Since my post last week Sterling has clawed back some of the ground it lost against the dollar when the GBP/USD cross fell to its lowest levels in 10 months. The latest Scottish independence polls now show the "No" voters are just ahead which has lent a small amount support to the pound ahead of the final vote on Thursday.
In the space of a week GBP/USD exchange rates have climbed nearly two cents, pushing the mid-market level back towards $1.6250 and if Scotland decides stay as part of the UK on Thursday we may see some investor confidence return to the faltering pound, which could potentially push Sterling/dollar a little higher.
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The most common question I get asked at the moment is will GBP/USD exchange rates get back to the levels we witnessed a couple of months ago when rates were sitting above $1.70. Unfortunately for those of you looking to purchase dollars I don't see this happening in the near future.
There are a number of factors that I think will prevent this, even if the Scots vote "No" on Thursday. It looks as though the Bank of England will not be raising interest rates until next year and with the U.S. Federal Reserve on track to wind up their stimulus package by the end of October it seems there is more scope for the dollar to strengthen ahead of the pound.
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If you have an upcoming requirement to buy dollars in the next few days and are worried about the future value of the pound I have a range of currency options which can help. Forward Contracts, Stop Loss and Limit orders all designed to help reduce your exposure to the ever changing FX markets.
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