Sterling has made good against the Dollar over the course of trading this week and in fact at points yesterday hit the highest market level we have had since June 2018.
Pound vs Dollar forecast
The GBP/USD rate appears to be hitting a slight level of resistance up in the 1.33s. If the Pound can have a final push this week then we may find that it pushes through and up closer to the 1.35 level, which we have not seen since early 2018.
UK receives positive investment news
Positive news this morning that Norway’s sovereign wealth fund, worth $1 trillion, has announced plans to increase their percentage of investments in the UK, despite the current unknown Brexit situation. This has been seen as a great boost for the UK and indeed the Pound too. This fund is the largest in the world, so this level of confidence will most likely filter through to investors and speculators alike.
Federal Reserve’s dovish stance on US interest rates
On top of this positive news for the U.K we have also seen a more dovish stance from the US Federal Reserve and their approach to interest rates this year. The Fed has been consistent with rate hikes recently and this had led to the Dollar becoming more attractive to investors and therefore Dollar strength against most major currencies.
Should the Fed now be tightening their policy and the rate hikes start to slow in 2019 then the Dollar may also start to soften too. This could be another reason why I feel that GBP/USD exchange rates have more chance of climbing rather than falling in the near future.
If you have been sitting on USD (or any currency pegged to USD) to sell then it is key to remember that historically the USD/GBP rate is still extremely favourable. Do try not to fall into the trap of just watching the rate move further and further against you worrying about what it was last month.
Here at Pound Sterling Forecast we can help clients both in terms of the timing of their transfers and with ensuring they get a competitive exchange rate when they do make a move to exchange their funds.
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