GBPUSD exchange rates hit another low
With the news yesterday surrounding an Interest rate cut by the Bank of England, Pound Sterling started the morning in unfavorable territory. Whilst the move was necessary to prevent further downfalls in the British economy, investor confidence has taken yet another tumble in a post-Brexit environment.
And whilst investment moved to the safe-haven status of the US Dollar, markets found even more reason today to buy into the US, Non-farm payroll figures came in much higher than anticipated, easing concerns over the US economy.
Interest rate hike more likely
As this is now the second set of figures that highlighted strong growth, the FED may well be looking to hike rates sooner than expected. The next interest rate decision is due next month and there is every possibility Yellen may pull the trigger on a hike. Whilst the current GBPUSD rates are at a historic low, a FED hike could put rates into much worse territory.
Should I buy US Dollars now?
With this in mind, those looking to buy US Dollars should consider the data today and the implications it could have in the weeks to come. Given that Brexit is yet to begin there is far more against Pound than there is in favour. I am expected further downturn for Sterling before rates recover so those looking to buy US Dollars should consider doing so before Tuesday of next week, when the NIESR release growth for the last 3 months, which is likely to trend negatively given the recent run of poor PMI data.
I have US Dollars to sell, should i wait?
One of the key events of this year is due in the US, the presidential election is turning out to be one of the most controversial yet. The recent highs against the Pound may not be around much longer and I would consider making a transfer soon in order to make the most of these historic highs.
There is no guarantee that the FED will hike rates, they have been very apprehensive even in positive economic conditions and I would not wait in hope of one coming soon.