Pound to US Dollar rates are in for a busy period as Brexit turmoil threatens to unseat the GBPUSD pairing below the key 1.30 level of resistance. Markets are pricing in the possibility of either a Boris Johnson challenge or worse, perhaps a Nigel Farage or Jeremy Corbyn Prime Minister. This is a very much outside chance but who would have thought that we would be in the position we are now in 2 or 3 years ago?
GBPUSD has fallen for two reasons, namely a weaker Pound but also a rising US Dollar at the hands of increased global uncertainties. The prospect of the US Dollar as a safe haven currency rising in value has increased as the uncertainty from the UK-EU political situation weighs on global sentiments.
Theresa May has vowed to fight on in Government but who knows what is around the corner? We were told there would be no snap election yet in the end there was. We have also been led to believe there was unity and compromise within the UK Government’s negotiating position over the weekend, now we can see this is not looking so likely.
The markets can quickly change and I do feel there is now more chance of this getting worse rather than better over the course of the coming weeks. I think it more than likely that GBPUSD will nudge below 1.30 and suggest clients looking to buy or sell US Dollars for Pounds look to make plans sooner than later.
Other news this week will be the highly anticipated Donald Trump meeting in the UK which given all the recent headlines could make for some uncomfortable moments. Trump has championed the Brexit vote and it will be interesting to see how he plays his hand on the global stage this week.
GBPUSD appears poised to slide further if the UK’s political woes persist, if you have a transfer and wish for the latest news and to discuss strategy, please do get in touch to discuss further using firstname.lastname@example.org.