Following comments this morning from Bank of England (BoE) Governor Mark Carney the pound fell across the board and left the GBP/USD cross at its lowest level since September 2013. During this mornings quarterly inflation report Mr Carney announced the BoE expect inflation in the UK to drop below 1% in the next six months and gave a three year window for inflation to get back to their target level of 2%.
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The news has an immediate impact on the currency markets with GBP/USD falling nearly a cent and half and to leave the currency pair trading at $1.5812 the lowest we have seen exchange rates for well over a year.
Sterling could have suffered from further loses had it not been for some positive news in relation to wage growth and employment numbers in the UK. For the first time in five years growth in pay for the UK workforce overtook inflation and with unemployment down by 115,000 on the previous quarter it may give the BoE the support it needs to justify an interest rate rates at some point next year.
With GBP/USD dropping today it means the pound has now lost around 8% against the dollar in the past few months which is great news for anyone looking to convert dollars back into Sterling. The next few months are going to be very interesting for GBP/USD as investors try to gauge who out of the BoE and Federal Reserve will raise interest rates first.
I am sure we are going to see some swings in the exchange rate until a rate hike is announced, so if you are thinking of buying or selling dollars in the coming months it is important to know what your options are. To ensure you are making the most from your transfer and protecting yourself against adverse market movements, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065 for a free, no-obligation consultation.
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