Since my last post GBP/USD exchange rates have jumped back over $1.68 reaching a high of $1.6854, the highest we have seen the currency pair nearly four and a half years. Sterling had a strong finish last week following surprisingly better retail figures for March and carried that momentum during trading today.
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The dollar did manage a small rally this afternoon after pending house sales beat expectations by 2.4%. The news lent some extra support to the greenback, pushing GBP/USD back towards $1.6800 but the gains for the dollar could be short lived as all eyes now turn to the UK GDP figures which will be released tomorrow morning at 9.30.
The UK economy has been performing well over the past few months and tomorrows GDP figures will give us the first glimpse of how the UK performed in Q1. There have been hints we could see a strong reading of 0.9% tomorrow and if that is true I would expect to see the pound rise across the board.
A positive reading could see GBP/USD reach a fresh high and I wouldn't be surprised if the currency pair got close to or broke through $1.69. If that were to happen it would be an excellent time to convert Sterling into dollars as rates may not stay at that level for very long.
A couple of weeks ago the Bank of England mentioned they were happy with how the pound was performing and the current level of exchange rates. However, they went on to say that if the pound continued to gain strength they may look to intervene as they do not want British exports to be affected by the rising cost of the pound.
On Wednesday we also hear from the U.S. Federal Reserve and there is a real possibility of further cuts to their stimulus package. Another round of tapering could see the dollar strengthen and quickly erase any gains from the day before.
I will keep you updated with how the next couple of days pan out but in the meantime if you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from you transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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