Today saw the GBP/USD cross drop below $1.41 for the first time since 18th March 2009 hitting a low of $1.4087. After dropping continuously since early December things are not looking great for the pound and with the UK economy coming under pressure there is definitely a chance things could get worse before they get better.
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In the last six weeks the pound has lost nearly 7.5% against the greenback which can make a huge difference to your currency transfer. If we look at the move in monetary terms, converting £250,000 will now see you receive nearly $28,500 less compared to the same trade on 13th December.
Why could things get worse?
With so much uncertainty surrounding the global economy the dollar has strengthened massively over the past couple of months. Coupled with the Federal Reserve rate hike in December it has given investors an extra incentive to head into the U.S. dollar.
Although recent economic numbers suggest the U.S. economy might be slowing, the view within the market is that we will see at least one more rate hike by the Federal Reserve this year which could help strengthen the dollar even more.
With that in mind and the fact Mark Carney poured cold water on the Bank of England raising rates during his speech on Tuesday the door is wide open for the pound to sustain further losses across the board.
I for one would not be surprised if we saw the GBP/USD cross fall below the $1.40 barrier in the next few weeks. There are no positives on the horizon which I think will help the pound out of this current trend and if the currency pair falls into the $1.30's then it could take months before rates recover.
Do you have a dollar requirement?
If you are looking at buying or selling dollars in the coming weeks or months and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation consultation.
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