Firstly let me apologise for not posting on here for the last few days as I took a much needed break from the office. Since my last post sterling has rallied against the dollar to reach its highest levels since 20th February. So far this week we have seen exchange rates peak at $1.5347 largely thanks to some better than expected UK data and the poor U.S jobs data that was released on Friday afternoon. Todays post will take a closer look at the events which have caused the rise for cable.
Last Friday saw the value of the dollar fall as weaker than forecast non-farm jobs data led to sterling gaining over a cent within a couple of hours. It had been predicted that the U.S would create nearly 200,000 jobs in March but the actual figure came in much lower at 88,000.
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There has also been some positive news from the UK in the last couple of days. Recent figures showed that Industrial Production beat expectations and rose by 1% in February and will add to the growing hope that the UK may narrowly miss the dreaded triple-dip recession.
Sterling has now climbed by nearly 1% since Friday afternoon and if the UK does manage to avoid another recession we could see rates climb even higher. We are getting ever closer to the official GDP figures being released and if the news is positive then rates could push back over the $1.55 mark. A positive GDP outcome will also dampen any chance of the Bank of England pumping more money into the economy (for the time being) through their quantitative easing programme and will lend extra support to the value of the pound.
So what if we do head back into recession?
Then I am afraid to say we will probably see the pound fall against a number of currencies not only the dollar. It was only a few weeks ago that we witnessed exchange rates fall back towards $1.48 and if another recession is confirmed it is likely we will see that level of trading again. One of the broker forecast that I receive on a daily basis are still predicting that we will see rates hit $1.47 within the next six months and another recession could well see those forecasts revised even lower.
So if you need to buy or sell dollars in the coming months knowing what options in the currency markets are available could prove vital. By using the link below and completing the contact form, not only can I help you get some of the best exchange rates but can also help to get the timing right on your currency transfer to protect you from any adverse market movements.
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