It can be frustrating having to keep up with the latest foreign exchange rate movements when you’re changing up your money, whether for business or pleasure. What if there was an easier way, where you can instead rely on a trusted brokerage to undertake the time-consuming task of monitoring prices. Even better, what if you could receive a guaranteed fixed price that would remain in place for up to a year?

Our latest Foreign Exchange Report will not only provide you the latest insight into the future of the world’s most popular currencies, but also how you could save by securing a fixed exchange rate for up to 12 months with Accendo FX and other ways to avoid currency risk. Read on to find out more!

How fixed prices work

When your daily life relies on exchanging currencies, not knowing what the day to day impact of your expenses can be stressful, to say the least. So why take the added risk of paying your business’ invoices or transferring money abroad at the going market rate, whether attractive or not, when instead you can enjoy the security of Forward Contracts.

Instead of a spot rate, in which you would pay the current market price for a currency transaction regardless of future movements, a forward contract guarantees that the price of the trade is held for a given period for a specific trade value. Dependent on the currency, this can last up to 12 months and, crucially, the price of the forward will not change during this period, irrespective of market movements!

How to secure your rate

Forward contracts can be agreed between your point of contact at Accendo FX and guaranteed with a deposit of up to 5% of the trade’s value. This deposit will then be attributed to the final settlement of the forward when funds are required. The only obligation of a forward contract is that the trade is settled by the agreed upon date, regardless of market movements. See below for an example of forwards!

An example of a forward contract

Perhaps the best possible example of how a forward contract may benefit you in recent memory is Brexit. The surprise result of the EU referendum saw Pound Sterling fall sharply against both the Euro and the US dollar. Should you have used a forward, you may have managed to escape increased costs!

For example, using a forward contract you would have been able to book the purchase of your specified value of Euros before the result of the referendum at around €1.30 per £1. Subsequently, despite the sharp devaluation of Sterling, you would have been access the forward booked trade at the agreed upon value over the predetermined time frame, potentially saving you thousands! Of course, should FX markets move in your favour during that period, you are still obligated to complete the forward contract.

For a look ahead at key upcoming events that could influence foreign exchange markets, and details of how you can avoid further currency risk on popular currency pairings, just turn over the page!

How can you avoid further currency risk?

Working alongside Accendo FX, you can navigate the risks that foreign exchange markets can sometimes throw at an individual or business. Our talented team will not only help you to secure forward contracts that can help alleviate some of the pressures of dealing with FX markets, but will also provide you with timely information regarding potential pivotal events for the currency pairing that affects you.

A common strategy when undertaking a large transaction is to book a chosen percentage of the transaction cost using a forward and then leaving the rest to either a series of spot trades or even further forward trades, should the price move in your favour, effectively raising your average price.

What’s next for Pound Sterling, the Euro and the US dollar?

Politics continues to play a key role in foreign exchange markets, with the most obvious event that will likely influence Sterling pairings being the UK General Election on June 8. The election comes at a crucial time for the UK, as Brexit negotiations are scheduled to begin between UK lawmakers and their European counterparts just weeks after the culmination on the election campaign.

Prime Minister Theresa May’s Conservative Party are looking to increase their parliamentary majority above the current 17 seats and are widely expected to win the election. A landslide victory would offer the PM the potential to pass through Brexit-related policies with greater ease owing to less opposition, potentially offering a stronger negotiating platform against the EU. However, this may also see the possibility of a ‘Hard Brexit’ increase. Alternatively, a surprise win for the Labour Party opposition would likely see the UK undertake a completely different negotiating strategy and maybe even a ‘Soft Brexit’ scenario. Which of these three issues will investors perceive to be the biggest risk for Sterling?

Rapidly approaching on the events calendar is the June meeting of US Federal Reserve policymakers, with markets beginning to price in the impact of a potential rate hike. Fed fund futures are currently pricing in a 97.5% probability that Chair Jane Yellen and the rest of the FOMC will vote to increase the base rate of interest from 0.75% to 1%. Although US macroeconomic data releases in May have not been as strong as in previous months, should the June meeting follow the pattern of the last two interest rate rises in December and March, where both meetings were followed by a post-decision press conference, 14 June – also scheduled to have a presser - may well see another rate hike.

Finally, the presidency of Donald Trump continues to rattle FX markets, with the latest sagas in his unconventional premiership provoking particularly harsh reactions. The firing of FBI Director Comey as the bureau investigates his administration’s possible contact with Russian officials has many crying foul, however he has been quick to rebuke those calls. Furthermore, major US news outlets have reported that Trump himself leaked confidential intelligence to Russian officials. In reaction, the US dollar has fallen to its lowest level since his November election. Will ongoing scandals threaten to send it even lower?

Over the page, our report concludes with analysis of our clients’ top three traded currency pairings, GBP/USD – or ‘cable’ – GBP/EUR and EUR/USD. Which currency pairing are you most affected by?

GBP/USD ‘Cable’

Will Cable return to September highs of $1.34 (+3.8%) or pull back towards 2017 lows of $1.20 (-7.0%)?

• Failed challenge of $1.30 post snap election announcement. Bounce from rising lows support for 2^nd attempt?
• Almost 90% of brokers suggest downside to current price, however recent updates more bullish than previous
• Stochastics recovered from overbought
• Directional Indicators diverging bullishly

Bullish: Citigroup, Target $1.33p, +3.1%, (21 Apr)

Average Target: $1.25, -3.2% (16 May)

Bearish: Scotiabank, Target $1.20, -7.0% (2 May)

N.B. All pricing and consensus data was sourced from Bloomberg on 16 May. Please contact us for a full, up to date rundown.

GBP/EUR

Will GBP/EUR return to highs of €1.205 (+3.4%) or pull back towards 2017 lows of €1.13 (-3.0%)?

• Testing €1.162 rising lows support having rallied to 2017 highs after snap election announcement
• Broker consensus split for GBP/EUR, with 58% expecting downside from current price
• Stochastics turned oversold; momentum turned negative
• Directional Indicators diverging bearishly

Bullish: Morgan Stanley, Target €1.250, +7.3%, (10 April)

Average Target: €1.166, +0.1% (16 May)

Bearish: Banco Santander, Target €1.099, -5.6% (10 Mar)

N.B. All pricing and consensus data was sourced from Bloomberg on 16 May. Please contact us for a full, up to date rundown.

EUR/USD ‘EuroDollar’

Will EUR/USD return to August highs of $1.135 (+2.5%) or pull back towards 2017 lows of $1.035 (-6.5%)?

• Breakout from 12-month falling highs resistance
• Overwhelming 93% of brokers see downside from current price
• Stochastics sharply recovered from oversold; momentum turned positive
• Directional Indicators diverging bullishly

Bullish: Eurobank Cyprus, Target $1.13, +2.0%, (9 May)

Average Target: $1.07, -3.4% (16 May)

Bearish: Morgan Stanley, Target $1.01, -8.8% (10 Apr)

N.B. All pricing and consensus data was sourced from Bloomberg on 16 May. Please contact us for a full, up to date rundown.

Free online quotes and competitive exchange rates

Do you need to exchange currency? You could be being overcharged by thousands of pounds by your bank or bureau de change!

It’s now easier than ever to get bank-beating currency exchange rates that could save you thousands. For too long banks have dominated the FX market to the point where they will simply give you an exchange rate that may as well have been plucked from thin air. The current system is due an overhaul.

The foreign exchange market is always moving. On this premise, a new breed of Currency Exchange specialists is able to offer unparalleled services that will help you by constantly monitoring the market on your behalf. It’s now the norm for customers to expect the support of a knowledgeable and approachable account manager - your eyes and ears in the market - who’s always on hand to talk.

Quite simply, you can get commission free currency exchange at bank-beating rates and free onward transfer to your destination of choice.

Sound too good to be true? To find out how you can get better currency exchange rates and a better service for less register with Accendo FX today.

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