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After rising to an eight week high yesterday afternoon of $1.2614, the GBP/USD cross lost ground today after the Federal Reserve promised additional interest rate hikes during 2017.
GBP/USD graph
The comments from the Federal Reserve have helped the dollar recover slightly, and also given investors some much needed confidence following President Trump's failure to push through his new healthcare bill.
Article 50
The Brexit process will finally kick off tomorrow with UK Prime Minister Theresa May set to trigger Article 50 in order to begin the official divorce proceedings with the European Union. Although the Federal Reserve's comments will have been the main reason behind the GBP/USD cross falling today, I do believe some of the loses will be down to investors re-positioning themselves ahead of tomorrow's announcement.
As I mentioned yesterday, some forecasts are suggesting the pound will lose even more ground once Theresa May invokes Article 50, but even though we are now less than a day away, we still don't know how the markets are going to react.
If markets have already priced in Article 50 we may not see much movement in the value of the pound. On the hand it could create a huge amount of volatility and it could be like the day after the referendum all over again.
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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