We have seen a half cent swing for the GBP/USD cross during today's London trading session, after markets reacted to European Central Bank President Mario Draghi's press conference this afternoon.
For the best GBP/USD exchange rate click here.
GBP/USD had been hovering around the $1.2150 mark all morning, but during Draghi's speech the dollar started to weaken as investors pulled out of the dollar and headed for the euro.
The move allowed the pound to claw back some of the ground it has lost against the dollar over the past couple of sessions, with the currency pair coming in within touching distance of $1.22. However the gains can only be described as short-lived, as within the space of a four hours the GBP/USD cross was back trading around $1.2140.
GBP/USD daily graph.
What did Draghi say?
Over the past few weeks investors have been heading into the dollar, largely down to the potential interest rate hike from the Federal Reserve next week, but also because of the uncertainty currently surrounding Brexit and the French Elections.
Despite all the uncertainty across Europe, Draghi's comments this afternoon have given the euro a much need boost. Mr Draghi stated it was less necessary for the European Central Bank to support the market with ultra-loose monetary policy. He also said the central bank had removed the reference of using all available measures to increase growth and inflation "because the sense of urgency is not there".
What next for the GBP/USD cross?
In the short-term all attention will now switch to tomorrow's unpredictable Non-Farm Payroll jobs report from the U.S. After yesterday's bumper employment change reading, investors will be hoping Friday's job figure is just as positive, which if it is, will all but guarantee another rate hike from the Federal Reserve next week and we could see the dollar strengthen further.
Do you need to buy or sell dollars?
If you have a requirement to buy or sell dollars in the weeks or months and are worried about the impact Brexit or the Federal Reserve rate hike could have on your transfer, contact me today for a free, no-obligation currency consultation.
For more information about how I can help or to find out what rate of exchange I can offer complete the contact form by clicking on the link below.
