GBPUSD have found a new strength following the Brexit vote. With the upcoming US elections is Sterling likely to fall below its 31-year lows against the US Dollar?
Those clients with a USD requirement should be keeping an extremely close eye on the current market trend, with the USD value slipping over the past 48 hours. This follows a sustained period of strength for the USD, in line with other major currencies improvements against GBP. The USD has performed better than most of late, with a buoyed economy pushing the greenbacks value up, whilst in tangent, the economic demise in the UK has caused the Pound’s value to retract.
However, like everything in life nothing last forever and it was inevitable that the USD’s impressive run would come to an end. The US economic outlook is suddenly looking less bullish, whilst the UK has been boosted by a run of very positive economic data. This was backed up by last night’s Fed’s Beige Book report, which indicated that the US economy is expanding at only a modest pace, with rising wages and a tight labour market giving investors food for thought. This may also have a bearing on the Fed’s thinking, when it comes to another prospective interest rate hike this year.
This combined has caused GBP/USD rates to move back through 1.34 on the exchange at the recent high and despite rates dropping back below this level following some inconsistent UK data yesterday, I do now feel the pair are likely to remain comfortably above 1.30 for the foreseeable future.
The Trump Effect, as many are now labelling it, is sure to have a bearing on the USD over the coming months. With the polls narrowing and Trump’s new campaign team trying to re-establish a more conservative, responsible image, the once unthinkable thought of a Trump Presidency starts to hold more weight.
What is becoming apparent is that Hilary Clinton is certainly not the automatic choice. In fact, the amount of controversy she has engulfed herself in makes me wonder whether she would even stand a fighting chance against almost any other electoral, apart from Donald Trump. I believe the closer we get to Novembers election the more polls will narrow and as such the USD is likely to weaken.
Therefore, I would be looking to protect any short to medium USD sell positions, rather than gamble on further improvements for the USD.
Those selling US Dollars can still make the most of major highs against Sterling. Call us today on 01494 725 353 to discuss a currency transfer.
From the initial contact with the broker, through my dealings with the compliance folk, the experience was the same, a great blend of efficiency and friendliness, plus I got a great rate, well done Matt and the team.
Matt and Jonathan were excellent and most professional. Through out I felt I was in good hands – they took time to explain everything to me and were very patient when I was experiencing some technical problem with my own bank.
Matt was very helpful and efficient, very good service.