As the Brexit meeting loomed on Friday, the GBPUSD rate dropped a further cent and now sits within a cent of the most expensive times to buy the US dollar for 15 months. Over the last 2 weeks GBPUSD rates have swung by nearly 3 cents making a difference of over $7,000 on a £200,000 transfer.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The change over the last 7 days however has been fairly muted as both currencies increased in value. The UK pound climbed as there has been an increased expectation that the Brexit deal will move forward, this is now pending the vote in Westminster. The US dollar also rose in value after hopes that the US and China may renegotiate their trade tariffs at the next G20 meeting, after both leaders confirmed their attendance and agreed to meet.
The G20 meeting starts on Thursday, running until Saturday with most expecting US-China trade talks and climate change to take centre stage. Currently the US has further sanctions scheduled to come into effect in the New Year on $250 billion worth of US imports from China, which will increase from 10% to 25%. Any delay or change to this plan will result in a major movement for the USD value.
Following the Thanksgiving holiday in the US last week we have a much busier week commencing with data being released. Markets will be keenly waiting for suggestions from the main retailers on how successful the holidays have been, with the Black Friday shopping season a major contributor to sales and therefore profits.
Additionally, there is housing data released on Tuesday, key GDP figures and FED updates on Wednesday, Personal Consumption on Thursday and PMI data on Friday. Most are expected to show an expansion in the US economy which would suggest a stronger USD is coming.
Personally, I see the GBPUSD rate falling further as the US economy continues to out pace the UK’s, which seems to have been really handicapped by Brexit negotiations over the last 2 years. This means that USD buyers may want to move sooner rather than later to avoid further costs whereby sellers may wait for more gains.
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