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.
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.
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.
