Sterling has continued to surge against the dollar in the last few days and since my last post GBP/USD exchange rates have risen to their highest level since November 2009. When trading opened this morning the GBP/USD cross had climbed to reach $1.6820, a rise of nearly 2.5% in the last seven days. To put the move into monetary terms a £200,000 trade will now see you receive around $7,900 more compared to the same trade last Monday.
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With a the U.S markets closed due to Presidents day and no economic data releases coming out of the UK today was always going to be particularly quite. What has come to light over the past few days is just how well the UK is performing against most of the developed economies. Although the pound has benefitted from a run of strong data releases there also seems to be a renewed confidence about the UK and Sterling and most of the credit should go to Bank of England governor Mark Carney.
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When Mr Carney took over from Sir Mervyn King in July he implemented a forward guidance policy regarding interest rates and the decision meant investors have had a clear picture of what the Bank of England are trying to achieve. It certainly seems to be working and with improving conditions in many of the UK economic sectors the pound has gained over 13% against the dollar since Mr Carney came into power.
Although it has been a quite start to the week in terms of data releases there are a number of key events to look out for which could impact the GBP/USD cross. This week sees the release of the latest UK unemployment figures as well as the minutes from the BoE monetary policy meeting from the start of the month. In the States we will see the latest unemployment claims and building permit numbers as well as hearing from FED Chair Janet Yellen as she testifies on the semi-annual monetary report.
All of the above could cause some movement in the FX market and I will of course keep you updated as the events unfold. In the meantime 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 transfer use the link below or call me directly on 0044 (0) 1442 892 065 for a free no-obligation currency consultation.
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