January to March 2019 Currency Forecasts
In these forecasts:
- Focus on Brexit, eurozone economy and Federal Reserve
- Economic factors to look out for in the UK, US and Europe
- Currency forecasts for GBP/USD, GBP/EUR and EUR/USD
Download the latest currency forecasts
The main aim of our quarterly currency forecasts is to highlight how important currency risk management can be to businesses with foreign currency exposure.
In our years of working in the foreign exchange industry, we have learned that despite what anybody might claim, nobody knows what is going to happen to any given currency pairing from one day to the next. The sad truth is that there is no magic crystal ball to consult; we are often asked what is going to happen to the US dollar six months from now and we hold our hands up – we don’t know and neither does anyone else.
In previous editions of our forecasts, we have been keen to stress just how unreliable they are. However, while that point always bears repeating, it is especially true for this quarter, given how much is up in the air with regards to the Brexit negotiations. Then there is the persistent unreliability of Donald Trump, where nobody can sure what he will do, say or Tweet from one day to the next. Forecasts make for interesting reading, but they can be very dangerous if you make a decision based on them that turns out to be wrong.
That is why we work hard to extol the virtues of our BRS (budget, risk, solution) approach. We believe it is the most effective means of determining each client’s requirements. If you’re budgeted at a specific level and the markets do not move in your favour, your business could be significantly affected. Take the next three months for instance, there is an 26-cent difference between the minimum and maximum GBP/USD rate predictions. Not many UK SMEs can take those types of swings on the chin and, if you can, then good luck to you.
The next couple of months in particular are likely to be extremely volatile as we approach the official date of the UK’s withdrawal from the EU (although there has been recent talk that the deadline could be extended – yet another potential driver of volatility). There could even be a general election which is simply another spanner to add to the burgeoning collection in the works.
Hence our passion for communicating this crucial point: FX should never be seen as a revenue stream, but, if the right strategic approach is taken, it is a means of achieving a definite cash flow.
In addition, you’ll find a summary of the key events throughout 2018, some of the economic factors to watch out for in the UK, Europe and US, forecast charts, major bank currency forecasts for the next 12 months, and some useful resources. Speaking of resources, why not head over to our Treasury Management White Paper page and download that?
We hope you enjoy reading it as much as we have enjoyed putting it together.