GBP/USD exchange rate drop to three-week low.

Good afternoon,

GBP/USD exchange rates slipped to a three-week low during today's session as figures this morning confirmed the UK economy only grew 0.3% during the first quarter.

The GBP/USD cross fell from $1.5381 to $1.5264 on the back of the announcement, the lowest we have seen the currency pair since the 7th May.

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Since the UK Election results the pound had been performing reasonably well, however, today's growth figure seems to have removed some of the confidence surrounding the future of the UK economy.

The revised Gross Domestic Product (GDP) figure of 0.3% was largely down to a rise in UK imports and further damages the UK's net trade position.

The UK's trade deficit increased by £3.6bn in the first quarter, which the Office of National Statistics said wiped off 0.9% from the GDP rate.

If exports do not pick up it could continue to effect economic growth, which in turn may hinder the Bank of England raising interest rates anytime soon.

With U.S. Federal Reserve pulling further ahead in the race to raise interest rates the pound could come under increased pressure in the coming months, so if you have an upcoming requirement to buy dollars it is more important than ever to understand what options are available.

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GBP/USD exchange rates fall after poor inflation reading

Good afternoon,

After briefly breaking through $1.58 last week the pound has suffered against the U.S. dollar with GBP/USD exchange rates dropping to $1.5452 during today's session.

The pound fell across the board this morning following the latest UK CPI reading with figures showing that UK inflation has now fallen into a negative state for the first time since 1960.

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However, it is not all doom and gloom for the UK as Bank of England governor Mark Carney still expects the inflation figure to improve and push towards the central bank's target of 2% over the course of the year.

With the current inflation level still seen as only a temporary dip, it shouldn't have much of an impact on investor confidence and if we see some positive numbers from other sectors within the UK, we could easily see the pound recover the ground it has lost over the past few days.

Despite the recent drop for GBP/USD the pound has recovered remarkably well in the last month with rates climbing from $1.45 in April.

In recent weeks most of the gains can be put down to dollar weakness, if the U.S. economy continues to underperform, which in turn pushes back the chances of the Federal Reserve raising interest rates this year I still believe we could see GBP/USD climb back towards the $1.60 mark.

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GBP/USD exchange rates break $1.57

Good afternoon,

Following Fridays surge the pound has continued to rise against the dollar this week with GBP/USD exchange rates breaking through the $1.57 barrier for the first time this year.

Last week's surprise UK Election result is still helping Sterling across the board and with the dollar's value dropping this morning after German Bund yields rose 22 basis points, demand for European currencies seems to be rising.

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GBP/USD exchange rate forecast.

During today's session alone the pound has risen nearly a cent and a half, with GBP/USD climbing from $1.5561 to a high of $1.5707.

We have not seen the currency pair at this level since December 2014 and the turnaround we have seen in the past few weeks has been nothing short of amazing.

Since the 13th April (when GBP/USD was sitting at $1.4577) the pound has gained 7.75% against the dollar and the move looks even more impressive when put into monetary terms.

Converting £200,000 into dollars will now see you receive over $22,600 more compared to the same trade last month and highlights just how important timing can be when it comes to moving money overseas.

A couple of weeks ago I said we would see rates push back above $1.55 and with that rate now in the bag I think there is potential for GBP/USD to go even higher.

If the U.S. economy continues to underperform and talk of a September rate hike is shelved I think there is every chance we could see GBP/USD challenge the $1.60 in the coming weeks.

Contact me today.

If you have a requirement to buy or sell dollars in the coming months and want to ensure you are getting the best rate of exchange, contact me today using the link below or call me directly on 0044 (0) 1442 892 065.

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Election results send the pound soaring

Good morning,

This morning's surprise election result, which has left the Conservatives on the cusp of a majority win, has given the pound a much needed boost following a week of uncertainty.

Prior to this morning's shock announcement GBP/USD exchange rates had slipped over 2.5% since the middle of last week, with the currency pair falling from just shy of $1.55 to 1.5099 on Monday.

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The news that David Cameron would resume his role as Prime Minister for a second term seems to have given investors renewed confidence and pushed the pound up across the board. In a matter of minutes the pound had gained around three cents against the dollar with GBP/USD climbing to a high of $1.5520 in the early hours of this morning.

I am sure we will see some movement over the course of the day as the markets continue to react but as it stands the pound and UK is in a much better position than 24 hours ago.

Shift if focus.

As the dust settles in the UK and the Tories start to celebrate, focus will now return to the U.S and the matter of interest rates.

Over the past few weeks I have mentioned on numerous occasions that the U.S. has been on an awful run in terms of economic data releases. This afternoon all eyes will be on the States again as the U.S release their latest job numbers.

As my regular readers will know the non-farm payroll numbers have the ability to impact the value of the dollar massively. Analysts are predicting that 228K were created last month but as we have seen before this actual figure could be well wide of the mark.

If the jobs reading misses the forecast level the dollar will come under pressure again and I wouldn't be surprised to see GBP/USD back over $1.56 later today.

A weaker jobs number would add to the States recent woes and could dent any chance of rate hike by the Federal Reserve in September, which in turn may weaken the dollar even more.

 

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GBP/USD exchange rates start to recover

Good afternoon,

After weaker than forecast UK manufacturing and construction figures dented Sterling's recent recovery, GBP/USD exchange rates were able to bounce back today after the latest U.S. trade balance figures impacted the value of the dollar.

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What a difference a week makes.

Last week saw the GBP/USD cross sitting just shy of $1.55 but after a run of poor economic data releases from the UK the pound tumbled across the board.

This morning saw GBP/USD exchange rates back down at $1.5093 but after the U.S. trade balance figures showed the trade deficit had risen by 43.1% to $51.4 billion (its highest level since October 2008) the dollar weakened and pushed GBP/USD back towards $1.52.

It seems as though the strong dollar has started to weigh heavily on the U.S. economy and will once again raise questions as to when the Federal Reserve will raise interest rates. With expectations of a rate hike pushed back to September, the next few months will be closely monitored and if the U.S. economy continues to suffer then there is every chance a rate rise will be pushed back even further.

Rocky road ahead for the pound.

With the UK election only days away and no clear winner in sight we could see the pound come under some extra pressure this week. If we are left with a hung parliament, the uncertainty surrounding a potential coalition could see the pounds value severely affected.

If you have an upcoming requirement to buy or sell dollars and want to ensure you are making the most from your transfer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.

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