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You are here: Home / US Dollar / Sterling continues its struggle against the US Dollar

Sterling continues its struggle against the US Dollar

October 7, 2016 by Ben Fletcher

Sterling continues its struggle against the US Dollar

US dollar weaknessIn a strange day of events which saw a normal evening turn into a night to remember the USD soared. Last night a supposed computer generated algorithm started a massive sell off which saw the GBP/USD rate fall to 1.18 before climbing back towards the 1.24 level.

There is still speculation as to how this happened and there really isn’t a definitive answer just yet.

What we do know however is that after a pretty torrid week for Sterling this was something of an unwanted end. Sterling looks likely to fall further in the short term as there doesn’t appear to be much good news coming from anywhere. There is impressive domestic data which has shown manufacturing in the UK is currently at a several year high. This has not proven enough to support Sterling and in the last week it has lost over 10 cent against the USD.

This afternoon there was Unemployment and Non-Farm Payrolls in the US, with both coming in worse than expected. The unemployment level in the US rose from 4.9% up to 5% and there were nearly 20,000 jobs less than expected in the non-farm industries across the States. The negative news for the US could bring the potential interest rates into question, much of the current Dollar strength is the expectation of a rate hike this year no matter what the election throws up.

Over the next week there could be extreme volatility across all the currency markets, however if you are looking to complete a transaction I would make sure you’re constantly aware of what’s happening, further news on Article 50 could trigger further down-slides.

Filed Under: US Dollar Tagged With: GBPUSD, Non-Farm payroll

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