Pound to dollar exchange rate – sterling holds ground against US currency
The pound is experiencing a tiny dip after a strong growth period last week
STERLING was holding ground against the dollar this morning after several days of steady growth last week followed by a dip.
At 11.45am today a pound was trading at $1.3958, a fraction up on yesterday's value.
The British currency rallied from 1.35 dollars at the start of January to a post-Brexit high of 1.4268 a month later at the start of February - up nearly six per cent.
The weakness of the US dollar was one of the main drivers, amid fears that monetary policy will tighten more quickly overseas where inflation is rising.
On February 5, the Dow Jones stock index fell by more than 1,000 points in its biggest one-day fall since the start of the global financial crisis.
The drop in US markets, which spread to the UK and Asia, began as investors showed concern of increasing inflation and potential hikes in the US interest rate.
Mona Mahajan, investment strategist with Allianz Global Investors in New York, said: “When you have rates moving upwards, typically what happens is that financial conditions tighten, things like bank lending, mortgage lending start to slow and then the economy is at risk of a potential downturn.”
How to get the best holiday money rate
WE spoke with Hannah Maundrell, editor-in-chief at money.co.uk to find out how you can guarantee the best rate when you go on holiday
- Don’t buy cash at the airport – you’ll always be able to beat the rate with a bit of forward planning
- Compare travel money companies online – Factor in delivery costs and choose the option that gives you the most cash to spend on holiday. If you’ve left it until the last minute order online for airport collection so you get the best of both worlds.
- Use comparison tools – MoneySavingExpert’s TravelMoneyMax enables you to compare pick-up and pre-order rates.
- Don’t pay for travel money with a credit card – it’s likely you’ll be charged a cash withdrawal fee which adds to the cost.
- Top up a prepaid card to lock in your rate now – Choose your card and read the T&Cs carefully as some apply hefty fees. WeSwap, FairFX and Caxton FX are all worth checking out.
- Always choose to pay in the local currency rather than sterling – This will help you avoid sneaky exchange fees
With the value of the pound so closely linked to the outcome of the UK’s departure talks with the EU, all eyes will remain firmly fixed on the remaining Brussels negotiations – with the toughest part, the trade talks, still to come.
Both the UK and the EU’s remaining 27 member states will face “substantial losses” without a deal on Brexit, according to a recent report.
Europe would be clobbered by 1.2million job losses if no agreement were reached, while Britain would take a 4.5 per cent hit to GDP, according to the Centre for Economic Policy Research.
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