The pound vs the US dollar has hit its best rate to buy US dollars with dterling since early March which is a four week high.
The US dollar has been seen as a global safe haven in recent times with GBPUSD exchange rates falling to as low as 1.14 in March prior to the Bank of England intervening with monetary policy.
The Bank of England cut interest rates to just 0.1% as well as introducing Quantitative Easing measures of £200bn. This helped to provide the Pound with some much needed support vs a number of currencies as well as vs the US Dollar, a positive for the UK and therefore Sterling after a period when it looked as though Sterling was going to keep falling.
Indeed, a few days prior to the Bank of England’s decision the pound fell by as much as 5% vs the US dollar. In the last three weeks the real concern for the US economy has been the increasing US jobless claims. Only a few weeks ago prior to the pandemic the figure was just 300,000 but this has now risen to 6.6m last week when the recent figures were released. Jobless claims are now above 10m and are likely to keep rising.
Earlier this week the Federal Reserve (Fed) introduced further stimulus measures to try and support the US economy. The amount of money allocated is as much as $2.3trillion, which sounds excessive.
However, with global Gross Domestic Product (GDP) data is set to fall by unprecedented amounts it is important to realise that these measures are necessary in order to stabilise the economy. Even after the Fed intervened the Pound has remained relatively strong and is currently close to its highest levels in the last 4 weeks. This has provided potential opportunities for those buying dollars.
If you would like further information, an indicative quote for buying or selling US dollars compared to using your bank, contact me using the form below. I look forward to hearing from you.