Will GBP/USD fall through 1.20 this year?

Much of the Sterling section of this market report is covering Sterling negative news announcements; mostly Brexit based which are details I think our clients need to be aware of.

The major topic of discussion in the US currently is most certainly the upcoming Presidential election, which is now just 3 weeks away.

The US Dollar has gone from strength to strength this year and not just vs the Pound but generally across the board when we look at the major currencies. Not only does the country have an impressively low unemployment rate of 4.9%, but the fundamentals are generally positive and the currency has benefitted from its status as a safe haven currency for much of this year.

There is the expectation of at least 1 interest rate hike this year and once that’s implemented, as Jan Yellen has alluded to recently, I’m expecting further US Dollar strength and expecting the GBP/USD pair to break below 1.20.

Presidential debate likely to be Trump’s last chance

Many political commentators actually gave the last televised debate to Trump after he stepped up his game after the first debate. Irrespective of his performance that night, he has since found himself in the middle of sexual assault allegations he can’t blame on a rigged media because there’s a video of him making those comments.

Clinton has opened up a 10-point lead since and I personally think tomorrows debate is his last chance to win over the favour of undecided voters. Bear in mind that the financial markets are generally hoping for a Clinton victory, as she’s considered the safer option, I’m expecting US Dollar weakness only if Trump surprisingly takes the lead in the polls.

Aside from the televised debate I think that Thursdays Initial Jobless Claims figures could impact cable (GBP/USD), so feel free to get in touch before then if you wish to discuss an upcoming currency requirement.

Those buying US Dollars should make the most of the spikes in the market. Our brokers may be able to help you in these instances. Call our trading floor on 01494 725 353 to discuss your requirements in more detail.

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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.