GBP/USD reach near 4 month high

GBP/USD rates have climbed of late and reached a near 4 month high, levels are now nearly 4% higher over the last 30 days giving client an extra $9,750 on a £200,000 transfer. Even though a majority of these gains are from Sterling strength rather than US Dollar weakness there have been some growing concerns around what the US economy will look like moving forward.

US jobless and interest rates

Jobless figures are hugely important when looking at any economy but especially that of the US. This is because the FED has continually suggested that they watch both jobless and wage numbers when deciding on future interest rate change; their thinking being that before interest rates are increased they need to be comfortable that people will be able to afford the climb in mortgages and it will not create more problems down the line. Overall jobless figures in the US have continued to improve with the creation of 227,000 jobs in January alone however wage growth slowed. This as a result pushed back forecasts for any pending US interest rates later this year which in turn weakened the US Dollar as investors took their money out on the hunt for better returns elsewhere.

Jobless figures will remain key and indeed should be something that anyone with US exposure continues to remain vigilant of. Personally I don’t expect an interest rate until the June meeting as many FED members who vote on such an interest rate hike search for some certainty as to what the US economy will look like under their new President.

Trump impact USD value

The Trump administration have come in with a number of sweeping statements which are causing some concerns in the financial market.

Several leading US business leaders have outright criticised President Trump’s new immigration policy that is continuing to be fought after in the courts. US equities have been sold off as investors have continued to try and evaluate the latest policies from the White House.

One policy in question which should be keenly watched is the executive order to review the 2010 Dodd-Frank financial regulations which he described as, “a disaster.

These regulations were in following the financial crash to stop the same mistakes being repeated. Some say that it introduced too much regulation which are chocking business whereas others argue that it is too risky to relax. They now have 120 days to consult with the Financial Stability Oversight Council.

GBP/USD forecast for today

Many expect GBP/USD rates to climb today driven by the expected good news being released from the UK. We do however also have import/export figures from the US in this morning’s session and the Baker Hughes oil count this afternoon, both are expected to show a slight contraction and I think will only assist in giving GBP/USD buyers nearly the best levels seen in 4 months.

US Dollar buyers should make the most of spikes in the market, as further down falls for GBP/USD may emerge as we approach the deadline for Brexit. Speak to a member of our team as they may be able to assist in getting a competitive rate of exchange. Call us on 01494 725 353 or email hse@currencies.co.uk for more information.

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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.