Pound dollar exchange rate hits two week high

The pound has continued it strong start to the week against the U.S dollar, with the currency pair climbing to a two week high this morning.

At the time of writing the GBP/USD cross is trading at $1.2295 (mid-market), rising over half a cent from the London session opening price of $1.2234.

GBP/USD graph

Since Monday sterling has risen nearly 1.2% against the dollar as the UK economy continues to show its resilient side, with the pound has also being helped by the dollar weakening due to the uncertainty of the U.S. Presidential election.

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Figures this morning showed the UK Construction sector grew at a faster pace than forecast, with the PMI reading coming in at 52.6 against a predicted level of 51.9 (a reading over 50.0 indicates growth). Following yesterday's positive Manufacturing data, today's Construction numbers have helped the pound secure the gains it has made over the past forty-eight hours.

 

Is this the start of the pounds recovery?

At the moment I would say not yet. Markets are still concerned over the future of the UK economy due to the referendum result and the upcoming Brexit negotiations. Although all the data is still suggesting the UK economy is moving forward, I cannot see investors moving into the pound until they get some kind of reassurance over any exit deal.

What could influence GBP/USD exchange rates this week?

There are two major announcements coming in the next twenty-four hours and could cause some heightened volatility for the currency pair. This evening will see the U.S. Federal Reserve announce their latest interest rate decision which will be followed by at statement from Fed Chair Janet Yellen. I don't think anyone is expecting anything to happen tonight but if Ms Yellen hints at another rate hike in December, then we could see the dollar strengthen across the board.

Attention will then turn to the Bank of England (BoE) and their announcements tomorrow afternoon. The central bank will also deliver their interest rate decision, meeting minutes and rate votes but investors will be mainly focusing on the banks quarterly inflation report. It is widely expected the BoE will raise its inflation forecasts to allow an overshoot of its target due to the weaker pound.

If the BoE raise their inflation target it will fuel expectations that an interest rate hike could be on the horizon and almost certainly rule out another rate cut. If that were to happen we should see the pound increase in value and in turn push GBP/USD higher.

 

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GBP/USD exchange rate rises over one per cent

Since my post yesterday morning, the pound has been making steady progress against the dollar, with the GBP/USD cross rising over one per cent in the past twenty-four hours.

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After falling to a low of $1.2145 early yesterday afternoon, the pound rose to $1.2277 against the dollar this morning, leaving the currency pair at its highest level since the 20th October.

GBP/USD graph.

Why has the pound risen?

As I mentioned yesterday the markets were reacting to media reports that Bank of England Governor Mark Carney could be on the brink of resigning. However, it has now emerged that Mr Carney will step down in 2019, and means he will serve one more than the five years he initially committed to.

This is great news for investors and traders as it means Mr Carney will continue his leadership of the UK's central bank throughout the upcoming Brexit negotiations, and removes some of uncertainty that had been building over the past few days.

The news helped cement the gains the pound has made overnight and there was more good news this morning after another positive UK Manufacturing PMI reading.

Figures published by Markit confirmed the UK's manufacturing sector grew for the month of October with the reading coming in at 54.3 (a reading over 50.0 indicates growth), with the weaker pound boosting the country's exports.

Are you thinking of buying or selling dollars?

If you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

 

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GBP/USD exchange rate forecast for the coming week

After recovering slightly over the early part of this morning's trading session, the pound has once again found itself slipping against the U.S. dollar.

 

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The GBP/USD cross was trading around $1.22 when markets opened in London, but since then the pound has been steadily edging lower against its U.S. counterpart as you can see from the graph below.

GBP/USD graph

Why is the pound falling today?

With talk of the UK's exit from the European Union still weighing heavily on Sterling, markets were thrown another curve ball over the weekend with several media outlets announcing that Bank of England Governor Mark Carney could bring an end to his tenure in 2018.

Despite other newspapers contradicting these theories and saying he will stay on for his full eight year term, investors have been left in limbo and will now be looking towards the Bank of England's meeting on Thursday for some clues.

What could impact GBP/USD this week?

As I mentioned above, the Bank of England will meet on Thursday for what it dubbed "Super Thursday". Along with their interest rate decision, meeting minutes, asset purchase facility and interest rate votes, the central bank will also deliver their quarterly inflation figures.

With the UK inflation figure rising quickly due to a weaker pound and the cost of imports, we could see some changes made to the Bank of England's inflation target. Mr Carney could also announce an interest rate hike is on the horizon to combat the rising inflation figure.

The meeting has the potential to move the GBP/USD cross in either direction, depending on how traders and investors view the banks actions or comments.

Come Thursday afternoon we could easily see the pound trading under $1.20 against the dollar if the comments are seen as negative, while a positive outcome could push the currency pair back towards $1.23.

Are you thinking of buying or selling dollars?

 If you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

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Is the pound going to continue to fall against the dollar?

Since my post yesterday morning the pound has been falling against the U.S. dollar. As I predicted, the spike we witnessed after the UK GDP reading didn't last very long, and after climbing to a fresh seven day high of $1.2266 the GBP/USD cross has been in free-fall. At the time of writing GBP/USD is trading at $1.2126 (mid-market)

GBP/USD graph

With the better than expected GDP reading failing to lift investor confidence, it is becoming increasingly obvious that positive economic data is going to have very little impact on the pounds
value.

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The political uncertainty surrounding the UK's exit from the EU looks set to carry on, and until Article 50 is invoked and we get a clearer picture about any potential deal I think the pound will continue to struggle.

Sterling has lost around twenty per cent against the U.S. dollar since the referendum result and I for one would not be surprised if the GBP/USD cross fell even further.

There is a real possibility we could see a fresh thirty-one year low in the coming weeks, especially if the U.S. Federal Reserve increase interest rates before the end of the year.

If the UK government push ahead with a so called "hard Brexit" and the Fed decide to hike rates in December, GBP/USD could finds itself trading around $1.15 in the not to distant future.

Are you thinking of buying or selling dollars?

 If you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

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Pound rises against the dollar after GDP reading

The pound has edged higher against the dollar this morning after the latest UK GDP figure beat analysts forecasts.

As I mentioned earlier in the week, investors were waiting for this mornings third quarter reading to see how the UK economy has performed in the first three months after the referendum result.

Many had expected the UK economy to crumble on the back of the Brexit vote, but so far data suggests things are still moving forwards. This mornings GDP reading had been predicted to come at 0.3%, however figures published by the Office for National Statistics at 0930 (BST) this morning showed the economy grew by 0.5%.

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The news gave the pound an immediate boost with the GBP/USD cross rising from $1.2203 to $1.2264 as the graph below shows. The move this morning also means that GBP/USD is now at it highest level since the 20th October.

GBP/USD graph

Will the pound climb any higher?

It is still to early to say, as there is still so much uncertainty surrounding the UK and exit negotiations. Under normal circumstances a positive GDP reading would usually result in a bigger gain for the country's currency, however, the pound is still being weighed down by talk of a hard Brexit and this is unlikely to change any time soon.

After the spike this morning I wouldn't be surprised if we saw the GBP/USD cross settle back around $1.22 within the next couple of hours. In the short term I still believe GBP/USD could lose more ground, especially if the U.S. Federal Reserve raise interest rates before the end of year. A rate hike by the Fed could easily see the pound lose out and could force the currency pair below $1.20.

In the long term I am sure GBP/USD will recover but I cannot be certain of the time frame. Once the UK is standing on its own two feet and the dust settles from years of Brexit negotiations then we could see the pound back over $1.50 against the dollar.

 

Are you thinking of buying or selling dollars?

If you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

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GBP/USD exchange rate back to $1.22

This morning has seen the pound recover the ground it lost against the dollar, with the GBP/USD cross now trading back above $1.2200.

As I mentioned yesterday morning markets were waiting in anticipation for Bank of England Governor Mark Carney's meeting and in the build up to his testimony the pound lost ground across the board.

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Before the meeting investors and traders had thought Mr Carney would use the opportunity to hint at further rate cuts or added stimulus, as a result GBP/USD rates fell over one per to a low of $1.2086 as you can see from the graph below.

GBP/USD graph

 

So why has the pound recovered?

The pounds rise was prompted by Mark Carney, when he stated the Bank of England will not ignore the fall sterling has sustained since Britain's vote to leave the European Union.

He stated there were limits to the banks ability to overlook the recent decline and they would have to take it into account at their rate meeting next week.

These comments have all but ruled out another rate cut from the central bank, especially as the UK's inflation figure is on the rise. It would seem the markets are now taking the view that Mark Carney & Co could actually start to raise rates in the near future in order to combat the rise in inflation.

A rate hike would be seen as welcome boost for the pound and could prompt a recovery for all Sterling crosses.

Do you need to buy or sell dollars?

If you are looking to buy or sell dollars in the coming weeks and want to ensure you are making the most from your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

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Will the GBP/USD exchange rate lose more ground today?

The GBP/USD cross has remained relatively range bound for the past few sessions but could we see the pound lose ground against the dollar later this afternoon?

Since Friday the GBP/USD cross has been bouncing between $1.22 and $1.2250, giving the indication the pound has found some much needed support. However, with Brexit talk still weighing heavily on sterling we could easily see the pound edge back to the lows we have witnessed over the past few weeks.

GBP/USD graph

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We could see further evidence of this later this afternoon as markets turn their attention to Bank of England Governor Mark Carny. Mr Carney is due to appear in front of the House of Lords Economic Committee at 15:35 (GMT), to talk over the economic concerns of Britain's vote to leave the European Union.

The discussions have the ability to unsettle sterling as Mr Carney could take the opportunity to pave the way for further monetary easing. Since last week's rise to the UK's inflation figure investors have started to price out another rate cut from the Bank of England, but if Carney takes a dovish stance this afternoon we could see traders reverse those positions, which in turn could force the pound lower across the board.

If Carney hints at further stimulus or another rate cut in the near future then it is likely we will see the pound give up some of the ground it has made against dollar, and we could easily see the currency pair drop below $1.21.

 

Do you have any upcoming requirement?

If you are looking to buy or sell dollars in the coming weeks and are worried about the impact Brexit negotiations could have on your transfer, contact me today for a free, no-obligation currency consultation.

As a specialist in currency exchange, I have a wide range of tools at my disposal to help protect you against adverse market movements or target a rate of exchange that might not be currently available.

For more information about how I can help or to find out what rate of exchange I can offer, click here or call me directly on 0044 (0) 1442 892 065.

 

For a free currency consultation click here.