Best GBP to USD exchange rate drops alongside oil

Best GBP to USD Exchange Rate Drops Alongside Oil

The best GBP to USD exchange rate has recently been dropping with a 3-day negative streak. The drop in crude oil prices seems to have been a vital part of this story. The BoE governor seemed to confirm that this was the case, shedding a rather negative light on the situation. At the current point, the best GBP to USD exchange rate has moved to around 1.2245, a drop from the high of 1.2430 this week.

The governor also slashed hopes of any rate cuts in the coming months. This helped to depreciate the value of the currency pair further. The main focus of the bank, according to him, is combatting inflation for the time being. This has considerably worried investors, as interest rates are quite high as things currently stand. This could all considerably impact the GBP to USD forecast for 2023.

Their aim is to bring inflation within 2% ultimately. In the meantime, the bank’s policies will have to be quite restrictive to ensure this result. However, there may be a possible rate cut in 2024, although this possibility is uncertain for now. At the current moment, inflation is over 5%, well above the level the bank desires. As one would expect, the subsequent interest rate will have considerable consequences for the best GBP to USD exchange rate.

Another factor which we mentioned earlier is the movement in oil prices. Brent, an essential indicator for oil, dropped below $80. WTI fell to $75 per barrel.

There was also the lowering of US stock indices during this time. The Dow fell by 1%, with the Nasdaq declining by 4%. It seems their winning streak is finally over.

Looking back at the pair, technical analysis reveals the pair is at a Fibonacci pivot point. Therefore, it seems likely that the pair will be moving up in the coming days. It may rise to a resistance point around 1.2335, so the GBP/USD forecast long-term is positive. However, a drop below 1.2250 would forecast a bearish trend.

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