Sterling hits a four month high against the dollar

Tuesday Morning saw Sterling hit its highest levels against the dollar since November 2011, with the GBP/USD cross briefly reaching $1.5999 before dropping back to the mid $1.59’s during the afternoon.

It was the second day running that the dollar has lost ground against the pound following comments from the Federal Reserve chief Ben Bernanke on Monday.

Mr Bernanke has indicated that more quantitative easing could be on the horizon if the U.S economy continues to come under increasing pressure. Further monetary stimulus would flood the market and make the U.S. dollar cheaper to purchase.

The recent gains made by sterling over the dollar have led some currency strategists to believe that the pound could accelerate beyond the $1.60 barrier. This is good news if you are looking to buy dollars but bad news if you are looking to sell them.

With a black cloud still hovering over the UK economy there are still many people in the market that believe the GBP/USD cross is going to drop back towards $1.50 over the course of the year. If you are selling dollars it is worth considering a Limit Order that will allow you to take advantage if the market moves in your favour.

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. This type of contract is particularly useful when the markets are moving in a positive direction for you. 


If you would like to discuss a Limit Order or the other options available to you click here to send me a direct email or complete the contact form on the homepage of the blog.