Good afternoon,
Following the release of the latest FOMC minutes last night GBP/USD exchange rates slipped to a fresh 18 month low this morning of $1.5036. However, the pound finally managed to bring an end to its recent decline against the dollar and managed to break back above $1.51 this afternoon.
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Bank of England keep rates on hold.
As expected the Bank of England kept interest rates at the record low of 0.5%, the level the benchmark rate has been sitting at since 2009. With a slowing economy and the political uncertainty currently facing the UK ahead of this year's elections, a potential interest rate rise from the central bank now seems unlikely to happen in 2015.
The BoE's decision not to raise interest rates is the one of the key reasons behind the pound losing so much ground against the dollar in the last six months. Meanwhile the dollar is benefitting from a buoyant U.S. economy and is currently sitting at a nine year high against most of its major counterparts.
Although last night's FOMC minutes showed a rate rise is unlikely to come before April, there is every chance we will see the Federal Reserve take some action this year. If Fed Chair Janet Yellen drops some positive hints over the next few months about when a rate hike could happen there is every possibility the GBP/USD cross could fall into the mid $1.40's in the not too distant future.
If you have a requirement to buy or sell dollars and want to make the most from your transfer, it is more important than ever to know what options are available to you.
By using the link below to complete the contact or calling me directly on 0044 (0) 1442 892 065, I can talk you through different types of currency contracts which can help protect you against adverse market movements and reducing your exposure to the ever changing FX market.
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