GBP has seen its value steadily decline against the USD in recent weeks, with the pair currently trading just above 1.26.
Pound to US dollar rate, pound performing poorly
The USD found further support this week following the markets negative reaction to the recent European election results, which coincided with UK Prime Minister Theresa May announcing her resignation, which will come in to affect form June 7th.
These developments have cemented what has been a torrid period for the pound of late. It wasn’t long ago that the pound was trading back above 1.30, as hope of a breakthrough in cross-party Brexit talks brought an element confidence back to GBP. These hopes as we now know, were quickly dashed and the pound has failed to make any significant inroads against the greenback ever since.
With those clients holding the pound hoping for a change in market sentiment, is this likely to be forthcoming amid the on-going Brexit uncertainty?
Whilst market conditions can of course change at any time, the current standstill in Brexit talks which is likely to go on until at least a new PM is in place, is unlikely to facilitate a major upturn in confidence amongst investors.
Strong US dollar performance
The USD is continuing to perform above analysts’ expectations, coupled with the US dollars ongoing status as a safe haven currency, used in times of global economic uncertainty such as now, and it is difficult to make a case for any immediate upturn for GBP/USD rates.
Of course, the current trend will not last forever, and a slowdown in the US economy during the second half of 2019 is still a possibility but those clients looking to buy USD may wish to protect themselves from further losses, despite the pound sitting close to a five-month low against the greenback.
If you are looking to exchange either pounds or US dollars and would like to learn more on the factors affecting current exchange rates, please feel free to contact me directly using the form below.