What a difference a day can make. In my last post I said that things have been quieter for the dollar exchange rate over the last couple of days.
Rates had been sitting around the $1.58 mark at the start of the week, but with the European Central Bank (ECB) announcement on Wednesday that they have provided a further 530bn euros in low interest loan we saw a steady rise for GBP/USD cross. At the time of writing the mid-market rate has risen to $1.5950, this is the highest we have seen rates since November 2011.
This is the second time the ECB have offered low interest loans in the last few months. In December banks from around Europe borrowed 489bn euros and there was no shortage of takers this time round, with a number of British banks confirming that they have taken up the option of cheap borrowing.This helped strengthen the pound on the basis it will help the British banks improve their liquidity.
The loans are also aimed to help the eurozone battle the ongoing debt crisis. As confidence grows investors will leave the safety of the US dollar and return to the UK
This is another indication of just how volatile the markets can be. Last week the interbank was down in the $1.56 region, which means we have seen rates move by nearly 2% in the last seven days. This was good news for clients that had Limit Orders in place.
With a Limit Order you specify the exchange rate you are hoping to achieve, a price that may not be currently available. Your currency will automatically be purchased if the market exceeds this level and you'll get the rate you wanted.
If you need to buy or sell dollars in the coming weeks or would like to discuss a Limit order, you can use the contact form on the blog home page or click here to send me a direct email.
