The pound’s exchange rate reached its highest level this year
The GBP/USD exchange rate has reached its all-time high in 2023.
The pound rose against the US dollar on news of local elections that showed the Tories lost many seats overnight.
Results are still to come in many areas, so it will be interesting to see how this plays out.
Compared to previous elections, Labor has won huge numbers as well as the Liberal Democrats, which does not bode well for Rishi Sunak’s government.
US Federal Reserve raises interest rates again
Meanwhile, returning the focus to the US economy has seen the Federal Reserve raise interest rates again.
Interest rates are now at their highest levels in 16 years in the world’s leading economies. It’s his 10th rate hike in just 14 months.
One of the main reasons for the weaker US dollar is the Fed’s suggestion that the rate hike cycle may be slowing and this could be the last one for some time.
The recent drop in inflation to 5% suggests that the Fed’s aggressive policy appears to be working.
The usual way to combat rising inflation is the recent interest rate hikes.
This has weakened the dollar as it indicates that an interest rate cycle may be coming to an end which means investors may consider other yield alternatives.
It also shows that the economy is starting to calm down. This could mean that investors are more confident to put their money into riskier alternatives.
Feel free to contact me directly for more information or a free quote when buying or selling USD.
I have been working with one of the UK’s longest established brokers since 2003 and would love to hear from you.
Tom Hollian [email protected]
