Pound to US dollar forecast: Dollar close to a 2-year high vs Sterling

Pound to Dollar Rate Recovers Losses

Weak Sterling pushes US Dollar rates to near 2 year highs against the Pound

The pound to US dollar exchange rate is now trading at close to a 2-year low. Sterling appears to be under an enormous amount of pressure caused by the uncertainty of Brexit as well as the current leadership election.

Conservative leadership contest: Boris likely to take no.10

We are just a week away from finding out who the next British Prime Minister will be and the likelihood is that we’ll see Boris Johnson take charge. During previous general elections this has often brought about an increase in the value of the pound. This often happens as it means businesses will have a number of years’ worth of certainty so can plan and budget.

However, the difference is that this is a leadership election. Therefore, the pound may not see the boost compared to what has happened before. The real problem is that Brexit is unlikely to be solved in the near future so the uncertainty surrounding the future of the UK and its relationship with the European Union is causing problems for the Pound.

US interest rate cut this month?

We could see some changes for GBP/USD exchange rates towards the end of the month when the US Federal Reserve meet to decide monetary policy. The chances are increasing of an interest rate cut and if that happens this could see a brief period of dollar weakness against the pound.

The trade wars between the US and China are ongoing and do not appear to be getting resolved anytime in the near future. Therefore, although the US dollar is staying strong against the pound and the euro any interest rate cut may see some further movement for the pound vs the US dollar.

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