GBP/USD rate have risen to their best in almost a year, after last nights FED interest rate decision. They left rates on hold, and made comments about inflation slowing which lent investors to decide that interest rates would not go up again in the short term. This weakened the USD and pushed Pound/Dollar rates to $1.3150, the highest we’ve seen in 10 months.
Elsewhere, Pound/Euro rates have nudged above €1.12 following an upward revision of UK GDP to 0.3%. This lent the Pound some support, but GBP/EUR remains close to a 9 month low. The Euro has benefited a little from the Dollar weakness, keeping Pound/Euro rates subdued. I think that with limited progress being made with Brexit negotiations, there’s a good chance the Pound will come under further pressure in August.
Those that need to buy Euros or Dollars with Sterling may wish to consider fixing a rate with a Forward contract. This allows you to freeze the current rate for up to 2 years by lodging a 10% deposit. It protects you against the rate getting worse and allows you to budget effectively, ideal when purchasing property abroad or paying for goods in USD.