April to June 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. Not many UK SMEs can take those risks on the chin and, if you can, then good luck to you.
It’s fair to say that Brexit has been more tumultuous than we had ever imagined. Even the recent extension only prolongs uncertainty – we still don’t know what, if anything, will end up being agreed by 31st October.
Theresa May has the unenviable task of coming up with a deal that the House can agree on and is palatable for the general public. She has resorted to holding cross-party talks with Labour and, although both parties claim they are going well, they have yet to bear fruit. The US-China trade war continues, despite several assurances from President Trump that an agreement is near. It’s looking increasingly doubtful that the ideal scenario for investors and business leaders – complete removal of the tariffs – will come to pass anytime soon.
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.
We hope you enjoy reading it as much as we have enjoyed putting it together.