Will GBPUSD levels get back over 1.30?

GBPUSD drops to 1.2840 on Brexit fears

Buying US Dollars with Pounds has once again become very expensive as the Pound struggles to maintain any form with Brexit uncertainties hanging over it. Even the small boost last week on the Michel Barnier’s comments has proved shortlived as investors track more recent comments which are not being seen in such a positive light.

Brexit uncertainties have in many ways now increased as we see the latest challenges from Michel Barnier stating that the UK will not necessarily get any kind of special deal as previously expected. It appears the market read too much into the previous comments as many did suggest was possible.

Where next for GBPUSD exchange rates?

Further pressure is being heaped on the Pound and Mrs May as investors also gear up for the latest news from the UK Government. There is a high expectation that the hard Brexit elements will now become more vocal and may seek to disrupt Mrs May’s Chequers plan. It appears so long as the Brexit uncertainties continue, and they are likely to continue further, the Pound will struggle.

This is an important week on GBPUSD with the latest NFPR, Non-Farm Payroll data due. We are waiting to hear the latest news on US Unemployment and the figures above. Historically, this can be a very volatile time on GBPUSD exchange rates as the news can be very difficult to predict.

When should I buy or sell US Dollars?

Expectations for the Pound are centred around Brexit, on the US side we will find that interest rate expectations are the main driver. At the moment there is a strong belief that the next meeting by the US Federal Reserve on the 26th September will see a hike, the market will also be beginning to price in the expectations for a further hike in December.

The fundamentals massively support the strengthening of the US Dollar, their economy is booming, growing at 4.2% last quarter versus the UK’s meagre 0.4%. The US are on a path to raising interest rates further, making their currency more attractive too.

All in all it seems like buying US Dollars on any spike is the best bet to protect from Brexit uncertainties catchign sterling holders out. On the flipside, US Dollar sellers whilst trading at some of the best rates in 30 years, might benefit from hanging on to catch better levels.

For more information please contact me Jonathan Watson to discuss the latest news and forecast. You can get in touch directly using [email protected].

The post Will GBPUSD levels get back over 1.30? appeared first on Pound Sterling Forecast.