GBP/USD exchange rates reach 3 week high!

Good afternoon,

GBP/USD exchange rates spiked this afternoon to reach the highest level we have seen since the 2nd October. Following the release of the latest U.S. job numbers the dollar quickly lost value pushing cable up by nearly a cent to reach $1.6226, meaning Sterling has now gained around 2% against the dollar since last Wednesday.

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Today was an important day in the U.S. as we finally got to see the job numbers from September, they should have been released at the start of this month but due to the government shutdown the majority of data releases were delayed. The non-farm payroll numbers usually cause some big swings in the FX markets and todays result was no exception.

It had been predicted that 182,000 jobs were created last month but the actual figure (released at 13:30 BST) came in well under the forecast rate, only 148,000 new jobs were created and the result had an immediate impact on the dollars performance (as the graph below shows). In a matter of seconds GBP/USD climbed from $1.6125 to $1.6207 before gradually climbing over the rest of the afternoon.

So what does this mean for the U.S.?

We are still waiting to see what result the shutdown will have on the U.S. economy, this will become clearer over the next few weeks as we start to see the data for October being released. What todays job numbers will do is put any chance of the Federal Reserve cutting back their continuing Quantitative Easing programme in the immediate future on hold. It means the dollar will remain weakened and if the shutdown has had a negative impact on the economy we could see the dollars value depreciate even further.

Over the next few months there are going to be some major announcements in the States, so the volatility we have seen in recent weeks is sure to continue. As I have already mentioned we will start to see the results of the shutdown, Ben Bernanke is stepping down as FED chairman with Janet Yellen ready to take over and lets not forget that the deal to raise the U.S. debt ceiling was only a temporary one and could well lead to another stand-off between the Democrats and Republicans.

If you have a requirement to buy or sell dollars in the coming weeks or months and are worried about what will happen with exchange rates, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation currency consultation.

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Sterling suffers as potential agreement is reached by U.S.

Good afternoon,

GBP/USD exchange rates have fallen almost a cent and a half this afternoon as news broke that the U.S. government shutdown is about to come to an end. There was also more positive news that a temporary increase to the U.S. debt ceiling has been agreed until early February, wiping out any chance the States will default on their repayments.

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The day had started in a positive fashion for Sterling as UK unemployment figures released at 09:30 (BST) showed the number of people out of work had fallen by 18,000 compared to the previous month. The data had an immediate impact on exchange rates with the GBP/USD cross pushing up to $1.6045, however, the gains were extremely short-lived as the news of the breakthrough over in the States meant the dollar quickly gained momentum causing exchange rates to plummet back down to $1.5896.

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At the time of writing this post we are still waiting for the official report but if the deal between the Democrats and Republications is confirmed we could well see rates fall even further. If what is being said is true I would not be surprised to see rates fall back below $1.57 by tomorrow morning.

I will give you an update in the morning, as soon as  I have all the relevant information but in the meantime if you would like to discuss the different options available to help make the most from your currency transaction please use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.

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GBP/USD exchange rates break $1.60

Good afternoon,

Sterling managed to climb against the dollar today as a cloud of uncertainty still hovers over the U.S economy. With only three days until the United States reach their debt ceiling GBP/USD exchange rates rose by over half a cent to once again break through the $1.60 barrier, the pound/dollar cross jumped from a low of $1.5956 to reach a high of $1.6014 as market players become increasingly concerned that a U.S. default may be on the cards.

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U.S. government have been is talks over the weekend to try and bring an end to the two financial crises the country is currently facing and although there were signs of an agreement being reached, it seems the Republicans and Democrats are still some way off any kind of agreement.

 

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The government has been shutdown since the beginning of the month and the longer it continues the bigger the impact on the U.S. economy, they have already left hundreds of thousands of people on unpaid leave with no sign of when they will be going back to work.

On Thursday the U.S, face reaching their debt ceiling and if government officials cannot agree a temporary increase to what is essentially their overdraft they will face the embarrassing prospect of not being able to meet their financial obligations.

This would have a catastrophic impact on the U.S economy and the value of the greenback. If the worst was to happen the dollar would drop against a basket of the major currencies, potentially push GBP/USD exchange rates well past the highs we saw last year.

If you have a requirement to buy or sell dollars in the coming weeks or months and are concerned about where exchange rates are heading, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.

 

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GBP/USD exchange rates continue to fall

Good afternoon,

It looks like the UK economic recovery may have run out of steam as poor data this morning meant the pound lost even more ground against the dollar over the course of trading today. GBP/USD exchange rates fell from $1.6050 to a low of $1.5921 despite the on-going U.S government shutdown and the possibility of a U.S default.

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So what has caused today's movement?

Over the last couple of months the UK economy has been performing very well which in turn has boosted the pounds performance. It looked as though the UK was turning a corner and the recovery was quickly gaining momentum. However, what we have witnessed over the last week should act as a wakeup call and proves things aren't as rosy as we had all hoped.

This morning saw the release of the latest manufacturing production and industrial production figures, both of which were very disappointing. Manufacturing production had been forecast to rise by 0.3% but came in at -1.2% while industrial production also under performed coming in at -1.1%. The data had an immediate impact on the pound's value, dropping against most of its major counterparts to bring Sterling/dollar to the lowest level we have seen since the 18th September as the graph below shows.

So will rates recover?

As I have said a few times in the past, it is almost impossible to try and predict which way exchange rates will move, especially during this very volatile time. They key factor behind the GBP/USD crosses performance over the next few weeks will depend heavily on what happens in the U.S.

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It seems the shutdown has now been priced into the mid-market price but the longer the government remain at loggerheads the bigger impact it will have in the long term. U.S. economic growth will start be affected which will force the Federal Reserve to continue the QE programme which in turn will continue to dent the dollars value.

There is also every chance the U.S. will reach their debt ceiling in eight days time and if an agreement cannot be reached it will leave the them unable to repay their debts. If that were to happen I can only really see exchange rates going one way and that is up, how far they will go though is anyone's guess!

Obviously this is all ifs and buts and if the shutdown comes to an end and government officials do agree to raise the debt ceiling we could see GBP/USD fall back even further. If you need to buy or sell dollars in the coming weeks and want ensure you are making the most from your transfer use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation currency consultation.

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GBP/USD exchange rate monday update.

Good afternoon,

Sterling managed to climb back towards $1.61 today as the U.S. government shutdown shows no signs of ending. Trading opened with the GBP/USD cross sitting just above $1.6030 but as they day went on exchange rates climbed to reach a high of $1.6096. With no data coming out of the UK, U.S. or Eurozone today the on-going stalemate in the States continued to dominate the news. For more information on live rates of exchange call me directly on 0044 (0) 1442 892 065.

It has been a tricky few days for the pound, with all the problems facing the U.S. at the moment you might of thought the pound would continue to gain strength against the troubled U.S. dollar. However, with the UK construction and service sectors, along with the Halifax Price index failing to impress last week the GBP/USD cross was unable hold above $1.62. Although last weeks numbers weren't a total shambles it does show the UK economy is not out of the woods just yet and should act as reminder not to get too far ahead of ourselves.


Until the shutdown in the U.S. comes to an end questions will continue to be raised about the impact it will have on the U.S. economy. From the news coming out of Washington at the moment it doesn't look like things will be resolved anytime soon and there a growing concerns the shutdown is starting to affect business.

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It is likely the number of people being forced to take unpaid leave will increase over the next few days as more companies face being closed down due to political stubbornness. The more companies that close the bigger the impact on U.S economy, which in turn will de-value the dollar and reduce the chance we will see the U.S Federal Reserve starting to wind down their current QE programme before the end of year.

Everyday that passes also brings us closer to a U.S. default. Government officials have until the 17th October to raise the debt ceiling or face the prospect of not being able to pay their bills. I think it is unlikely that will happen but if it does GBP/USD would quickly rise.

If you have a requirement to buy or sell dollars and are concerned about what is happening with exchange rates at the moment, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free no-obligation consultation.

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GBP/USD exchange rate update

Good afternoon,

Despite the government shutdown the dollar managed to claw back some of the ground it lost to the pound during trading today. Since Tuesday morning the GBP/USD exchange rates have been pushing towards $1.6250 but following some weaker than expected UK data and positive unemployment news from the U.S, rates dipped back below $1.6170.

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With the saga surrounding the U.S continuing and with no end to the shutdown in sight the door was open for the pound to push up even higher today. However, with the Halifax House Price index (which measures the change in price in houses financed by HBOS) and UK Services PMI both missing initial forecasts Sterling was could not even hold its current level and slowly slipped over the course of the morning.

The dollars gains did not stop there as we witnessed another drop for the GBP/USD cross in the afternoon. The U.S weekly unemployment claims ,which show the number of people who have filed for unemployment benefit, came in 7K under the predicted level to bring exchange rates down to the low of the day.

So what is round the corner?

So far the U.S government has only implemented a partial shutdown which has left 700,000 people out of work with little chance of claiming back pay. The longer the shutdown continues the more impact it is going to have on rates of exchange.

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As it stands national parks, tourist sites, government websites, office buildings, have been closed which includes some of the companies that release U.S economic figures. Tomorrow should have seen the release of the non-farm payroll numbers, which normally cause some huge swings for the GBP/USD cross, if the data can not be released it may cause the dollar to weaken even more.

The new budget is not the only issue government officials currently face, there is a potentially more dangerous prospect on the horizon which could leave the U.S unable to meet their financial obligations.

On the 17th October the States will reach their debt limit which will basically leave them with no cash to pay their bills. Unless Congress can reach an agreement to raise the debt ceiling we may see the worlds largest economy default on their payments. This would be catastrophic for the U.S and the dollar and if the worst was to happen we would see the dollars value plummet in a matter of minutes.

If you have a requirement to buy or sell dollars in the coming weeks and want to ensure you are making the most from your currency transaction, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free no-obligation consultation.

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GBP/USD exchange rates reach fresh high

Good morning,

The dollar has lost ground against most of the major currencies this morning after the  U.S government failed to reach an agreement over a new spending plan. U.S officials had until midnight (EST) to thrash out a new budget but failure to do so left the U.S economy facing some very uncertain times. For a free currency consultation click here or call 0044 (0) 1442 892 065

As the news broke the dollar immediately devalued pushing GBP/USD to a 2013 high. Exchange rates rose to $1.6257 the best we have seen the cross since December 2012 and means the pound has gained over 7.5% against the greenback since the start of August. To put the move into perspective a £200,000 trade will now see you receive nearly $23,000 more compared to the same trade booked on the 2nd August.

So what can we expect from the U.S now?

A government shutdown could have some long term effects on the U.S economy, for a start we are still not sure how long the shutdown will last, but the longer it goes on the worse it is going to be. It is rumoured the shut down could last as long as three weeks and if that happens U.S GDP is going to take a bit of a hammering.

If GDP drops (which is more than likely) it will also be bad news for the Federal Reserve as they had been looking for improvements in the economy before they can begin cutting back on their quantitative easing (QE) programme. The longer QE goes on for the harder it will be for FED officials to take the first step which will mean the dollar will take longer to recover.

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It has also left investors airing on the side of caution as it now looks like we will not see any major data releases while the shutdown continues. If investors cannot see how the U.S is performing then they will be forced to put their money elsewhere and with the UK seeming to be on the road to recovery we may see the pound used as a safe-haven which would push GBP/USD exchange rates even higher.

All in all the U.S is now facing a tricky situation and the next few weeks will be critical for the dollars short term future. Lets not forget that on the 17th October the U.S faces reaching it debt ceiling and if that also happens it could leave the U.S unable to meet its financial obligations.

If you need to buy or sell dollars in the coming weeks and want to ensure you are making the most from you transfer, use the link below and complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.

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