The pound to US dollar rate has struggled during the course of this week after Theresa May’s resignation announcement.
How will May’s resignation affect pound to US dollar rates?
The Prime Minister will be leaving in just over a week’s time and the search has begun for a new replacement. This has destabilised the situation in the UK and the pound is feeling the impact. The pound is not just lower vs the US dollar but also against a number of different currencies.
There are a number of different candidates who are vying for the role. Voting will be taking place in the next couple of weeks. During this period the pound is likely to come under a lot of pressure. Therefore, if you’re thinking about buying US dollars it may be worth getting this organised in the near future.
US China trade wars continue to impact the pound to US dollar rate
Meanwhile, the US-China trade wars continue to rumble on. One Chinese representative has claimed ‘at the negotiating table, the US government has made many arrogant requests, including restricting the development of state-owned enterprises.’
The problems between the two countries does not appear to be concluding and this is helping to strengthen the US dollar. The dollar is being used as a safe haven currency and this is why we are seeing GBP/USD rates move lower.
Trump has even threatened to increase tariffs even further and this could see further strength for the US dollar. Investors appear to be moving away from riskier currencies and moving money in to the dollar.
As we move towards the end of the week we have the release of US GDP on Thursday afternoon. The expectation is for growth of 3.1% for the year. This is much higher than that of both the UK and the Eurozone. Therefore, another strong release could see further losses for the GBP/USD exchange rate.
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