GBPUSD exchange rates remain volatile with the US elections, a potential for a FED hike and Brexit still playing on market decisions. A contract option may be safer bet to mitigate risk.

US Dollar buyers and sellers should consider a contract with Foreign Currency Direct

There remains 3 major events this year that could significantly impact your US Dollar buying or selling requirements. Brexit, the US elections and the potential for a FED hike. This is where a contract from Foreign currency direct could save you from potential losses.

Whilst clients may consider gambling on the result of the US elections, the likelihood of a FED hike this year or Article 50 being held off until 2017, the potential losses that could arise from such a gamble could be costly. One only needs to look at the result of the UK’s Referendum to know what a gamble could cost.

US FED hike likely this year

US retail sales slightly disappointed yesterday but the job sector is still showing signs of improvement. With Janet Yellen’s main focus on lowering unemployment and improving wage growth, I am expecting the FED to hike rates by December at the latest.

That leaves the question of when? We could see a FED rate hike as early as next week, and the implications this could have on GBPUSD as well as GBPNZD, GBPAUD and GBPCAD could be significant.

US elections could be the most volatile yet

It was considered by many, an easy win for Hillary Clinton earlier this year as she rivals Donald Trump for the Whitehouse. And just like the Brexit vote, the tables appear to have turned.

If it’s not Clinton’s health that’s under scrutiny, her email scandals and accusations of corruption continue to dominate the media whilst Trump appears to be relatively shielded from criticism.

Do US citizens want a potentially unfit President or will they take their chances at a Trump presidency?

Oxford economics stated on Tuesday that the US economy could lose $1tn in the event Trump wins in November, what ramifications could that have on the US Dollar?

The actual Brexit

Brexit is still yet to happen but with pressure building on Theresa May to start the process, the UK could begin its withdrawal from the EU sooner than expected.

And with this brings further uncertainty for Sterling, it has been recently announced that Theresa May will keep much of the discussions away from the public eye adding to further speculation that the UK could be opting for a special trade deal with the EU.

The new Government have an almost impossible task of balancing the needs of both the Leave campaign and the UK economy. It’s widely expected that some level of free movement must be kept to benefit the financial sectors and London’s status as the financial hub of the World. Whilst balancing the needs of the people who voted to end free movement of people.

The timing of Article 50, and the strategy for leaving the EU will shape Sterling in the months and years ahead.

Contact options

Here at Foreign Currency Direct, we offer a range of services to our clients to help tackle the ongoing problem of market volatility. From Forward contracts that lock in current exchange rates to a Regular Payment Plan (RPP), that allow you to send money overseas in smaller payments to mitigate risk in a volatile market. If timing is less crucial to you or you are looking to buy Sterling, a limit order allows us to buy your currency once it reaches your desired rate of exchange. With Sterling likely to fall once Article 50 is triggered, this option could be a safe bet if you have the luxury of time.

In any event, speak to our brokers today about these options, it could save you thousands on a currency transfer.


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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.