After dipping on Tuesday, Sterling fought back against the dollar during trading today to reach a high of $1.6665. The dollar made inroads against most of its major counterparts last night and this morning following reports the U.S. Federal Reserve are set to taper for the third month running. The news left GBP/USD exchange rates floating around $1.6548, a drop of over a cent since my last post on Monday.
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The pound was able to bounce back though as UK unemployment figures released this morning showed the number of people out of work had fallen by 63,000. Coupled with a positive speech from Chancellor George Osborne where he said Britain was recovering and growing at a faster pace than any other major economy (which warranted revising the growth forecast for 2014), the pound was able to shake off the dollars latest advances and climb back to the exact levels we witnessed on Monday afternoon.
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However, lets not get to carried away, there is every chance we will see GBP/USD drop back below $1.66 in the next few hours. As I have already mentioned it is looking highly likely the Fed will announce another cut to their bond buying programme later this afternoon. The on-going stimulus programme being implemented by the Fed currently stands at $65 billion but it looks as though that will be cut by a further $10 billion by the end of today. If that happens the dollar has every chance of strengthening which in turn will drive down GBP/USD exchange rates.
The pound has lost nearly two cents against the dollar in recent weeks and further losses could be on the cards, if Fed Chair Janet Yellen paints a positive picture about the U.S. economy. If what we are led to believe is true and Fed do wind up the stimulus programme by the end of this year Sterling may struggle to sustain levels over $1.60 in the coming months.
For that reason if you are looking to purchase dollars in the coming months and want to ensure you are making the most from your currency transfer it is important to know what options are available. As a specialist currency broker I have a range of tools at my disposal that can protect you against adverse market movements or help target a rate that might not be currently available.
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