Forex news

GBP conversion rate could have a strong future

The UK’s GBP conversion rate has been performing well against other currencies such as the USD this year. This is due to the effects of inflation that both the US and the UK have been undergoing. We have seen similar patterns when it comes to the EUR. This is linked to the BoE has trying to keep interest rates up. The preference in markets right now is a 25bps rise in interest rates in the coming month. The changes that are most likely to take place would be a positive for the UK pound. The moves will likely support the GBP, as the US Fed’s plans seem to be to stay steady with their interest rates. The conversion of 100 GBP to USD stands at 127 currently.

The Fed’s moves will be important these days. The chair of the Fed, Jerome Powell, is going to speak at an annual financial meeting. Here, analysts are expecting him to give indications or at least hint at what the Fed’s plans are to tackle inflation.

Mr.Powell could make indications that the Fed will be continuing on its current course. If so, the GBP will likely have a bullish breakout, with the BoE staying on its interest rate hikes. However, if the Fed is going to be doing the unexpected and raising interest rates, the GBP conversion rate’s future looks different. The GBP could then break below the support level as bearish sentiment becomes important. Finding another support level would then become vital.

Related Post

Public borrowing in the UK has been high recently. It has even outdone expectations, as July data shows. If we look at the total public sector borrowing when excluding banks in the public sector we find £4.3 billion being taken. This is a staggering £3.4 billion more than last July’s record. It is a July with some of the highest borrowings since 1993.

Since there has been no change in the EU or any of its associated organisations, the EUR to GBP should remain rather stable.

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