Tuesday, 8 March 2016

Pound/Dollar exchange rates reach 2 week high

Pound/Dollar rates have recovered recently, pushing back above the $1.40 level to reach a 2 week high:


The reason for the climb in GBP/USD rates was due to employment data released last week. The jobs data released on Friday showed that significantly more jobs than expected had been created, which would usually be positive and therefore strengthen the Dollar, pulling exchange rates lower. However when you look closer you see that actually wage growth in the USA was very low indeed, which means the FED are unlikely to raise interest rates again any time soon. As such the USD weakened, pushing GBP/USD to a 2 week high, and back above the $1.40  mark.

Moving forwards, I think that the EU referendum will come back into focus, meaning any further gains for this currency pair could be limited.

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