GBP/USD exchange rates back over $1.60

Good afternoon,

It has been a fairly choppy day for the GBP/USD cross with exchange rates jumping between $1.6050 and $1.6110 throughout today. The good news is the pound has managed to put a temporary halt to its decline against the dollar, gaining over a cent and a half over the past two trading sessions.

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With the dollar gaining over 7% against the pound since July the greenback has been the dominant currency over the past couple of months. The U.S economy has bounced back from a difficult start to the year and with the U.S Federal in the processing of winding up their stimulus package the dollar has been on the march against a number of currencies.

After falling from $1.72 GBP/USD is now close to a one year low. While EUR/USD has dropped by nearly 10% since May leaving the currency pair at its lowest level for nearly two years, so if the dollar maintains its current position it seems set to be the currency of choice for 2014.

What could move rates in the coming days?

Investors and market players will be keeping a close on proceedings tomorrow as there are a number of key releases and speeches. The Bank of England will announce their latest interest rate decision followed by a Statement by Governor Mark Carney. There is also a speech from the European Central Bank President Mario Draghi and with the Eurozone struggling the pound and dollar could be set to for further gains.

We will also hear from Federal Reserve Governors Daniel Tarullo and Stanley Fischer which could cause some volatility in as FOMC engagements are often used to drop hints regarding future monetary policies.

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