Foreign currency matters

What factors can affect the Pound on the currency markets?

Posted by Barbara Sutton

Moneycorp

Wed 20th, May

If your company is involved in foreign exchange transactions, you will know that the more help you get the more profit you can make.

It is important to understand that all currencies can be affected by the same underlying economic factors, which are:

 Monetary Policy

 Inflation

 Confidence & Sentiment

 Growth

Using these 4 general factors above you can start to make an informed evaluation of the strength or weakness of a currency and what direction that currency is likely to move, up or down. Using GBP as an example.

Monetary Policy: The Bank of England (BOE) will increase or decrease interest rates to control inflation. If there is low inflation (growth in the economy is shrinking) they will lower interest rates to stimulate growth resulting in cheaper loans and people start spending etc. If on the other hand inflation is too high, the BOE will raise interest rates to bring inflation back down to the 2% BOE target. When interest rates rise the GBP exchange rate will rise, and vice versa, any decisions on interest rates by the BOE can and in most cases will affect the Pound.

Inflation: Inflation plays a crucial role in the value of the Pound. In general, countries with higher inflation compared to that of other countries will see their currency value depreciate. To gauge the levels of inflation in the UK you can follow the Consumer Price Index (CPI) and changes in the prices of goods & services purchased by consumers in a given period, and the Producer’s Price Index (PPI) which shows inflationary changes in raw materials.

Confidence & Sentiment: These are surveys that gauge the market on how the majority of people in the UK are feeling about the economy. Gfk Consumer Confidence and National Consumer Confidence are the two main numbers to review and monitor, more information can be found at:

Growth: The overall level of economic activity in the UK is another key factor that can impact Sterling’s value. The primary measure is Gross Domestic Product (GDP), essentially the value of what the UK produces. Many will supplement this report with more frequent economic indicators such as Retails Sales and the Manufacturing Purchasing Managers Index (PMI) which is an economic indicator derived from monthly surveys of private sector companies. Generally the better a countries GDP figure the stronger its currency will be. Finally it’s good to watch the UK’s Current Account which shows how much the UK is importing (buying) and exporting (selling) and the differences between them. In general a Current Account surplus is positive for GBP, the more money flowing into a currency initiates a rise and a deficit is negative for the Pound for the opposite reason.

During the last UK election in May 2010 the Pound against the US Dollar was at $1.54 on 27th April and dropped to $1.44 just 10 days later. If history repeats itself you can expect there to be some volatility for Sterling against the US Dollar and Euro as well as other currencies before and after the election.

Looking ahead the Pound may have a bumpy ride with the looming general election and a possibility of a hung parliament, continued quantitative easing in Europe and with the added possibility of a Greek exit (Grexit) as well as a number of other factors both known and unknown.

For further information you can get daily and weekly market updates by email, just subscribe here  

 

Moneycorp works in conjunction to the Chamber to help you to save money when involved in Foreign Exchange transactions

Read More
Leave a comment

Comments...

Posted by Sharpblade

Great article that will attract every visitor and reader. Thanks, Admin. ProShow Producer 9 Keygen

Posted by hr

Posted by jay tse

achieved through technical means 'single sign on', 'auto fill account password' and other functions, so that people on any website only need the same password, or even light You can log on to all sites and make it extremely easy. So someone pointed out the problem: put all the passwords together, is not equal to the eggs in a basket? Uh ... theoretically, but these password management services usually do a lot of security work, such as data encryption. But only to reduce the risk is very low, can not completely eliminate data leakage. No, Onelogin went wrong. What happened? The identity management software on the market can be divided into two categories: local storage and cloud storage. Local storage, that is, only provide password management tools, does not provide password management services. Can be understood as only provide the basket to the user to install the eggs, as the user Zapatos Nike Shox put the basket in the home, or on the street, regardless of; cloud storage, is to provide password management tools to provide password management services, not only to the basket to the user, All the baskets are kept in their own safe warehouses (data center servers). Onelogin is the latter, they will be the user's account password and identity information are stored in the data center. But they did not take care of their own warehouse, the results of hackers slipped into their storage of US regional data 'warehouse', stole all the eggs inside the basket. Learned, Onelogin company announced in its announcement: the US data storage area to detect unauthorized access to data. In short, it was found that someone successfully invaded. Although the announcement did not make any clear what data was hacked by hackers, but in their support to the customer page is clearly stated that all stored in the US data center customer data has been stolen. In the message they sent to the user, the user data was stolen, including the ability to moncler outlet decrypt the encrypted data. In other words, hackers not only stole the encrypted data, but also may steal the decryption of the key, all the encryption measures completely invalid. It is understood that Onelogin's main business is to provide enterprises with account Nike Air Max Hyper security services, the database once stolen, means that their business users all the account password are facing a threat. I believe that in the data leak announcement, their corporate customers can not help but jump up and say bad language. Currently, Onelogin has contacted the relevant security companies and law enforcement agencies to deal with the matter urgently and to explore and verify the impact of the incident. Also notify you that all customers reset all passwords. Account management of the contradictions in fact the identity of the unified management of the security disputes and questions have been in. Each site has its own separate account password system, and requires the use of complex passwords, which is simply a torture to the user; how many people face the password canada goose store box crazy? But the account after the reunification, once the account was stolen, all annihilated; all the password on the password manager, once stolen, but also annihilated. Moreover, even without password management software, the same will be a problem. 2016 mobile UGG Orejeras rojo security report shows that more than 70% of Nike Scarpe users in almost all network accounts are using the same user name and password. Is this another form of 'egg in a basket'? And this is the 'hit the library' event the main reason for frequent. If the eggs are in the same basket anyway, the only way is to make the baskets safer and harder to break. Althou

Posted by Grapes Health Benefits

Thanks for sharing better information. Appreciation from Pakistan :)

Post a comment