Sterling has pushed above the 1.30 mark for the first time since March against the greenback, after a week of accelerating US Dollar weakness.
As concerns grow surrounding notable flareups of COVID-19 across major states as well as the US economy’s recent poor performance, at the time of writing, the GBP/USD is sitting at 1.3045, up a further 0.51% from today’s open.
The timing of this is particularly intriguing, as Bank of America Merrill Lynch Global Research has taken a bearish view on GBP forecasts, reflecting the not-so-simple fact that the UK is on a path to face the dual shocks of COVID and Brexit simultaneously.
It’s no secret that the increased uncertainty and volatility around Sterling over the past few years has been largely caused by Brexit. And as EU and UK trade negotiations continue to inch forward with no indication of an imminent breakthrough, combined with the added pressure of a British economy operating at less than full capacity, we could see a similar volatile trend.
So, is this the time for USD buyers? We believe so.
At Privalgo, our view is that in regard to cable, this recent trend of GBP growth cannot be sustained with the Brexit headwinds ahead. And although the falling greenback has dominated market headlines this week, the anxiety around a potential second COVID wave combined with the possibility of failed trade negotiations means that now is the opportune time for those looking to convert GBP to USD.
We pride ourselves on the ability to seek out opportunities for our clients and partners by using strategies that are backed by over 100 years of market experience. And with structured conversions, our clients can neutralise short-term volatility in the broader foreign exchange market.
It’s this kind of finely tuned industry knowledge and instinct, that we believe is worth sharing.