GBP/USD exchange rate U.S. election update

Well the time has come and undoubtedly the U.S. presidential election will have an impact on the FX markets one way or another.

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According to some of the early polls Donald Trump is narrowly ahead in some States so it looks like it could come down to the wire.

After falling one per cent yesterday the GBP/USD cross has spent the majority of the last twenty-four hours trading around $1.24 but it could all change over the course of today's trading session and the early hours of tomorrow morning.

GBP/USD graph

Investors are focusing all of their attention on the election race, which has been highlighted after this morning's positive UK Manufacturing Production figures did little to effect the GBP/USD exchange rate.

Markets seem to be wary over the potential result in the election and as we approach the final hours of voting we could see some big swings in the value of the dollar.

After the FBI cleared Clinton on Sunday of any wrong doing over the use of her private email, many anticipated she would easily win the vote to become the next President.

However, after the UK referendum result no one is taking anything for granted. A Trump victory would come has a huge surprise, with markets suggesting he has around a thirty per cent chance of winning.

 

But what if he does win?

As I mentioned yesterday, if Trump is victorious then I would expect to see the dollar drop in value. At this stage it is difficult to say by how much but we could easily see a few per cent wiped off the value of the dollar.

If that were to happen then we could see the GBP/USD cross push back over $1.26 by this time tomorrow.

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How will the U.S Presidental Election influence the GBP/USD exchange rate?

The pound has given up some of the ground it made against the U.S. dollar last week, after reports released late last night confirmed Hilary Clinton will not be facing criminal charges over the use of her private email server.

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After climbing to a high of $1.2553 last week the GBP/USD cross has fallen over a per cent with the currency pair now trading back at $1.2410.

GBP/USD graph

The news relating to Hilary Clinton has given the dollar a boost this morning as markets now see her as the clear favourite to win tomorrows election, investors had started to dump the dollar last week after Donald Trump began to narrow the gap in the polls.

What will happen to the GBP/USD cross if Clinton wins?

It would now seem as though the market has already started pricing in a Clinton victory, so if Clinton does win we might not see dollar strengthen a huge amount on Wednesday morning. A lot will depend on the polls over the course of today though, and if Trump does start clawing back some ground over the next few hours we could see investors start to re-position themselves.

What if Trump wins?

If that were to happen I would expect to see the dollar plummet in value in the early hours of Wednesday morning. Not only because of the uncertainty it would create but rumours have been circulating that it could also put a Federal Reserve rate hike on hold next month.

If the GBP/USD cross maintains its current level ahead of the election result then I can easily see the GBP/USD cross break the $1.26 mark if Trump is elected.

 

Are you thinking of buying or selling dollars?

If you are looking to buy or sell dollars in the coming day and are worried about the impact the elections 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.

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Will the pound continue to rise against the dollar and break $1.25?

For the time being at least the pound seems to have cemented the gains it made against the dollar yesterday, with the GBP/USD cross currently trading at $1.2488.

 

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At the time of writing the currency pair is only two pips away from the high we witnessed early yesterday afternoon and leaves the pound trading at its highest level against the dollar since the 6th October.

GBP/USD graph

Could the pound keep on rising?

Later on today the U.S. will publish their latest Non-Farm Payroll job numbers and the data usually causes some heightened volatility for the dollar. The number of jobs created can differ massively from the predicted level and if we see a weaker reading this afternoon we could see the GBP/USD cross break through $1.25.

We also have to remember the U.S. presidential election is taking place next week and markets are anticipating some big swings for the greenback. Rumours are starting to circulate that if Donald Trump wins the election it could have a negative impact on the value of the dollar. With polls suggesting Trump is clawing his way back into the election race, investors have already started to dump the dollar over fears his victory could delay the Federal Reserve raising interest rates in December.

For the first time in months, the short-term forecasts for GBP/USD are looking a little rosier, if the pair can break and hold above $1.25 this afternoon it will give the pound a foundation to rise even further as the election approaches.

Don't get carried away.

Although the pound could rise in the short-term, please don't carried away and think this is the start of the GBP/USD cross returning to some kind of normality. As we get closer to the UK government triggering Article 50 and negotiations get underway with the EU, the pound will come back under pressure and we could easily see sterling fall away again.

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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Can the pound hold onto the gains?

Following the Bank of England announcements this afternoon the pound has continued to rise against the dollar, adding to the gains it made this morning following the High Court ruling. Just after the data was released the GBP/USD cross rose to a high of $1.2490, with the currency pair adding nearly two cents from its opening price.

GBP/USD graph

The UK central bank held interest rates at 0.25%, with all nine Monetary Policy Committee members voting to keep rates on hold, however, the Bank of England increased their inflation and growth forecasts for next year.

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Governor Carney stated the bank has increased its forecast for economic growth from 0.8% to 1.4%, although they have cut the 2018 prediction from 1.8% to 1.5%. The BoE said they see inflation rising to 2.7% next year, largely down to the fall in the price of Sterling.

Increasing the growth and inflation forecasts all but rules out the prospect of the Bank of England cutting interest rates again in the near future, and have helped bring a bit of stability back to the markets.

The questions now is can the pound hold onto the gains, or will the rise today be a temporary spike?

Personally I still don't think this is the start of the pounds recovery, although the UK economy received a boost from the Bank of England and investors feeling a little happier from the High Courts ruling, nothing has really changed.

I believe we could see GBP/USD below $1.20 before the end of year. There is still a chance the Federal Reserve could raise interest rates in December which would boost the value of the dollar, while the pound will come under an increased amount of pressure in the build up to the government triggering Article 50.

In my opinion, if you are looking at purchasing dollars it could be worth taking advantage of the recent spike.

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.
To find out what rate I can offer click here

Pound dollar exchange rate climbing after High Court ruling

The pound is currently surging against the dollar after news broke at 10am (GMT) the UK government has lost its Article 50 court hearing.

So far this morning the GBP/USD cross has risen over a cent, with the currency pair climbing from $1.2334 to a high of $1.2435. This mornings spike leaves the pound trading at its highest level against the dollar since 10th October and we still have the Bank of England announcement to come at midday.

GBP/USD graph

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The High Court has ruled parliament must vote on whether the UK can begin its formal divorce proceedings with the European Union. The ruling means Theresa May and her party cannot trigger Article 50 of the Lisbon Treaty on their own, however we have already had confirmation they will look to appeal the decision.

Prime Minister Theresa May has stated previously that she will look to trigger Article 50 by the end of March 2017 and push ahead with a "hard Brexit", indicating that the UK could give up access to the single market.

Her stance is one of the main reasons the pound has continued to fall over the last couple of months, as giving up access to the single market creates even more uncertainty over the long term future for the UK economy.

At the moment it is still unclear what this could mean for Brexit, but the last hour has shown us that investor confidence has returned slightly as the government may now have to use a softer approach to negotiations.

I will of course keep you updated with any developments and movements following the Bank of England announcement a little later.

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 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.

 

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.

For a free currency consultation click here.

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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