Exchange rates rise as Sterling hits 7 month high against the US dollar

Sterling climbed to its highest level for more than seven months against the dollar on Thursday, despite Wednesday’s news that the UK has fallen back into a recession. Sterling rose to $1.6208, a level not seen since September last year, before falling back to $1.6186 at the time of writing,

The latest rise for the pound/dollar rates is down to dollar weakness rather than sterling strength. In yesterdays blog I mentioned Fed Chairman Ben Bernanke could leave the door open for further monetary stimulus when he spoke on Wednesday afternoon, this view was justified as Mr Bernanke said that U.S monetary policy was “more or less in the right place” but the central bank would not hesitate to enter into another round of quantitative easing if the economy were to weaken.

It seems the UK has bounced back from yesterday’s unexpected news the economy contracted 0.2% and slipped back into recession. Data released on Thursday morning showed that UK consumer confidence reached a nine-month high in March, according to the Nationwide Building Society, the confidence index increased to 53, up nine points from February.

As the GBP/USD cross continued to gain through the day, I had a number of clients locking into rates to ensure they do not miss out on the current highs. You too can book your rate of exchange using a Forward Contract and protect yourself from any adverse market movements. If you would like to know more about Forward Contract or need to buy or sell U.S dollars you can click here to send me a direct email or complete the contact form on the homepage of the blog.