Well what can I say, today has seen the UK avoid the dreaded triple-dip recession and on the back of the news we saw a big jump in exchange rates. Since the turn of the year sterling has been in free fall against the dollar falling from $1.63 all the way back to £1.48 but with todays better than forecast GDP results the GBP/USD cross reached its highest levels since the 19th February peaking at $1.5479. For more information on how I can save you money, click here.
At 9.30 this morning the UK Gross Domestic Product (GDP) figures released by the Office of National Statistics (ONS) confirmed that the UK had avoided falling back into another recession after better than expected growth in the first quarter. Initial forecasts had been for the UK economy to grow by only 0.1% but thanks to stronger growth in the service sector and an improvement in oil and gas output, the actual figure came in at 0.3%.
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The news had an instant impact on the currency markets with pound/dollar exchange rates climbing by almost 1% in a matter of seconds. Rates moved from $1.5275 to $1.5425 and reached the high of the day of $1.5479 just after lunch. We could have seen further gains over the duration of the afternoon had it not been for U.S Jobless Claims and Continuing Jobless Claims falling, which pushed cable back down by half a point.
So what will happen now.
The latest figures will lend some much needed support to the UK economy over the coming weeks, although todays numbers were only the first estimate (which could potentially be revised down) it should stop the Bank of England (BoE) looking at further stimulus when they meet at the start of next month. We could however see the BoE start to talk the pound down if rates continue to climb. In the past BoE Governor Mervyn King has acted swiftly to halt any sterling gains as they do not want UK exports to suffer which would potentially slow UK growth.
For the time being though lets enjoy the positive movement (unless you are selling dollars of course!) so if you need to buy or sell dollar in the coming weeks contact me for a free, no obligation consultation by clicking on the link below. I will then be able to talk you through the tools and processes that mean you will be able to not only get an exchange rate that is up to 5% better than you can achieve through your bank but also get the timing right to maximise your currency transfer.
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