Pound to US Dollar forecast: Could the GBP/USD rate fall below 1.20 again?

Pound to US Dollar forecast Could the GBPUSD rate fall below 1.20 again?

GBP to USD exchange rate rise on optimism of a Brexit extension

The pound to US dollar exchange rate has risen this week, after touching lows of 1.1967 on the interbank rate on the 3rd, only to soar to 1.2347 by the same measure. This jump is a reflection of various issues including renewed optimism of a Brexit extension, and concerns the US central bank, the Federal Reserve, will need to cut interest rates in the future.

The US currency has been rising in value in 2019, particularly this summer against a weaker pound with increasing Brexit fears of a no-deal exit. With that immediate fear gently subsiding, as parliament seeks to block no-deal, the pound has found some support.

Non-Farm Payroll data released today

The end of this week is a key time, with investors closely monitoring the Friday NFPR, Non-Farm Payroll data that is released. This will see the latest news on the US labour market including the Unemployment rate, and how many news jobs have been created in the last month. This provides the US central bank and the currency market with data to make a clearer assessment on what form of monetary policy adjustments, if any, are required ahead.

US China trade war: How could the trade war affect exchange rates?

With Donald Trump and the Trade Wars continuing to weigh on global economic sentiment, the GBP/USD level could rise further if the pound keeps finding form and investors become more concerned over the US Economic outlook. Of course, this is not guaranteed, and the reverse is quite possible too, in this increasing volatile market of late.

Pound to US dollar exchange rates have risen this week on the interbank rate, in part because the mood for sterling had been very negative, and the dollar optimistic coming into this week. A change of course perhaps explains some of the increased movement, as investors and the market struggle to price in the changes in sentiment.

If you have a transfer ahead, buying or selling pounds or US dollar, please speak to our team to discuss the latest news and events to drive your exchange rate.