What a difference a day makes! The GBP/USD cross has climbed by over 1% in the last 24 hours following the comments made by Bank of England Governor Mark Carney yesterday evening. When the UK markets closed last night Sterling/dollar was sitting at $1.6812 but as Mr Carney began his speech at Manor House cable went on the march reaching a high of $1.6992, the highest we have seen the currency pair since May 6th.
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What did Mr Carney say?
The central bank governor seems to have finally changed his stance regarding interest rates. Over the past few months Mark Carney has been fairly dovish about when a hike to the UK base rate will take place. That all changed last night as Mr Carney admitted that interest rates may rise sooner rather than later, prompting a huge surge in Sterling's value. The pound immediately rose against a number of its major counterparts with GBP/USD getting very close to the $1.70 barrier and GBP/EUR climbing over €1.25 for the first time in over 18 months.
Great news for dollar buyers!
The move in GBP/USD exchange rates is great news for anyone looking to buy the greenback. To put last nights move into monetary terms, £200,000 will now see you achieve an extra $3,500 compared to the same trade secured at 6pm on Thursday evening.
What if I am selling dollars?
If you are selling dollars then the last 24 hours will have come as a bitter blow. The U.S dollar has been performing relatively well in recent weeks. One positive you could take is at least the move is down to Sterling strength rather than dollar weakness. A rate rise in the UK will now be priced into the market, so if the U.S economic recovery continues, the Federal Reserve can continue cutting their current QE package and look to raise rates of their own. If that happens we could start to see the dollar strengthen which in turn could bring GBP/USD down.
If you are looking to buy or sell dollars in the coming weeks or months and want to ensure you are maximising your return, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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