GBP/USD exchange rates heads back towards $1.30

The pound rose almost two cents against the dollar today, with the GBP/USD cross rising from $1.2797 to $1.2969 and leaves the currency pair at its highest level since the 25th May.

For the best dollar exchange rates click here.

Sterling rose across the board as a result of comments made by Bank of England (BoE) Governor Mark Carney this afternoon.

His comments related to a potential interest rate hike in the UK and an apparent change in stance from the BoE Chief. Only last week Mr Carney poured cold water over the recent Bank of England rate vote (when three members of the policy committee voted in favour of an immediate rise) by saying that now is not the time to start hiking rates.

However, this afternoon Carney said some removal of monetary stimulus could soon become necessary, essentially saying the central bank could soon raise interest rates and the news gave the pound a much needed boost.

GBP/USD graph

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Mixed day for the pound

Today has been a choppy one for the GBP/USD cross, with exchange rates bouncing between $1.2758 and $1.2707.

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Initially the pound started well after the dollar weakened during the Asian trading session, with the currency pair rising around half a cent. The dollar lost ground after expectations of additional rate rises from the Federal Reserve this year have begun to fade.

The pound was unable to hold onto the gains and within a few hours had lost the ground it made this morning. However, Sterling was able to bounce back again after news broke that UK Prime Minister Theresa May had secured a deal with the DUP.

GBP/USD graph

After losing her majority in the UK election earlier this month, todays deal has allowed May to boost her minority government and continue with her Brexit plans.

The deal is also good news for investors as it removes some of the political uncertainty ahead of the Brexit negotiations.

Markets will now be able to focus more clearly on the official divorce talks with the European Union, and if negotiations run smoothly we could see the pound start to rise against the dollar over the coming weeks.

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The pound recovers some ground

Today has seen the pound claw back some ground against the U.S. dollar, with the GBP/USD cross rising over a cent to briefly break the $1.27 barrier.

 

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Sterling lost ground yesterday following Bank of England Governor Mark Carney's speech at Mansion House, when he indicated that "now was not the time to increase interest rates". However the pound rebounded this afternoon after Bank of England Chief Economist Andy Haldane hinted that he could look to vote in favour of a rate hike during the second half of 2017.

Mr Haldane was not one of the three Monetary Policy Committee (MPC) members to vote for an immediate hike last week, but his comments today have given investors extra hope of a rate hike before the end of the year.

GBP/USD graph

Despite Mr Haldane's comments today, in my opinion I think it is unlikely we will see the Bank of England take any action in the near future, and with Brexit negotiations now in full swing, the pound will probably remain under pressure.

With that in mind, the rise we have seen for the pound today could well be temporary and we could easily see GBP/USD drop below $1.25 in the coming weeks.

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The pound continues to lose ground against the dollar

After falling around a cent yesterday, the GBP/USD cross has continued to lose ground this morning following Bank of England Governor Mark Carney's speech at Mansion House.

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With the official Brexit negotiations finally getting underway yesterday, the pound started to fall across the board, as investor appetite for the UK currency weakened due to the uncertainty of Britain's exit from the European Union.

Sterling then dipped suddenly this morning, with the GBP/USD cross losing around three quarters of a cent as Mr Carney stated that the time is not right for an interest rate hike, despite three members of the Monetary Policy Committee (MPC) voting in favour of an increase last week.

GBP/USD graph

What did Carney say?

During his speech Mr Carney said that due to the mixed signals on consumer spending and business investment, and given the subdued inflationary pressures, in particular wage growth, now is not yet the time to begin increasing interest rates.

Carney also highlighted the impact of Brexit on the UK economy is still unclear, and was another reason why he would not consider a rate hike at the moment.

Are you looking to buy or sell dollars?

If you have a requirement to buy or sell dollars in the coming months and are concerned about the impact the Brexit negotiations could have on your transfer, contact us today for a free currency consultation.

As specialists in currency exchange we have a range of tools available to help protect you against adverse market movements, or target a rate that might not be currently available.

We also offer significantly better exchange rates than high street banks offer, meaning you could save thousands on your currency exchange.

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GBP/USD exchange rate update.

A lot has changed since my post yesterday.......

After writing about how the pound had fallen against the dollar following the Federal Reserve's decision to raise interest rates. The pound received a unexpected boost yesterday afternoon as the Bank of England rate votes showed that three of the eight Monetary Policy Committee members had voted in favour of an immediate rate hike.

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The surprise announcement caused the pound to rise across the board, with the GBP/USD cross rising over a cent to hit $1.2792, allowing sterling to claw back most of the ground it lost on Wednesday evening.

GBP/USD graph

 

So far today the pound has been able to hold onto the recent gains, and even manage to briefly break the $1.28 barrier this afternoon. However, the rise we have witnessed over the past twenty-four hours could well be short-lived.


Come Monday morning, focus is sure to turn back to the UK and Brexit with official negotiations due to begin. Investors and market players will be listening closely for any clues to how the divorce talks are proceeding.

Do you need to buy or sell dollars?

If you have a requirement to buy or sell dollars in the coming days and are concerned about the impact the Brexit negotiations could have on your transfer, contact us today for a free currency consultation.

As specialists in currency exchange we have a range of tools available to help protect you against adverse market movements, or target a rate that might not be currently available.

We also offer significantly better exchange rates than high street banks offer, meaning you could save thousands on your currency exchange.

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Why has the pound fallen against the U.S. dollar?

The pound finds itself around a cent lower against the dollar this morning, with the currency pair slipping from $1.2810 to $1.2705.

Sterling has lost ground after the U.S. dollar strengthened overnight following the Federal Reserves (Fed) decision to increase its benchmark interest rate by 0.25 per cent yesterday evening.

For the best dollar exchange rates click here.

As many expected, Fed Chair Janet Yellen announced the U.S. central bank had increased interest rates for the second time this year, with policymakers voting in favour of hiking rates to a range of 1% to 1.25%.

The decision leaves U.S. interest rates at its highest level since 2008, and gives the dollar a much needed boost after it lost ground yesterday afternoon following weaker than forecast inflation and retail sales figures.

GBP/USD graph

Along with the interest rate rise the Fed also announced they would start to look at reducing its $4.2 trillion bond portfolio. The Federal Reserve currently hold $4.2 trillion of mortgage-back securities and Treasury bonds, which were purchased following the financial crisis.

What else could impact the GBP/USD exchange rate today?

This afternoon we will hear from the Bank of England (BoE) and Governor Mark Carney. The BoE are set to announce their latest interest rate decision, monetary policy summary and how the Monetary Policy Committee (MPC) voted.

It is highly unlikely the BoE will take any action today, as they have repeatedly stated they will not look at raising interest rates until after the UK has left the EU.

However, with figures confirming UK inflation had risen to 2.9% earlier in the week, some of the other MPC members could be swayed into voting in favour of a hike.

Over the last few months one member of the MPC (Kristen Forbes) has been voting for an immediate increase, if an extra one or two members now feel the same we could see the pound strengthen in the next couple of hours.

Are you thinking of buying or selling dollars?

If you have a requirement to buy or sell dollars in the coming days and want to ensure you are making the most from your transfer, contact us today for a free currency consultation.

As specialists in currency exchange we have a range of tools available to help protect you against adverse market movements, or target a rate that might not be currently available.

We also offer significantly better exchange rates than high street banks offer, meaning you could save thousands on your currency exchange.

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GBP/USD exchange rate breaks $1.28

This afternoon has seen the pound continue to claw back the ground it lost against the dollar following last week's shock UK election result, with the GBP/USD cross rising back above $1.28.

For the best dollar exchange rates click here.

However, the pound did not start the day well. Figures released this morning showed that wage growth in the UK had dipped in the three months to April, meaning the amount workers are taking home is falling as inflation is rising.

The news caused the pound to lose around half a cent against the dollar, with the currency pair falling from $1.2790 to $1.2740, as you can see from the graph below.

GBP/USD graph

So why did GBP/USD rise?

The rise was actually down to dollar weakness rather than sterling strength. The dollar fell across the board after the U.S posted weaker than forecast inflation and retail sales numbers.

Figures showed that retail sales in May suffered their biggest fall in sixteen months, while consumer prices also unexpectedly dropped.

It meant the pound was able to take full advantage and allowed GBP/USD to hit an intraday high of $1.2815, the highest we have seen since the 8th June.

Do you have a requirement to buy or sell dollars?

If you have an upcoming requirement to buy dollars and want to ensure you are making the most of your transfer, contact me today for a free consultation.

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

A popular tool for clients with an upcoming transfer is a ‘Forward Contract’. This allows you to secure the current exchange rate for up to 2 years, by lodging 10% of the total you need to convert.

This protects you against the rate moving against you, and also allows you to budget effectively.

We also offer significantly better exchange rates than high street banks offer, meaning you could save thousands on your currency exchange.

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