The UK's decision to leave the EU will likely have an impact on the US economy, to what degree is unknown yet, but GBPUSD exchange rates have fallen significantly in the last few hours.

The UK leaves the EU

The leave vote has seen the GBP/USD rate dip to below 1.35, cancelling out the gains that the Pound has made against the Dollar in recent weeks. The USD seems to be the biggest beneficiary from the shock news. The most obvious reason for this is that the USD is known as a safe haven currency, and during times of global uncertainty (such as today) investors will move their funds into the USD and gold as they hold their value. The American markets don’t open until 14:30 local time and will be interesting to see how the US markets react to the news.

Interest rates and EU referendum

Yesterday, stronger than expected employment data was a welcome short term boost for the dollar before the referendum results were known. Janet Yellen mentioned that the EU was impairing the FED’s decision to raise interest rates, however now the UK has left the EU, the global uncertainty surrounding the future of the UK’s trade links, the strength of the pound and the future of the single currency, the US are not likely to be raising interest rates anytime this year.

Clients looking to buy or sell dollars will now be asking themselves what next. My prediction is that until the markets know what is next for the UK, investors are likely to keep their funds in the dollar. This will translate into dollar strength for the foreseeable future. Whilst current rates are attractive to current dollar sellers, if you have dollars to buy it may be worth looking at doing something sooner rather than later.

Our team here at currencies.co.uk is here to help you to time the transaction so you get the most back. If you want to protect yourself now from further market volatility, a forward contract could potentially help. Speak to one of our team to find out how to protect yourself.

If you are worried about the impact of the UKs withdrawal from the EU and the impact it might have on your US Dollar needs, speak to one of us today on 01494 725 353 or email me here for further assistance.

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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.