GBPUSD has improved for US Dollar buyers rising to a 2-week high yesterday over fears of the US not keeping up their pace of interest rate hikes. Following a very strong showing in the last few weeks, the US Dollar has softened overnight as the US Federal Reserve confirmed that they might not be raising rates as quickly as planned.
The US Dollar is also weaker as Donald Trump comes under fresh pressure following the scandal surrounding former campaign manager Paul Manafort and also his former attorney Michael Cohen. This all relates to ‘payments’ to a third party who are reported to have been mistresses of Donald Trump.
Sterling has risen against the US Dollar presenting a good short term opportunity which might well be quickly undone as Brexit concerns are likely to be quickly back in investors’ minds.
The move on GBPUSD is largely then down to US Dollar weakness and not therefore GBP strength. Today is the release of the UK Government’s Brexit no-deal plans and it should make for some interesting reading by investors, it seems that the Pound might easily come under pressure once again.
GBPUSD could now rise further as the market begins to become more concerned about the future pace of interest hikes as a more ‘neutral’ level is achieved. It is well known that the President is not in favour of very high rates which would only act as a dampener on the economy down the line.
We have the UK Bank holiday weekend approaching which can see some big movements in the currency markets as investors close off positions, and there is less liquidity which can move the market more than usual.
If you have any position buying or selling US Dollars for the Pound then the best of the US Dollar against the Pound might now be over in the short term. To discuss this further please do get in touch with me at email@example.com.