Friday, 11 November 2016

Why is the pound going up against the dollar?

What a forty-eight hours it has been for the GBP/USD cross. Sterling is surging across the board, with the pound currently sitting at a fresh five week high against the U.S. dollar.

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The currency pair is currently trading at $1.2660, a level not witnessed since before the flash crash at the start of October. The gains the pound has made across the board over the past two days is nothing short of remarkable, especially when you consider the uncertainty that has been surrounding the UK and its exit from the European Union.

Since Wednesday morning the GBP/USD cross has risen over two per cent and now means purchasing $300,000 is over £5,000 cheaper than it was two days ago.

GBP/USD two day graph

Why has the pound risen? 

I haven't been able to say this for months, but it is actually down to sterling strength. As you all know the pound has taken a beating since the referendum result back in June, as investors have been betting against the pound and selling Sterling over the uncertainty of the long term future of the UK economy.

However, we are now starting to see those same investors reverse their positions against the pound and it is giving all sterling crosses a huge boost. The concerns over fallout from the U.S. presidential elections appear to be mounting and markets are also starting to focus on the upcoming European political events.

With attention being diverted from the UK and the pound, there is now a real possibility we will see the pound continue to rise over the next couple of weeks.

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As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

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