Welcome to Pure FX’s latest update of the pound to US dollar interbank exchange rate.
This tells you when it’s a favourable time to exchange pounds to US dollars, for your money transfer!
Sterling jumps versus the greenback! The pound to US dollar interbank exchange rate has hit its highest in 1 week today, or since February 19th, at 1.4046.
The pound to US dollar interbank exchange rate has risen, because Bank of England (BoE) policymaker Dave Ramsden has said that UK interest rates may need to rise sooner.
The pound has climbed, because speaking to The Sunday Times yesterday, Mr. Ramsden said that UK interest rates may rise faster, if UK wages go up in early 2018 as the BoE expects.
This has lifted sterling, because if UK interest rates rise sooner above their current 0.5%, this will make investing in UK assets more profitable for international money managers.
In particular, Mr. Ramsden told The Sunday Times that “we all will keep a close eye on what happens through the early part of this year” to see if UK wages rise, thus lifting the pound.
In addition, the BoE executive added that “certainly relative to where I was, I see the case for rates rising somewhat sooner rather than somewhat later”, thereby boosting sterling too!
US dollar weakens, as Fed’s Powell to testify
Furthermore, the pound to US dollar interbank exchange rate has also strengthened, because the Federal Reserve’s new chairman Jerome Powell is set to testify to Congress this week.
In particular, Mr. Powell will deliver the Fed’s semi-annual report on monetary policy and the economy, to the US Congress’s Financial Services Committee on Tuesday, so weakening the US dollar.
This has dragged down the greenback, first because financial markets think that Mr. Powell may play down the possibility of lifting US interest rates faster, above their current 1.25%-1.5%.
Mr. Powell could talk down the odds of hiking US interest rates 4 times this year, to ensure stability on global stock markets, following their recent volatility, thereby weighing on the buck.
In turn, this has hurt the US dollar, because if the Fed chairman hints at hiking US interest rates more steadily, this will give money managers less incentive to buy American assets.
Given all this, the pound to US dollar interbank exchange rate has reached this 1-week high, and could rise further!
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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email firstname.lastname@example.org.
1. Masayuki Kitano, “Dollar falters as U.S. bond yields slip; yen edges higher”, February 26th 2018, Reuters.com, https://www.reuters.com/article/uk-global-forex/dollar-falters-as-u-s-bond-yields-slip-yen-edges-higher-idUSKCN1GA02B
2. Reuters Staff, “BoE’s Ramsden sees case to raise rates sooner than he thought”, February 24th 2018, Reuters.com, https://www.reuters.com/article/us-britain-boe-ramsden/boes-ramsden-sees-case-to-raise-rates-sooner-than-he-thought-idUSKCN1G80Y0
3. Sam Fleming and Chris Giles, “‘Neutral rate’ in focus as Jay Powell takes Federal Reserve helm”, February 26th 2018, FT.com, https://www.ft.com/content/e721bbaa-19a1-11e8-aaca-4574d7dabfb6