Sterling weakened against the US dollar as the different strategies being implemented by the respective central banks moves them apart. The US Federal Reserve is potentially going to increase its interest rate whilst the BoE may cut its again. Investors are now pricing in a 55% chance of a rate hike by the US before the end of the year. Since hitting a three-decade low in July in the wake of the vote for Brexit, sterling has since only recovered 2%, leaving it still 12% lower than before the vote.
The dollar strengthened yesterday to a two-week high against a basket of currencies as the markets looked towards the key job data figure this Friday. The figures are expected to show that a further net 180,000 jobs have been added, and a higher figure would only heighten expectations of an interest rate hike. Only a significant miss is likely to weigh on the dollar.
If you are looking to buy or sell US dollars, we suggest contacting your trader now for live rates, news and currency purchasing strategies.
For the latest rates and news on a wide range of currency pairings, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541 .