November FX Forecast

“Yesterday is not ours to recover, but tomorrow is ours to win or lose” - 36th US President Lyndon B. Johnson By the time this is published, we may have a clear picture of who is going to be residing in the White House for the next few years. What it has once again taught us is that opinion polls analysis do not mean the result will be as easy to predict. Unlike the Presidential opinion polls which at one point seemed to mirror 2016, the FX Forecasts provides a wide range of views that articulates the High, Mean and Low. Challenges still remain surrounding Brexit, COVID 19 and articulating the impact of the US Presidential Election resulting in the divergence in views. We forecast a 1, 3, 6 and 12-month view of GBP/USD, EUR/USD and GBP/EUR rates. Our monthly FX Forecast includes the key dates of scheduled political and economic events that might impact currency markets. Download the PDF report for the details: Infinity_FX Forecast November Infinity International would be happy to offer a complimentary FX review of your current process to offer a fresh perspective and to highlight any areas that could be made more efficient.  If you would like to organise a time for an exploratory conversation, please leave your details below. The review would encapsulate: Strategy ideation to align FX risk management with your business objectives FX volatility assessment to understand the impact of a significant FX rate Credit terms to ensure efficiency for cashflow when hedging currency

2020-11-05T14:33:16+00:00November 5th, 2020|

Focus Remains on Core Matters However ECB and Growth Data Could Change the Outlook

Last week saw Sterling lift following the resumption of UK/EU trade talks, after the early week’s standoff between the two respective trading blocks. Whilst fishing and a level playing field remain sticking points, the objective is to conclude discussions for an emergency EU summit in the middle of November. In the meantime, UK Chancellor Sunak announced a more generous Job Support Scheme starting in November as furlough ends this week. Data from the UK remains mixed with retail sales posting slightly better than expected, but the composite PMI activity showed a slowdown in momentum. However, Brexit trade talks and negative rates continue to dominate newswires. The US election continues to pick up momentum with no real blows landed in the second and final Presidential debate with the US set to head for the polls next Tuesday. Meanwhile, it has been reported that early voting has accounted for nearly a third of the total vote numbers seen in 2016. The week ahead will continue to focus on the progress of the UK/EU trade talks, and the final furlong in the US election, although there are some concerns surrounding current Vice President Pence as members of his entourage have been diagnosed with COVID. The centre of attention for the Eurozone will be the ECB meeting on Thursday, the market is not expecting any stimulus until December so the market will focus on signposting by officials to confirm. Monday German IFO Survey  US New Home Sales Markets will

2020-10-26T15:56:35+00:00October 26th, 2020|

Economic Outlook Q4 2020: Focus on FX Budgeting & Strategies for 2021

This quarter we should see the conclusion of various risk events that have been looming since the turn of the year; namely Brexit UK/EU trade talks and the US Presidential Elections. In a move away from our normal quarterly outlook (after all these are abnormal times), we will be focusing on some of the challenges that businesses are facing as we look towards 2021. We will cover ground on budgeting and deploying a currency strategy that is appropriate for the uncertain future. In this report, we will focus on the action central banks and governments have taken and the resulting effect on volatility. This year has been tough for many businesses, we are all hoping for an improvement in 2021, but in the words of James Cameron: "Hope is not a strategy. Luck is not a factor. Fear is not an option." However, you will also find our regular content where we will highlight some of the key factors that could drive GBP, EUR and USD exchange rates over the coming months as well as displaying institutional forecasts on GBPUSD, GBPEUR and EURUSD. Read the full report: Infinity_Economic Outlook_Q4 2020 Subscribe to receive our updates in your mailbox! This blog post is intended to provide you with information on the services Infinity International Limited (IIFX) offer and should not be interpreted as advice or as a solicitation to offer to buy or sell any currency or as a recommendation to trade. Foreign exchange rates

2020-10-23T15:14:40+00:00October 23rd, 2020|

October FX Forecast

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” - George Soros Following the news that President Trump contracted COVID and the unknown implications and UK/EU trade talks being extended once again, the level of uncertainty has once again increased with some potential unexpected outcomes looming. With so many unknowns that could materialise, we have collected the views of over 40 financial institutions to articulate the high, low and mean forecasts for the next 12 months in an attempt to provide this information to businesses. As you will see, the forecasts still predict a high degree of uncertainty based on the differential. Download the PDF report for the details: Infinity_FX Forecast October Infinity International would be happy to offer a complimentary FX review of your current process to offer a fresh perspective and to highlight any areas that could be made more efficient.  If you would like to organise a time for an exploratory conversation, please leave your details below. The review would encapsulate: Strategy ideation to align FX risk management with your business objectives FX volatility assessment to understand the impact of a significant FX rate Credit terms to ensure efficiency for cashflow when hedging currency (subject to approval) FX pricing to determine your current cost of your current provider vs Infinity International rate Fill out the below form to receive an obligation free FX review: Request a FREE FX

2020-10-14T13:31:35+00:00October 14th, 2020|

Brexit News and COVID Developments Are Likely to Drive Sterling

Last week we saw the focus on the UK with both Brexit, growing COVID concern and the economic support mechanisms being discussed. PM Johnson announced a tightening of restrictions in England, while other parts of the UK also made some changes. Chancellor Sunak followed this up by announcing further support mechanisms to help following the end of the furlough scheme which expires at the end of October. There was also an extension of the VAT cut for the hospitality sector until March, and some changes to the lending schemes for businesses. Meanwhile, news on the Brexit front was more positive despite the Internal Markets Bill. It has been reported that a Brexit deal is in touching distance. There was generally a risk-off tone in the market as COVID cases across Europe continue to soar with Spain and France reporting over 10,000 rolling 7-day averages. Economic data over the past few months have generally pointed to a stronger-than-expected initial rebound in economic activity in the UK, US and the Eurozone. German September IFO survey showed rises in current conditions and expectations, UK GfK consumer confidence measure rose to a six-month high in September and US manufacturing PMI rose. Looking to the week scheduled to see another set of ‘formal’ negotiations between the UK and the EU on the long-run relationship. Some reports this week have pointed to breakthroughs on some key sticking points. However, the situation remains uncertain and the late December deadline for the end of the transition phase

2020-09-29T08:51:02+00:00September 28th, 2020|

Brexit UK-EU Trade Talks: How will sterling be affected?

  History and understanding During the Brexit negotiations in 2017, the UK & EU agreed that trade negotiation could only start after the UK's withdrawal because such negotiations could not happen when the UK still had a veto capability in the EU. For this and other reasons, a transition period after Brexit day (31 January 2020) was defined to allow those negotiations.  The transition period started on the 1st of February 2020 under the withdrawal agreement.   The deadline is the 31st December 2020, a deadline which can be extended for two years, although the British government has declared that it will not apply for any such extension. In 2018 the UK conducted 49% of its trade with the EU, 40% with the Rest of World and 11% with countries that have EU trade agreements.   Figure 1: UK % of Total Trade 2018 Source: Department for International Trade / BBC https://www.bbc.co.uk/news/uk-47213842   Potential scenarios There are various types of deal frameworks available in these negotiations, with the UK said to favour a Canada style arrangement called the Comprehensive Economic and Trade Agreement (CETA). CETA provisionally came into force between the EU and Canada in 2017, this is a free-trade agreement removing 98% of the pre-existing tariffs between the two areas. A CETA agreement between the UK and EU would aim to get rid of most, but not all, tariffs between the UK and the EU, this does not cover anything in services, particularly financial services, which is key to negotiations

2020-09-17T15:22:25+00:00September 17th, 2020|

Will Political Developments Boost Sterling This Week?

Last week Sterling fell to multi-month lows against both the US Dollar and the Euro as Brexit negotiations soured following the wording of the proposed UK Internal Market Bill being released. If passed this will breach the Withdrawal Agreement and break international law. As a result, we saw tensions between the UK and EU intensify. The EU commission stated that the emergency meeting of the UK-EU joint committee had not cleared EU concerns over the Internal Market Bill. It rejected the UK contention that it would protect the Northern Ireland peace agreement and called for measures to be withdrawn by the end of September at the latest, and legal action has been threatened. There was confirmation that the talks would continue this week which provided an element of relief. Meanwhile, the big market event of the week was the ECB meeting. In the week prior, there was concern and speculation over the current strength of the single currency, prompting the currency to weaken in the period leading up to the meeting. The ECB made no changes to interest rates at the policy meeting and there were also no changes to the quantitative easing programme with bond purchases continuing under the PEPP scheme. The forward guidance was unchanged with bond purchases set to continue until at least June 2021 and interest rates remaining extremely low. The economic assessment was slightly more optimistic from ECB President Lagarde. She noted that the deflation risks had declined slightly since June despite the very

2020-09-15T11:51:42+00:00September 14th, 2020|

September 2020 FX Forecast

“I don’t make predictions. I know what I can do, and I try not to think too far ahead.” - Bradley Wiggins Since the delayed Tour De France is taking place we thought it would be appropriate to quote Britain’s first Yellow Jersey winner; 2012, what a great year that was. Fast forward to today, not such a great year, the global economy is still recovering and markets are still split on the direction of this and as a result the residual impact on currency markets. Unlike Sir Bradley, financial institutions are constantly making predictions. We have collected the views of over 40 financial institutions to articulate the high, low and mean forecasts for the next 12 months in an attempt to provide this information to businesses. As you will see, the forecasts still predict a high degree of uncertainty based on the differential. Download the PDF report for the details: September FX Forecast Infinity International would be happy to offer a complimentary FX review of your current process to offer a fresh perspective and to highlight any areas that could be made more efficient.  If you would like to organise a time for an exploratory conversation, please leave your details below. The review would encapsulate: Strategy ideation to align FX risk management with your business objectives FX volatility assessment to understand the impact of a significant FX rate Credit terms to ensure efficiency for cashflow when hedging currency (subject to approval) FX pricing to determine your current cost of your current provider

2020-09-08T16:40:15+00:00September 8th, 2020|

Sentiment Concerns Emerge Ahead of Packed US Calendar Including Virtual Jackson Hole

Last week we saw the US Dollar remain under pressure as economic data raised some question marks about its recovery. A leading indicator for employment, the weekly jobless claims, increased back above a million posting a figure of 1.1m, which was greater than the forecast of 930k. Compounding the recovery question marks was the Philly Fed Manufacturing data which was lower than expected as well as down from previous reports, suggesting that momentum is slowing. Keeping the Dollar under pressure was the sentiment in equity markets, with news from Pfizer that its Covid-19 vaccine was on course for regulatory review in October, has lent support. Sterling had a whipsaw week as both economic data and trade talk news drove the price. Sterling moved lower initially as speculation mounted that tensions between the UK and EU were raised during their trade talks. It was reported in the Financial Times that Brussels has rejected the UK’s opening demands for continued wide-ranging access to the EU for British truckers. During Friday’s press conference, Sterling once again came under pressure following comments from negotiators Michel Barnier and David Frost. The EU negotiator stated that he was "disappointed" and "concerned", whilst UK negotiator David Frost spoke of "little progress". Meanwhile, economic data continues to remain positive for the UK. Retail sales, services and manufacturing data all improved highlighting that the recovery’s momentum is continuing post easing restrictions. It will be interesting to see if the UK can continue this once the government’s schemes end - Furlough and Eat

2020-08-24T12:00:12+00:00August 24th, 2020|

Sterling Remains Supported as UK/EU Trade Negotiations Resume

Last week, we saw Sterling remain resilient despite underlying concerns over employment and being plunged into its deepest recession on record as the coronavirus lockdown saw the economy contract by more than a fifth in Q2. With the furlough scheme coming to an end in October there are obvious concerns. However, the monthly GDP for June, which may be seen as timelier, was higher than expected at 8.7% against 8.1% following the easing in lockdown measures. The market will be keen to see if the UK activity can sustain this momentum in the coming months. In the meantime, the UK confirmed that the next round of Brexit talks will take place in Brussels this week with negotiators. Plans include a dinner on Tuesday and a press conference on Friday, leaving only two full days of talks. This suggests that the potential for any breakthrough in negotiations remains limited. Nevertheless, UK chief negotiator Frost stated that a deal was achievable in September and Irish foreign minister Martin also stated that there was scope to find a landing zone in the negotiations. Elsewhere sentiment remained to the upside as broader economic data saw stocks and commodities climbing, a significant development as the Pound has shown itself to be a 'risk-on' currency. Eurozone industrial production rose strongly for the second straight month in June at 9.1% higher than in May; the largest rise since records began in 1991. In the US, the weekly jobless claims dropped below 1m; the first time since

2020-08-17T10:48:54+00:00August 17th, 2020|