GBP/USD exchange rates dipped back below $1.60 today as positive news regarding U.S house prices and an increase in safe-haven flows helped strengthen the dollar. When trading opened this morning the mid-market price was hovering just below $1.6050 but with the markets still reacting to the German elections rates quickly moved back below towards the $1.60 mark. For more information on live market prices click here.
With Angela Merkel just missing out on a majority win in the recent German elections which has left the Chancellor needing to form a coalition, it has left a small cloud of uncertainty hanging over the Eurozone's largest economy. Any form of uncertainty, regardless of how small often causes some volatility in the FX markets and this is exactly what we have seen over the last 48 hours. This has lead to investors turning their attention back towards the so called safe-haven currencies and until the coalition is formed we may see safe-haven flows into the U.S help the dollar claw back more of the ground it has lost against the pound in the last couple of weeks.
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There was also more positive news for the U.S this afternoon as house prices increased by 12.4% over the last twelve months, the biggest increase for over seven years! This news saw the dollars value increase which dropped exchange rates to a low of $1.5956 meaning GBP/USD has fallen nearly two cents is just under a week.
With the U.S economy producing some positive figures over the last week, it will not be long until the talk of tapering starts to surface again. Although the U.S Federal Reserve decided against taking any action last week, there are rumours the FED are still looking to reduce the amount of Quantitative Easing before the end of the year. All eyes will now turn to the U.S Job numbers that will be released at the start of October and a positive result could well see the dollar continue strengthen.
If you have a requirement to buy or sell dollars in the coming weeks it is important to know what tools are available to help you make the most from your currency transfer. So if you would like to know what exchange rates I can offer or would like more information on how to protect yourself against adverse market movements, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 (quoting ADM blog) for a free, no-obligation consultation.
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