Sterling’s rally against the USD has continued this week, with GBP/USD rates now trading back above 1.30.
With the Pound closing in on a six week high, the key question now is whether the current trend is likely to continue over the coming days?
Sterling’s value has been boosted by comments from the EU Commissioner Michel Barnier, who indicated that a deal with the UK could be made within 6-8 weeks.
Whilst there has been no further insight into the final details of any prospective deal, it does seem that there is a willingness on both sides to make it happen. This in turn is helping to alleviate some of the pressure that was building around a potential no-deal scenario and the Pound has benefited as a result.
Whilst Sterling’s value has spiked in tandem with this upturn in confidence, this is not the first time the Pound has threatened to make inroads against the Greenback, only for those clients holding GBP to be left ultimately disappointed.
My opinion has not wavered in regards to the best strategy, which is for those clients with Sterling exchange requirements to consider taking advantage of the current improvement. I still feel this is a short-term opportunist market and one that lacks stability and investor confidence.
The Pound’s value is being driven by rumours and media reports on Brexit, and it would only take another negative spin to sap confidence and the Pound’s value would likely decrease as a result.
We also need to consider that the USD’s value is being protected by the current slow-down in the global economy. This is forcing investors to turn to the safe haven status of the Greenback, which in turn is helping to support its value around the current levels.
If you have any questions on the above or other factors that could impact USD exchange rates, you can use the form below to request further information. I’ll get in touch personally and will be happy to discuss your query.