GBP/USD rates have fallen below 1.22, with pressure mounting on the Pound. The question many clients are now asking is whether the pair could fall below 1.20 - close to some of the best levels seen for USD sellers over the past 30 years!
Much of the talk over the past few months has been over whether the introduction of President Trump would start a USD decline but as of yet, the controversial statesman has done little to dampen investor confidence in the greenback.
Much of the current market sentiment is being driven by Brexit as discussed throughout this report but with an anticipation that the US FED will raise interest rates again sooner rather than later, the USD continues to be well supported by investors.
With much uncertainty in the global markets at present there is also an argument to be made that investors are trying to secure the value of their currency, in a safe haven status like the USD.
In times of global downturn money is moved away from riskier assets and this, combined with so much uncertainty surrounding the UK at present, is also a likely reason the USD is performing so well.
Personally, I feel the Pound will find support above 1.20 but I do not expect an aggressive move forward for Sterling over the coming weeks. Those clients holding the Pound may have missed their opportunity when rates moved to 1.25 recently and now could be the time to protect any short to medium-term, GBP/USD transfers, rather than gamble on a falling market.
Considering President Trump signed yet another executive order banning citizens of six, primarily Muslim occupied countries from entering the US and the USD still strengthened is key in my opinion.
As it stands the USD has gained even more value and despite President Trump trying to talk down the value of the USD to boost US exports, the greenback continues to ride the crest of a wave.
Looking ahead and we have the official Unemployment rate out for the US on Friday and with the expected figure of 4.7% an improvement on last months, the Pound could continue to struggle as we head towards the end of the trading week.
For more information on how future data releases could affect your currency requirement call our trading floor on 01494 725 353 or email me directly at email@example.com.
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