Having broken clear of the 1.30 mark only a week ago the pound has now dropped back below with quite some force.
In the past week alone, the cost to buy $200,000 has fluctuated by over £4000 which just goes to show how important it is to make sure you have a firm eye on market movements.
|Currency Pair||% Change in 1 month||Difference on £200,000|
Although the mid-term elections last week did not go totally to plan for President Trump, they have not caused a huge concern to investors and speculators, and the dollar has gained back a lot of ground against most major currencies now that the dust has settled.
There is no doubt that the mid-terms will not make life easy for Trump, but only time will tell on just how difficult it will be to make vital policy changes and it seems as though investors and speculators alike have almost turned a blind eye to that at this stage.
There are now concerns that due to the mid-terms potentially hindering Trump pushing plans through Congress, he may now fully turn his focus to trade wars with China, where he has much more of a free reign. Trump did nod to the Trade tensions last week, in one breath he had mentioned that he would like to try and make a deal with Chinese President Xi and in the next breath he sought to complain about the amount the US is paying in tariffs.
Expectations are for Trump and Xi to meet up on the side-lines of the G20 summit at the end of this month. I'm expecting a lot of cat and mouse in advance of this as both men aim to do the best for their respective countries.
Now that the mid-terms and Federal Reserve interest rate decision are out of the way, I would expect to see Brexit talks and further trade negotiations between the US and China impact this pairing over the course of this week.
With the resignation of Jo Johnson at the back end of last week and further tensions rising, the pound has had a tough start to the week against all major currencies.
News hit the wires yesterday that the Cabinet has backed the Prime Minister, and that we may still see some progress in the next 48 hours. However we should be aware that Brexit news seems to be changing by the hour, so the pound has become exceptionally volatile as a result.
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