It has been a quite start to the week in terms of economic data releases today and the dollar has taken full advantage. GBP/USD exchange rate have dropped back under $1.69 to give dollar sellers a brief respite from gains Sterling has been making over the last few weeks. Since last week GBP/USD has fallen nearly 0.85% as exchange rates move away from the $1.70 mark and there could be further gains for the dollar later this week if Mark Carney decides to weaken the pound.
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Following last weeks comments from ECB President Mario Draghi, the pound has been gaining against the Euro. As I mentioned in my last post the European Central Bank are prepared to look at extra monetary stimulus as early as next month to help support the Eurozone and as a result the euros value has dropped across the board.
How will this impact GBP/USD?
The UKs largest trade partner is the Eurozone and the last thing the Bank of England need at the moment is a strong pound having an adverse affect on UK exports. I would not be surprised if the BoE Governor Mark Carney follows suit and attempts to devalue Sterling when he speaks on Wednesday.
I don't think we will hear Mr Carney talk about extra stimulus for the UK, our economy is performing to well for that kind of measure. If the BoE decide to talk the pound down it will probably come in the shape of an interest rate announcement, any hint of delaying a rise in interest rates could devalue the pound and therefore GBP/USD would come down even further.
I will keep you posted of what happens throughout the week but in the meantime if you have a requirement to buy or sell dollars and want to ensure you are making the most from you currency transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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