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At the time of writing the currency pair is only two pips away from the high we witnessed early yesterday afternoon and leaves the pound trading at its highest level against the dollar since the 6th October.
GBP/USD graph
Could the pound keep on rising?
Later on today the U.S. will publish their latest Non-Farm Payroll job numbers and the data usually causes some heightened volatility for the dollar. The number of jobs created can differ massively from the predicted level and if we see a weaker reading this afternoon we could see the GBP/USD cross break through $1.25.
We also have to remember the U.S. presidential election is taking place next week and markets are anticipating some big swings for the greenback. Rumours are starting to circulate that if Donald Trump wins the election it could have a negative impact on the value of the dollar. With polls suggesting Trump is clawing his way back into the election race, investors have already started to dump the dollar over fears his victory could delay the Federal Reserve raising interest rates in December.
For the first time in months, the short-term forecasts for GBP/USD are looking a little rosier, if the pair can break and hold above $1.25 this afternoon it will give the pound a foundation to rise even further as the election approaches.
Don't get carried away.
Although the pound could rise in the short-term, please don't carried away and think this is the start of the GBP/USD cross returning to some kind of normality. As we get closer to the UK government triggering Article 50 and negotiations get underway with the EU, the pound will come back under pressure and we could easily see sterling fall away again.
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