This has been a very busy week for the US Dollar as we had their latest interest rate decision, with the latest Non-Farm Payroll data and Unemployment decision out today. This is looking like it could be another positive for the US Dollar which has been gently rising all week.
GBPUSD had been trading in a fairly tight range of 1.30-1.32 in the last few weeks; we are currently at the more recent lows and could easily break below the 1.30 mark today. A combination of a stronger US Dollar and weaker Sterling providing the ingredients and expectation for a move into the 1.29’s and potentially lower too.
The Pound struggled yesterday against all currencies with the Bank of England raising interest rates but suggesting the highest they would get might be around 3%. Previous highs would have been around 5.5% before the financial crisis, Mark Carney made clear the longer term outlook was now less certain.
Sterling rose after the initial hike but then quickly gave up much of the ground it had claimed, quickly losing ground against currencies performing well lately, such as the US Dollar.
I think GBPUSD will remain a tough exchange rate for US Dollar buyers, it is difficult to see what will in the short term see the Pound stronger and the US Dollar weaker. The Bank of England decision was the big news this month and there is no expected big news released on Brexit, the UK Government are now on recess until September.
This means the confidence in the market driving the US Dollar higher looks likely to remain in place, clients with a GBPUSD requirement might find buying US Dollars remains expensive, the best strategy seems to be to minimise risk.
If you have any GBPUSD currency transfers to make please do feel free to get in touch and discuss further your requirements, you can reach me on firstname.lastname@example.org.