After a brief recovery yesterday which saw GBP/USD climb back above$1.67, the pound suffered yet again as UK posted weaker than forecast inflation figures at 09.30 this morning. The news had an instant impact on Sterling's value with the currency pair dropping from $1.6726 to $1.6644 in a matter minutes. There was more bad news for the pound this afternoon as positive building permit numbers from the U.S. prompted another drop, leaving GBP/USD exchange at a fresh four month low of $1.6610.
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What does the inflation figure mean for my currency purchase?
This mornings inflation reading of 1.6% takes us further away from the Bank of England's target of 2%. The central bank were looking for inflation to reach 2% before they looked at raising interest rates, however, coupled with the drop in wage growth we witnessed last week todays news has led investors and market players to believe we will not see a rate hike this year.
As a result the pound has continued on its downward spiral, losing around 3.5% against the dollar since the beginning of July. If the UK recovery continues to stutter and the U.S. economy continues to play catch up then we are facing the real possibility of GBP/USD exchange rates falling back towards $1.60 over the next few months.
Get in touch.
If you are looking at buying or selling dollars in the coming weeks or 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 the tools to protect you against adverse market movements, secure a rate of exchange for up to two years into the future or target a rate which might not be currently available.
For more information on the types of currency contracts or to find out what rates I can offer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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