Sterling lost more ground against the dollar today (Friday) to bring an end to a disappointing week. The decline in exchange rates means the pound lost around 1.2% against the greenback since the highs we witnessed at the start of the week.
From Tuesdays high of $1.6463 cable fell to a low of $1.6266 by Friday afternoon, the first time the GBP/USD cross has dipped below $1.63 since 27th November.
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So what does this mean in monetary terms?
To put the move into perspective a £200,000 trade will now see you receive around $3,950 dollars less compared to the same trade secured at Tuesdays high.
Should I wait for the rate to move back up to $1.64?
It is a risky business waiting to see if the markets move in your favour. For those that are thinking of buying dollars and missed the chance to take advantage of the weeks high, it is still an excellent time to think about converting your funds.
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Exchange rates are still 10% higher than earlier in the year and with the increasing prospect that the U.S. Federal Reserve (FED) will start to cut back their stimulus package as early as next week, we could see exchange rates fall even further.
If FED chairman Ben Bernanke does opt to start tapering next week then we should start to see the dollar strengthen as soon as an announcement is made. How far rates would fall would depend how much is trimmed off the current $85 billion per month payment, but if exchange rates are still sitting around their current level we could easily see the cross drop back below $1.60.
If you need to buy or sell dollars in the coming weeks and want to 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 consultation.
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