Matthew Vassallo
Senior Executive Dealer
GBP/USD Hits 1.30!
We have recently seen Sterling touch 1.30 against USD for the first time in weeks following a positive trend for GBP.
With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour, this US Dollar report looks at the factors likely to affected exchange rates in the coming weeks. The table below shows the difference in USD you would have achieved when buying £200,000 over the past month.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/USD | 2.5% | $6,520 |
Sterling makes gains against the greenback – When should clients lock in their GBP/USD positions?
Sterling has touched 1.30 against the USD, having been marooned under this key threshold for weeks.
The improvement has come in line with some support for the Pound across the board but will the current trend continue, or is this another false dawn after weeks of uncertainty dragging Sterling’s value down?
Whilst the current market has proved increasingly difficult to dissect, there is no doubt last week’s comments by BoE governor Mark Carney regarding a prospective interest rate hike has brought back some much-needed confidence to the markets.
However, this is not the first time we have seen the Pound start to make a recovery, only to see investor confidence sapped by further negative reports surrounding the UK’s unstable political & economic situation.
This point becomes even more valid when we consider that the US economy is starting to drive forward again, with growth forecasts for the second and third quarters being revised up after a jump in Consumer & Business confidence, although perhaps the reason Sterling found some support was the IMF’s warning regarding White House policies during this timeframe.
I am still continuing to advocate that my clients look for short-term opportunities in the current market, so any trade prices around 1.30 on Cable seem extremely attractive when we consider the downward trend of Sterling over the past few weeks.
Trump introduces sanctions on Chinese Citizens & Companies
US Treasury secretary Steven Mnuchin announced late last week that president Trump was taking action against Chinese individuals & Companies that they felt were aiding or even associated with North Korea.
This is the President’s latest step in trying to isolate the controversial state in an effort to prevent further unrest on the Korean peninsula but will this move only antagonise the Korean’s further?
Whilst Trump’s health & tax reforms are once again gathering some momentum any indications of tensions rising between the US & North Korea could put pressure on the US economy and ultimately the USD. Any clients with a USD currency exchange to make will want to keep a close eye on media reports as further unrest is unlikely to breed investor confidence and in turn the USD could suffer.
