside short term is possible
Dailys still really bearish with a trendline at 1.3815
Am waiting for break of 1.41 before entering short or long – if 1.41 holds then will be going long for retrace to 1.48 area if 1.41 breaks than contiuned down to 1.38 and possible onto 1.35
Trading with small lots and wide SL’s – expect movement to be wild this week and dictated by events (G7,G20 speeches, US auto speech, Trichet speak tomorrow if you follow EUR) rather than technicals/fundmentals
Any inputs on expected GBP – INR forex movement in April 2009? I want to convert my GBP savings into Rs. and want to understand if GBP will aprreciate in near future?
Actually i agree w most of u that GBP may move up to 1.50. I have a lot of AUD on hand and tot of buying GBPAUD at 2.05 or lower.
Sunitha – do not trade INR and have not insight or views on GBP/INR
In general Sterling is over bought and some signs economic positive signs recently may lead to postive movement in short/mid term but i have no strong view either way
Latest target hit – will wait for further direction before make further trades on cable – suspect we will see retract to down for 300 pips or so…..but not predicting this with confidence. Mid term trend is still mildly to bull
above post should read over sold!!
Key levels now at 1.50x and 1.44x
Any break and hold of 1.50x would be very significant. Massive resistance will be experienced at 1.50x and break would mean reassessment of positions
Similarly break to down of 1.44x would mean this rally is likely response to events (G20) rather than change in technical/fundamentals and would be back with bearish moves to 1.3x area
Either way – Friday tends to be USD positive, i am out of cable until clear direction after last move. Trading USD/EUR is much easier at the mo
GBP do seem a good buy with AUD at the current price, multi year lows.
I’m moving to Scotland to study next September and by August I’ll have to exchange a large quantity of money from USD to GBP, to pay the fees for tuition and accommodation (I’ll need aroung 25.000 GBP). I’m afraid the exchange currency by mid summer won’t be on my favor, and I had already calculated my budget when the currency was at 1.45. What can I do meanwhile to save some money? Do you recommend this Risk Reversal Execution in my case?? More info please..
Hi,
I am carring eight thousand pound with me when it was 140/= in Pakistani rupees please suggest me something good so I can’t face loss Do I have to wait for long time if yes so please tell me how long will it take to recover else will be better to convert it to some other currency
Regards
Shahzil
Dear friends,
I am an Indian living in Hungary. Hungarian Forint (HUF) exchange rate is currently GBP ~ 325 and Euro ~ 305. Is it better to change HUF now either to Euro or GBP? GBP ~ 75 Indian Rupees (INR) and Euro 67 INR. I can wait until august 2009 for GBP to recover against INR or Euro to rise up. Kindly suggest me which of the currencies I should trade. Thanks in advance, wish u all happiness, peace, and prosperity. Cheers, c ya.
Hi I am an Indian and will be moving to London in August for higher studies. I wish to convert my savings from INR to GBP (aprox. 30 lakh INR). Should I wait till July or should I convert the amount right away?
Short on GBP/USD till 1.44x levels – SL at 1.485
Nearly 300 pips movement in a day again on USD side – Will reassess when we reach 1.45 but suspect strong moves to down to continue.
Hi.. my question is the same as Aby. I will be moving to UK in August and am wodering if I should convert my money from INR to GBP now or wait still July/August. I’m kicking myself for not having done it in Jan when the Pound was around 67 INR.. it around 72 INR now I think.
Very helpful thread by the way! Thanks.
Sang – as i have said before i do not trade INR and do not have any strong opinions either way
General opinion on GBP is it will steadily improve as confidence returns to the equity market and riskier assets become more widely traded. Sterling does have the potential to collapse however i think we will see gradual re-balancing of sterling in the medium to long term.
I would not expect a return to 85-90 INR in the coming months (similarly i would not expect return to £1 = $2) but i would expect potential pullbacks towards the mid/upper 70 range. However this is not the opinion of an expert but more MHO on GBP in general
Hi, I need to convert around 1500 pounds to USD what is the best time to do that? Is there any chance of further drop in pound? do u see any further rise of pound in couple of months?? please advise on this. Thanks in advance…
Hi Kalyan,
All depends on timescales on how long you can wait. Also see Paul’s post re collaring
If you are holding out purely for forex market moves then As posted before $1.44 & 1.50 are massive areas for sterling and these configurations are still valid.
I moved out of cable after last down move stalled (less than 40 pips gained) and have not entered since.
Corp. results are coming out and these could be massive players in the coming weeks for this pair esp. banking sector
Ok gamble time….
I am against the general trend and am short on sterling at 1.4990 level. Targets are 1.4832, 1.4630. SL at 1.5130
If trendlines not broken from 1.354 & 1.411 levels then still expecting mid-term bullishness
This is not a call i am making with a great deal of confidence but GBP has broke 1.50 3 times and fails to hold, so i expect pullback towards up trendline from 1.354
Am expecting big movements in the coming weeks for cable either to up or down…..time to hold onto your hats!!
Other thing of notice was 250 pips rise in sterling even though down went down 1.5% Yesterday
Ok sterling was helped by Wells Fargo & GoldSachs news but still sign of cable moving without influence from DOW. General trend has been for cable to follow or lag slightly behind DOW
Hi Kathy. How will the GBP perform against Indian Rupee in next 2-3 months? Today 1 GBP = 73 INR. I want to transfer some 4k GBP to india. Should i wait for some more time so that GBP will grow and croos 80 mark? or Is this 73 itself is the maximum threshold possible for GBP in 2009? Sprry for asking too specific ques
hi,
i am nadeem, i have 8000 pounds in my bank account, uk .and i want to transfer them to indian currency.i have been observing from last one month,it reached around 73 now.do you think i should wait further,what are the chances of pound going high.
please advice me what shall i do.
Hi, I just wanted to know when would the GBP value reaches its maximum value( greater than 82 INR)? Could anybody know the future in next 4 months?
hi all,
Please can you help me im looking to go to florida with my partner on honeymoon in sept 2009 i will be changing around £2000 to usd what would be a realistic exchange rate to look for in your opinion do you think the pound will get weaker or stronger
Thanks
craig
wow – short on GBP for short term and bearish medium term – 1.35 is still valid – maybe zig-zags along the way. Next support is 1.4110
Hi, the GBP is now 1.45:1 against USD. Do you think the value of the pound will continue to rise or fall? Thank you very much,
Isa XXX
kindly what is the forecast of GBP/ pak RUPEE
I intend transferring a large amount of GBP to INR and can wait for a max of three months. May I know what rate I can expect, approximately and when ?
Also, pls let me know if the present is the right time
I have a large amount in U.A.E Dirham (AED) as i currently reside in dubai. I have toyed with the idea of buying sterling since it sunk from 6.8 to the pound last year down to 5.09. Its now fluxuated violently between 5.28 and 5.35 before hitting 5.53 today. Should i cash it into sterling or do you think will there be an up and coming rise in the strength of the UAE dirham (pegged to the greenback) or a forcatsed decline of the pound?
Hi there, I am an Australian living in Scotland earning GBP but wanting to send money home regularly, I have watched the AUD gain strength against the GBP and am losing more money by holding off. Should I have faith in STIRLING and still take your advice about waiting till the end of 2009. Thank you for your time.
Hello,
Is the AUD likely to fall against the GBP in the near future? Would you advise against transferring GBP to AUD at the moment due to the strength of the AUD? Or will it only get stronger?
hi, does anyone know what the GBP/USD forecast will be during early June 2009? As i have booked a holiday to New York and i’m finding it very difficult to accept the low rate compared to mid 2008 rate.
hi, does anyone know what the GBP/USD forecast will be during early June 2009? As i have booked a holiday to New York and i’m finding it very difficult to accept the low rate compared to mid 2008 rate.
I have some GBP which I need to transfer to AUD. When do you think the pound will recover against the Australian Dollar?? Middle of 2009???
wow, I just looked at a chart, and this is abut a 10 yr low.
alas, the fundamentals of AUD vs GBP don’t really foretell an improvement.
UK is running horrible deficits, sovereign CDS rates as bad as Italy, futures running mostly short, 25 Delta risk reversals negative. BoE just lowered its estimates from just 3 months ago.
aus, on the other hand, have positive CPI, improving current acct balance, a high central bank rate (relatively speaking, futures are long. It does have a declining budget balance, but the consensus is Asia will recover first, and Oz will benefit most.
if risk aversion returns, both will suffer, but I think UK more based on its dependence on financials.
Don’t hold your breath for an improvement anytime soon, IMHO
Please, please advise – I have about $17000 USD that I need to bring to the UK. Should I do it now or wait a while for a better rate?
Thanks…
I owe debts that MUST be paid in the USA . If I move to the UK, does anyone have any thoughts as to what the exchange rate might look like over the next 2 years or so?
Thanks
Hi All,
This is a wonderful and informative blog.
Need some advice. I need to convert 5000 USD to GBP and 200000 INR to GBP.
I have a time period of 1 year. When shall I convert?
Regards,
Ann
Hi All,
I have about $600,000 which i want to convert to GBP as I am planning to retire to the UK. I am in no rush to convert it…Just wanted to know when the best time is as the exchange rate is about 1.57 today.
NO ONE KNOWS THE FUTURE………….BUT some have the experience to take a GOOD guess !
Going to Scotland the 4th of June 2009. Watching my USD get smaller the last few days. How long shound I wait before exchanging? USD to GBP. HELP!!!
I’m in a similar predicament to that of a previous poster! I am moving from California to London in the fall to begin a Masters program and had calculated tuition & living fees at a rate of $1.45. As I have been watching it over the last few days it has continued to rise significantly! Should I wait on paying tuition to see if it becomes more favorable to the US again or is the rate going to continue to go up? It’s about 26,000 GBP I had calculated so the fluctuations are killing me! Please email me if you have any advice! Thank you
It seems British Pound is getting stronger again. I think end of the summer we will see another little fall but then go forward again.
hi can any one tell me what the gbp usd exchange rate will be for september 2009 please
Where do we see the GBP in 3 months and 6 months from now – are we looking at the 80’s again …
I’m going through exactly the same issue as Dave above – I’m studying in the US this autumn and have £50k to convert to $. I’m tempted to move now and lock in the gains – but a move say to £:$ to 1.75 would mean an extra $7.5k….and insurance/forex options seems very complicated!
Can u please tell me what your predictions or forecasts are for june/july 2009 GBP to USD currency? thank you
Hi,
I could see many are asking questions about GBP growth in near future.
Is there someone who can give expert views?
I am also traveling in the same boat like others. Need to convert some money to GBP.
Please educate and help us when is the right time to buy GBP.
Awaiting responses !!
Thanks
Amaresh
What’s your forecast for the Sterling against the Ringgit Malaysia.
Can somebody suggest on the forcast of USD to INR in month of July & August2009? Is it good to convert USD to INR in July or are there any chances that INR go do 50 for a USD in month of August?
I am not sure if such forcast exist.
hi
I would like to buy GBP by the end of the august 09 in term of Indian ruppes can u please tell will GBP will fall down in coming two months any rough idea please let me know
thanks
I see there are a lot of questions on here but very little experts with the answers.
I am going to Florida in Oct 2009 and wondered how pound/dollar currencies are forecasted for the end of the summer?
Expert opinions are welcome 😉
Thanks
Mark – http://www.free-console.com
Hi
does anyone know where the Pound is heading in relation to the EURO over the next 6-9 months ? 1GBP = 1.17EUR today. Are we looking at an appreciation of the pound and if so what can we realistically expect ?
thanks
DM
There is scope for GBP/USD to hit 1.70 over the next few months.
Thanks for the reply Kathy
What makes you say this btw ?
Regards
Mark – http://www.free-console.com
What about the GBP versus EUR ?
hi, i am going to the usa in april 2010.what rate do you think i should take between now and next april. i thought the highest might be 1.70. regards peter
Hi,
I am going to the USA in mid August and will be there until the end of September.
Could you let me know what your advice would be on whether to change GBP to USD now or wait?
The rate seemed to be on the up but is now dropping back down again.
Thanks,
Gary
Hi im buying a property in euros in September, my mony is at present in pounds. Will the pound recover more buy September ?
what do you see happening with the gbp/aud and the gbp/usd in the coming weeks
regards mike
Hi,
Do you think the Gbp will get stronger than €1.17 Euro over the next 12 months?? I’ve been offered a fixed rate of €1.17/£1 over 12 months or go with the rate on the day, What do you think??
Should I go safe or take a gamble?? I’m paid in sterling than converted to Euro.
GBP likely to outperform EUR in the next 12 months since Eurozone economy is expected to contract in 2010 while UK economy is expected to expand.
Do you think the GBP will get stronger in August 2009? Thanks
what is the expected rate of pound vs Pakistani rupeese in the next 3 month.
can anybody comment on that plz.
other forecast sites shows a decline in september than a rise in December.
what u think ??
Hi. I’ve been watching the exchange rate for GBP to Euro over the last month or so and it seems to be very steadily rising. Do you foresee this continuing or should I buy my currency now?
i want to convert INR to GBP before the end of september. do u see the GBP falling against INR or will it appreciate. when would be a good time to convert?
Do you think GBP to INR will cross 85 in this year 2009, provide me when its likely to happen.
Hi, I have 8000 GBP. I have been waiting for GBP to cross 82 since Jan, 09. Can you pls sugesst if I should not anymore and get it converted to INR in Aug? Are there any chances of GBP value corssing 82INR in near future? Thx for your time.
Hi Kathy, I have just recently discovered this website and have found the discussions very useful. I have bought a property in London and would be buying GBP ( with Ringgit ) from now till Nov 08. How do you see the performance of the ringgit against GBP in the last quarter of 09 ? Many thanks.
Hi, enjoyed reading the posts here Kathy. I have just sold property in Australia and have access to about 100,000 AUD. I am now living in the UK. I have watched the rates go from .48 to 509 in a matter of weeks. What are your long term predictions? Do you see it going to close to 0.60 this year?
I dont need to money urgently.
Thanks
Do you think Pound will ever reach 2 against USD in the next one year?
Nick,
I’m not an expert, but I am pretty much in the reverse situation to you…. and very envious that you’ve got oz dollars that you want to change to pounds.
If I was you I would change them now. Most of the forecasts I’ve read say that the pound will start to gain back ground on the aud soon. You have pretty much got the best exchange rate in the last 6 years at the moment. So i’d take it.
I’ll be hanging on to my GBP for a few months yet waiting for the expected rebound of the GBP.
Hi Kathy,
I work in the UK and am saving for a home in New Zealand. Traditionally £GBP1 = $NZD 2.70, but this year that has eroded to around $NZD2.38 as NZ leaves recession. Do you see this erosion continuing – or should I hold back on transferring money to NZ and wait for an improvement?
Days of $2 a pound are long gone – we are seeing movements on back of risk appetite rather than fundamentals.
Fundamentals are negative for GBP with massive borrowing and public debt expecting to reach nearly 100% GDP in the next few years – once prices move on fundamentals and risk appetite subsides we will see major pullbacks. The BoE probably isn’t done with QE either although it is playing “wait and see” at the moment.
I feel the equity rally is overdone and will need correction, this could come with 3rd quarter and final year earnings as job losses take a hold in the ‘real’ economy and credit still not readily available – all of the above will be dollar+.
Cable is also over bought and this is a lagging indicator that will correct in the medium term.
I think we will see yearly high in or around 30TH Sept. Expect up cable till mid next week then pull back before test of yearly high
Guys I am living in Dubai and have been offered an interest rate of 5% at ADCB bank on 365K sterling. The risk for me is that it has to be changed into Dirhams which is pegged to the US dollar. Is this a wise move, it is a 12mth fixed term account and I’ll want to change back to sterling at the end of this period, the returns are good but gains could be wiped out should the sterling grow in value as a currency. IS this likely, any help greatly appreciated.
I have some GBP which I need to transfer to AUD. When do you think the pound will recover against the Australian Dollar?? End of 2009???
I have some GBP which I need to transfer to AUD. When do you think the pound will recover against the Australian Dollar?? I looked today and it’s at $1.86 the lowest it’s ever been. When will GBP recover, will GBP recover????
What do you think will happen to GBP against the JPY i highly appreciate some thoughts!!?
Hi everyone,
I am a bit concerned about this rapid decline of GBP in front of EUR. Can you send me some thoughts refer to the next 3 months exchange rate evolution ?
Thanks,
John
Hi,
Today i.e. 6 th oct 09 the INR/GBP is 75.Can any body let me know will this decline in the exchange rate will still continue if yes then till which month of 09.
Like the above posts I am also keen to find out expected movement with AUD and GBP as I have money over there I would love to transfer to buy a house in oz.
Also the interest rates there are so bad you get basically no bank interest.
Any ideas for getting good interest rates in the uk?
would there be any advantage to converting GBP to another currency before AUD?
#Justin
I’m afraid GBP will never ever recover…
Keep falling please!
im afraid, again its going up, plz fall down
i believe that without two consecutive quarters of negative GDP growth, the UK economy is not technically in a recession but that should change in the first quarter of 2010, when the 2009 Q4 GDP numbers are released. Growth has been slowing materially and the weakness is reflected in the British pound. GDP growth fell by 0.6 percent in the third quarter, the largest decline in 18 years. The housing market and the financial sector have been the engine of growth in UK for the past few years and both blew up in 2008. Unfortunately the worst is probably not over for the 2 key components of the UK economy, particularly following the Bernie Madoff’s Ponzi scheme. In addition to losses suffered from the subprime mortgage crisis, many large hedge funds and European banks invested with Madoff’s. In 2009, they will be forced to write down those losses and deal with what could be pretty severe consequences for the financial sector as a whole. With the financial and housing market sectors expected to remain weak in the first half of 2009 and layoffs predicted to rise, GDP growth could fall as much as 2 percent next year. Although we believe that the country could be one of the first to recovery from the global economic downturn, this will not before more pain is felt in the UK economy. The severity of the UK recession will be largely dependent upon how quickly the credit markets are restored in 2009
can anyone forecast cable movement in the next ten days? will sterling drop again? many thanks
Kathy, do you think the exchange rate for GBP to USD will be better in December or would you advice to buy now if one is travelling to the US in December or wait until December?
Does anyone have a clue as to whether the pound will recover against the NZD and AUD? I am just a traveller with not alot of pounds but i want to know if i should wait to convert my pounds to NZDs or just sit on them and wait for a recovery but so far it just keeps getting worse. Im shocked how bad its got
Could you tell me please what the forecast is for Sterling to the Thai Baht. I go to Thailand on 31st October for 1 month. I know the Baht is linked to the US Dollar.
any prediction for GB against Euro
What I meant about the pound against Euro was the outlook for november and coming month. It has lost grounds today and what next?
Is the Australian dollar losing strength on the basis of positive figures? Unemployment figures are lower, growth is positive, interest rates have been hiked but .25 yet the dollar is lower against the pound? Can someone explain factors for downward movement?
Can anyone forecast the strength of the pound against the euro between now and the end of the year? Will it reach 1.25 as I read it would in the summer? Thank you
Outlook for GBP is downward in medium and long term especially against EUR:
UK industrial sector is inexistant as compared to euro zone and financial and housing sector are artificially maintained alive by printing hundreds of billions of pounds.
UK budget deficit growing uncontrollably.
Reverse brain drain : smart people are living britain for a number of reasons including higher taxes.
Euro will become the major reserve currency in the world leaving Sterling as a second zone currency.
Parity should be reached before March 2010. After that I won’t be surprised for the pound to be less than 0.80 euro at some point in 2011. Retrospectively 1.12 will be seen as very overvalued level for the pound. Mark my words.
Outlook for GBP is downward in medium and long term especially against EUR:
UK industrial sector is inexistant as compared to euro zone and financial and housing sectors are artificially maintained alive by printing hundreds of billions of pounds.
UK budget deficit growing uncontrollably.
Reverse immigration and reverse brain drain : immigrants and smart money are leaving UK for a number of reasons including lower relative gross wages (because of end of overvaluation of pound), lower savings/interest rates and higher taxes (from 40 to 50% for income tax). This in turns creates an additional depressing effect on UK house prices and tax revenues.
Consumption is reduced to its minimum for retirees living on interest rates as these have been reduced to almost nil.
UK economic growth is based on artificially cheap credit : the system has already imploded but the BoE persists in its errors by now printing hundreds of billions of pounds making the situation even worse in the long term.
Euro will become the major reserve currency in the world leaving Sterling as a second zone currency.
Also watch out for the next bubble burst : commercial real estate : UK will be one of the countries the worst affected.
Parity should be reached before March 2010. After that I won’t be surprised for the pound to be less than 0.80 euro at some point in 2011. Retrospectively 1.12 will be seen as very overvalued level for the pound. Mark my words.
1 gbp= 80 inr is possible at all?
It seems British Pound is getting stronger again after couple of ups and downs.
I am hoping for EUR/GBP to show a deep fall. Is it possible? The economic growth in UK seems to be unstable lately.
Hi,
Could anyone tell me, how will be the trend of GBP Vs INR in near future. Would it reach 1£ = 83 INR, cuz some predictors said that. I would like to know about it, plzz give ur opinion for me. Thanks in advance.
Hi,
Could you please let me know what will be the future forecast like for GBP/INR in Jan-mar 2010.
Will the GBP continue to fall
hey
i m planning to go for my studies to uk at sept 2010
have exchange 1.8 to 2,000,0000 Pak rupees in GBP.what is expected in upcoming months of 2010 n should i exchange them now or wait for few months ?
hi im waiting to move about 10000GBP to canada when do you think best time would be
thanks for any advice
I am in the UK and I’m looking to purchase a house in the US. How do I get the best exchange rate sterling to dollars? Thanks!
If you wait for more 10-25 years you will definitely find INR to be in Power(Hopefully)
Just found this site and need advice on what is going on with the GBP and AUD todays ex for pound to oz dollar is 1.66! My son is in Oz backpacking and I am “helping” him but funds are disappearing fast. Anyone know whats going on and if any recovery in site?
Kathy’s plans for 2009 were pretty good. I’m waiting for 2010 Forex planm which is also gonna be quite nice.
Why does the pound go down against the us dollar when the DOW goes down?
Going to the usa in september should i get my dollars now or wait, its just that the rate seems to be continually falling at the moment?
GDP –> INR 71……!!! any chances of Increase ?? How long to wait for 75 atleast…
BoE might not increase the rate for another 3-4 months atleast….so does this trend continue….
Hi,
Could you please let me know what will be the future forecast like for GBP/INR in Jan-mar 2010?
Will the GBP continue to fall
I have observed, GBP is continuously falling against INR. Today it is 71.5.
Is there any chance of recovery to somewhere near 1 GPB= 80 INR?
Can you foresee the GBP doing any better against the Thai Baht in the next 12 months?,
Since Last June 09 it has fallen from around 57 down to 50 to the pound.
I was getting 63/64 in 2008, When i am in Thailand the rumour is that the government are thinking of devalueing the baht?, is this true? i cannot see this happening when Thai currency is so strong!,
is the pound a bad long term investment??
Not looking all that good right now. Could fall another 3-4% at least
http://www.kathylien.com/site/british-pound/british-pound-5-reasons-why-the-pound-is-being-pounded
Hi
I need to transfer a large sum of money from UK pounds to Indian rupees, I’ve been hoping the rate would improve but it has plummeted on an almost daily basis ( £1 – 72r to £1 – 68r! in a short space of time)
Can you please advise me if this trend will continue or whether I can hope for the rate to improve?
Many thanks.
Hi im from england and ,currently waiting to pay for a large order of materials from china .I will be paying in USD,the exchange rate seems to be getting worse POUNDS/DOLLARS,so costing me more as the days go on, should i exchange now or hold out for the pound to strenghten against the Dollar.
i am considering selling my usa dollars for british pounds at a rate ot 1.49….do you see it dropping any lower this month
what are your predictions for the British pound and the Canadian dollar, will we ever get the 2.3 CAD for £1 again? I have pounds to exchange and am reluctant at the ridiculously low rate of $1.55 to the £1, especially when I used to exchange for $2.3 and above.
Is there any possibility of pound value going up? I’ve to send pounds to India. But if I send now the exchange rate is only £1=INR 68. How long do I’ve to wait for pound to go up again?
Isn’t it a wise decision to invest in UK instead of converting GBP to INR at such a poor exchange rate?
Hi Kathy, Do you see GBP/AUD moving to and beyond 0.65?
Is 0.60+ going to be the long term trend or is this a precursor to the UK Elections?
Any Body can reply or envisage when GBP will be stronger over INR.. todays rate is
1GBP = 66.7 INR.. Please somebody let know,when its going to be up ?
I am moving from Oz to UK in June so interested in the medium term trend of AUD vs GBP, should I be holding off to convert the AUD into GBP ? I would have thought with the comparitive performance of the two countries economies the AUD still has some appreciation relative to GBP ?
Hi
Can you tell me what the euro was against the £ on the 22nd January 2010
Thank you
It was 0.8770
Kathy,
I would appreciate your view on whether the GBP is likely to recover against the AUD in the near future. If so, what is your expected timing of such a recovery coming through in cross rates? We hold GBP but keen to convert to AUD at a better rate.
Many thanks
Kathy – I have the same question as Susan – what is your view on the timing for recovery of GBP against the AUD? Thanks.
Can you enlighten me on the rise or fall of GBR Pound against Indian Rupees.
Can you please enlighten me on the forecast of GBR Pound against INR.
Kathy – I have the same questions as Susan and Amber. I have GBP that I want to transfer to AUD but waiting for a better rate. Can you advise if there is likely to be a recovery and if so when?
Can you please tell weather GBP against INR will increase or fall in the month of June 2010.
hi kathy any chance of recovery of GBP against the AED?can u plz enlighten me.thanks in advance.alen
halo ,I am supposed to pay my university fees and purchase a few for my 6-7 months living expense in pounds, what is your recommendation should I get it exchange now or the rate would be falling more. so that I can take a advantage of buying at a lower rate.
Hi I would like to know the trend of GBP-INR in 2010? when will be the peak? I need to convert 15K of GBP to INR
Hello, I would like to know when you advise exchanging Pounds into Yen, Euros and Dollars, in this month and next, taking into account trends and peaks. Thank you very much, Helen.
Will GBP value raise or fall in the next three months time.
What will be the pound value in Sept 2010?
Hi, I asked my question way back in March but still await a response. Is this website monitored still? I would still be keen to hear your view Kathy……thanks.
At this point, I think max we have another 2 -4 percent decline in GBPAUD
Hi I would like to know the trend of GBP-INR in 2010? when will be the peak?
Dear Kathy,
I’m very lucky to have been reading your article on FX360. You have enlightened us with your fundamental view. I watched you on the CNBC today, hope you have exciting times in Australia.
I have just one concern regarding the GBP/USD stand at the point, you sounds that you were really confident on the emergency budget today. How could you remain bullish where there are austerity and region debt problem? Is today large green candle was the short term sentiment or a start to a long term trend?
It was nice to have chat with you,
Cheers
Dear . Kathy, I have been waiting to transfer AED 125,000 to GBP (UKP22k)recently but have watched in dismay the pound sliding continuously. Should I wait for a bounce back, or do you foresee it continually weekening against UAE Dirham. Should I go go ahead and transfer my money now (which I must do within next 10 days) or wait a bit?
Pls advise ASAP, Thanks
Dear . Kathy, I have been waiting to transfer AED 125,000 to GBP (UKP22k)recently but have watched in dismay the pound sliding continuously. Should I wait for a bounce back, or do you foresee it continually weekening against UAE Dirham. Should I go go ahead and transfer my money now (which I must do within next 10 days) or hold out a bit?
Pls advise ASAP, Thanks
Dear Kathy,
I would also like a response to Adam’s email please?
Wanted to check the forecast , whether the rate of GBP against Indian Rupee will further fall down in next 2 to 3 month.
Will there be any rise in the GBP rate against INR for the next 6 months. Is GBP going to rise or fall against INR by Jan 2011
Any Body can reply when GBP will be stronger over INR.. todays rate is
1GBP = 70 INR.. Please somebody let know,when its going to be up ?
If GBP = EURO ….. Is there any chance that GBP can be up in sep end 2010.