GBP/USD rates moved back through 1.30 during Thursday’s trading, with the pound finding plenty of support to drive it back above this key threshold.
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This spike came in line with reports yesterday which indicated that a deal has now been agreed for the UK’s financial services sector to remain part of the customs union post Brexit. However, with these reports yet to substantiated, it may be worth taking advantage of the current spike and removing any unnecessary risk from the market.
If recent history has taught us anything, is that this would not be the first time the pound has threatened to make a move back above 1.30 against the greenback, only to leave those clients holding GBP disappointed.
The US economy continues to post impressive numbers, and despite a slight slowdown in Manufacturing & Production in October, it is likely that a strong economy will continue to help support the USD around its current levels against sterling.
In truth, GBP/USD has remained relatively range bound over recent weeks. The pound has found plenty of support around 1.28 and above but has struggled to hold its position above 1.30, as market fears around Brexit talks and the UK’s longer-term economic standing continue to manifest themselves.
The markets are seemingly waiting for a breakthrough in Brexit talks before making their next significant move, with the current level of uncertainty unlikely to drive investor confidence substantially in the pound.
Looking at today’s economic data, US Non-Farm payroll figures are likely to take centre stage along with their latest Unemployment figure. Those clients with a GBP/USD currency requirement should be keeping a close eye on both of these key economic releases.
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