With no data coming out of the UK today, Sterling was at the mercy of events elsewhere and with nothing to support the pound the GBP/USD cross fell by over half a point. Trade opened this morning with exchange rates sitting at a high of $1.6147 but over the course of the day rates continuously dropped to reach a low of $1.6094.
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What can we expect for Sterling/dollar?
It has been a turbulent few days for GBP/USD, in the last week we have seen rates as low as $1.5869 before recovering to reach $1.6150 (a gain of 1.75%). It looks as though the UK recovery is now firmly on track and with Mark Carney and the Bank of England raising the growth forecast for 2013 and 2014, Sterling was able to find some much needed support.
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If the UK economy continues to perform well there is every chance we could see rates continue to rise which will be great news for anyone looking to purchase dollars, in fact, one of the forecasts I received this morning indicated we could see rates reach $1.64 within the next couple of weeks.
I personally think this is a little unrealistic as even when the U.S were close to reaching their debt ceiling exchange rates only just got over $1.62. If the U.S continues to under perform and the UK has a run of positive data we could see rates push towards a 2013 high but that would only just take us over $1.63.
However, lets not get to carried away! There have been reports in the last week that the U.S Federal Reserve could bring tapering to the table as early as December. If the FED were to look at reducing their extravagant bond buying programme from $85 billion dollars a month, there is every change we will see the dollar quickly strengthen which is likely to bring rates back below $1.60.
I think the next few weeks will continue to be pretty volatile for Sterling and the dollar, so if you have a requirement to buy or sell currency in the coming weeks it is important to know what tools are available to help you make the most form 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 consultation.
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