The pound has risen over half a cent against the dollar today, pushing the currency pair back above $1.30. The GBP/USD cross hit an intraday high of $1.3040 before slipping back, as you can see from the graph below. GBP/USD graph
Over the past week the dollar has lost ground against most of the other major currencies, largely down to the political turmoil currently surrounding President Donald Trump. Despite the possibility of another interest rate hike from the U.S. Federal Reserve next month, the dollar is struggling to find any real momentum, and this has been highlighted in the gains we have seen for the GBP/USD cross.
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Since the middle of March the pound has risen around 7.5% against the dollar, leaving the cross close to the highest levels we have seen since the 22nd September 2016.
Investors and market players are growing increasingly concerned about Trump following last weeks leaked memo and talk of the President discussing classified information with the Russian foreign minister. There has been mounting speculation about impeachment and if that kind of talk continues then the dollar is likely to remain under pressure for the foreseeable future.
The dollar has given up all of the gains it made following Trumps election victory, and even the uncertainty over the upcoming Brexit negotiations are having little impact on value of the GBP/USD cross.
However, that's not to say the pound will continue to rise over the next few months. Over the past week sterling has lost ground against nearly all of the other majors, so it is safe to say the recent revival is mainly down to dollar weakness rather than sterling strength.
Should I buy dollars now?
If you are thinking of buying dollars in the coming weeks, I think it is worth taking advantage of the recent and unexpected gains. Converting £200,000 into dollars today, will achieve you around $18,000 more than it did two months ago, and if the Brexit negotiations suddenly have an impact we could easily see GBP/USD drop back down to $1.25.
Contact me today if you are looking to buy dollars.
If you have an upcoming requirement to buy dollars and want to take advantage of the best exchange rate for nearly eight months, contact me today for a free consultation.
A popular tool for clients with an upcoming transfer is a ‘Forward Contract’. This allows you to secure the current exchange rate for up to 2 years, by lodging 10% of the total you need to convert.
This protects you against the rate moving against you, and also allows you to budget effectively.
We also offer significantly better exchange rates than high street banks offer, meaning you could save thousands on your currency exchange.
