The GBP/USD cross rose to an eight week high of $1.2614 today, after the U.S. dollar weakened across the board. For the best GBP/USD exchange rates click here.
With Theresa May set to trigger Article 50 on Wednesday we could be set for a volatile few days for the currency pair, but for the time being at least the pound has continued to rise against the dollar and if we take into account today's move the GBP/USD cross has now climbed over 4% in the last two weeks.
GBP/USD graph
Why is the dollar weakening?
The U.S. dollar lost ground today after markets lost faith with President Trump after he failed to deliver his reformed healthcare bill.
With Trump failing with one his main campaign pledges, investors and market players are now concerned the President will also fall short on his promise to increase fiscal spending and cut taxes in order boost growth in the U.S.
The reformed healthcare bill was seen as one of the easiest things for Trump to implement, which doesn't bode well for the rest of his agenda.
What impact could Article 50 have on the pound?
Unfortunately it is a difficult question to answer. Most forecasts are suggesting the pound will lose ground the moment Theresa May invokes Article 50 to begin the official divorce proceedings.
How much ground the pound will lose is impossible to say, as it will depend if markets have already priced Article 50 into the pounds value.
We could easily see GBP/USD fall a couple of per cent if it creates more uncertainty. On the other hand if it is seen as providing clarity if could prevent the pound from falling and Wednesday could be a bit of a non-event.
Do you need to buy or sell dollars?
If you have a requirement to buy or sell dollars in the coming weeks and are worried about the impact Article 50 could have on your transfer, contact me today for a free, no-obligation currency consultation.
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