Sterling/dollar exchange rates continued there recent trend by falling on Friday and over the weekend. Trade opened this morning (Monday) with the GBP/USD cross at $1.5345 the lowest we have seen rates since the 5th June and now means Sterling has lost nearly four cents against the greenback in just over a week. To put the decline in exchange rates into monetary terms a £200,000 trade into dollars today will now see you receive almost $8,000 less compared to the same trade booked last week. For more information on live exchange rates click here.
It has been a quite start to the week with no data releases coming out of the UK but that did not stop the pound clawing back some of the ground it has lost over the last few days, with markets continuing react to the FED's announcement last week and the UK and China agreeing a currency swap deal. Over the course of trading today we have seen Sterling climb against a number of currencies and against the dollar rates have moved from the low of $1.5345 (mentioned above) to break back through $1.54.
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In my role of a currency broker I am often asked where I think rates will be in the future and my answer is always the same, it is almost impossible to predict which way the FX markets will move especially when it comes to the U.S dollar. Over the next few months we could see the U.S Federal Reserve reduce the amount of money they are pumping into the U.S economy to stimulate growth and if that happens we can expect the dollar to strengthen and GBP/USD exchange to rates to fall.
There has also been a lot of talk recently that the incoming Bank of England Governor Mark Carney will look to devalue the pound when he takes over from Sir Mervyn King, but with the UK economy looking like it is on the road to recovery I think Mr Carney will have a tough time convincing the other BoE policy makers. If the UK economy continues to post better results (like we saw last week with the UK retail figures) it will only add to strength to the pound and could push GBP/USD exchange rates back towards $1.60.
Although I cannot predict where the market will be in three months time, one thing I can offer is a range of currency contracts to either target a rate that is not currently available or protect you against any adverse market movements. If you need to buy or sell dollars in the coming weeks and what to ensure you are making the most of your currency transfer then use the link below and complete the contact form for a free, no-obligation consultation.
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