I said in Mondays post that today had the potential to cause some volatility in the currency markets and that was certainly the case, with the GBP/USD cross falling by over a cent to take the currency pair to its lowest level since April this year.
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After a brief rally this morning, which took Sterling/dollar back above $1.68 the tables quickly turned as comments from Bank of England Governor Mark Carney caused the pound to drop across the board. GBP/USD fell from a high of $1.6827 to a low of $1.6687 which now means the pound has now nearly five cents against the dollar on the last six weeks.
So what did Mark Carney say?
Mr Carney has lowered the Bank of England's forecast for UK wage growth from 2.5% to 1.25% for the current year after figures showed wages grew at their slowest rate since records began in 2001. The move from the central bank has dampened expectations that an interest rate rise will take place this year and left investors looking for other alternatives.
Will rates recover?
After todays comments from Mr Carney it looks unlikely we will see GBP/USD exchange rates push back towards $1.70 in the short term unless something drastic happens to the U.S. economy. However, with U.S economy improving and the Federal Reserves looking to wind up their stimulus programme sometime in October there seems to be more scope for the dollar to strengthen rather than the pound.
Do you need to buy or sell dollars?
If you have a requirement to buy or sell dollars in the coming months and want to ensure you are making the most from your transfer it is vital you know what tools are available. As a specialist currency broker I have a wide range of contracts at my disposal to help protect you against adverse market movements or help target your chosen rate.
For more information on the different types of currency contract or to find out what rates of exchange 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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