The GBP-USD rate fell to a new 2021 low over night. Going as low as 1.3363 before settling back at 1.3400 this morning. The BoEs decision to avoid a raising interest rates in its November meeting has added uncertainty to the market. The market was expecting a rate hike to look to manage expected rises in inflation but with only 2 votes from 9 to hike rates, the BoE still seems to be a way off moving off the current record low interest rates currently in place.
The pound has not been helped by US September inflation surging and the UK’s September GDP reading showing a rebound in the economy but still lagging behind other major countries.
The Euro also continues to have a tough time against both the GBP and USD. GBP-USD is back up to 1.1700 while EUR-USD has continued to move lower, through the 1.1500 figures to the lowest levels since July 2020. With potential US interest rate hikes, the spread between USD and EUR interest rates could continue to widen and give further downside pressure.
Dollar buyers from both the pound and euro face a real risk to their costs in 2022 and should look to evaluate their requirements accordingly. Please look to give your WorldFirst relationship manager a call if you are looking to review your currency strategy moving forward.
Have a great weekend.
Chris Allan, Senior Relationship Manager
Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available here.