The last 48 hours have been fairly volatile, which has seen GBP/USD exchange rates fluctuate by nearly a cent. Since my last post on Monday the pound has almost gone in a full circle, exchange rates moved from Mondays low of $1.6346 to a high of $1.6425 yesterday (Tuesday) before falling back to $1.6329 during trading today (Wednesday).
Todays post will take a quick look at why Sterling could not hold above $1.64 and what the rest of the week could hold for the GBP/USD cross.
For a free currency consultation click here.
Sterling was unable to maintain the gains it made against the dollar on Tuesday following some weaker than forecast UK Services PMI data and some better than expected numbers from the States.
Services PMI plays a major role in the UK economy as it gives a good indication of business conditions which include production, employment, new orders and prices. It was forecast we would see a score of 62.1 but with the actual number only coming in at 60.0 it meant things were not as great as everyone had hoped. The news caused Sterling to weaken almost immediately and after the States produced better than expected non-farm employment change and new home sales figures, GBP/USD fell to its lowest level since the 29th November ($1.6329).
Want to know when you preferred rate is available??? Click here.
The rest of the week is going to be interesting as Thursday and Friday will bring some of the most important reports and data releases for the month of December. The Bank of England will give their latest interest rate and monetary policy decision on tomorrow (Thursday). While across the pond we get the latest non-farm job numbers which nearly always cause some big movements in the FX market.
Rate Forecast
Now and again I like to keep you informed with what some of my brokers are thinking. This morning I received a very interesting email with a revised forecast. It was predicting GBP/USD exchange rates will be as low as $1.52 within the next 12 months.
This may seem a little hard to believe at the moment, especially considering how well the UK economy is performing., but what the forecast will be taking into account is the U.S Federal Reserve completely winding up their on-going stimulus package.
The dollar has lost a lot of ground against the pound and euro during 2013 but if the FED do start to cut back in the coming months should start to see the dollar recover, which in turn will see GBP/USD and EUR/USD rates start to retract.
If you are thinking of buying or selling dollars over the next few months and want to ensure you are making the most from you transfer, I have a number of tools available which can help. I can look at holding a current rate of exchange for up to two years or help you target a rate which might not be currently available. For more information use the link below and complete the contact form or call me directly on 01442 892 065 for a free, no-obligation consultation.
Click here to complete the contact form.
