GBP/USD rates remained fairly flat during yesterday’s trading, which will have been a surprise to many investors considering the events taking place. The UK officially started its detachment from the EU and as mentioned earlier in my report, the Pound received some early market support before retracting slightly by the close of European trading. GBP/USD rates hit a high of 1.2475 but the Pound continues to find resistance under 1.25. In my opinion, any sustainable move through this threshold will be reliant on a number of factors.
On the UK side a smooth transition in terms of how the UK separate themselves from the EU and the trade deals in place will be key. Any positive talk regarding trade negotiations with the individual member states is likely to help drive Sterling’s value, whilst any speedbumps or restricted access is likely to cause problems for the UK economy and the Pound may falter as a result.
So much emphasis is likely to be put on the Brexit negotiations that any good or bad news is likely to drive investor confidence and ultimately the market value of Sterling over the coming months.
Looking at the US and things may be starting to unravel slightly that side of the pond. President Trump is learning fast and has run into trouble at one of his first hurdles. As discussed in a previous report his Healthcare bill has been thrown out due to a lack of support from the Democrats and even members of his own Republican party.
Replacing Obamacare was one of the cornerstones of his campaign bid and with similar problems a distinct possibility when it comes to his tax overhaul, how will the US public and his staunch group of supporters react to yet another failure?
The USD could come under pressure as his economic plan derails and add we add to this the FED’s comments talking down multiple interest rate hikes, it may now be the time to consider your position for any clients holding USD. Call us on 01494 725 353 or email me here to retrieve a quote.
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I have used Foreign Currency Direct for three years now and would definitely recommend them. Although my currency purchases tend to be smallish my contact, Matt Vassallo is always very polite and efficient. I shall continue to use them whenever I need Forex.