Could the GBP / USD rate be below 1.25 until Christmas

GBP / USD hit a low of 1.267571 overnight, and although the pound rebounded above 1.27 during the early morning trade, the pound sterling is currently showing no signs that the greenback is really showing signs.

In fact, the pound has been locked below 1.30 for an extended period of time, and even if it has managed to put pressure on this key threshold, it has not kept its position.

This is not particularly surprising when you consider the relative health and prospects of individual economies. The US appears to be developing from strength to strength as the UK continues to pull away from the pillar towards continued Brexit tensions.

Much of the media has now focused on the upcoming Brexit vote, which will take place next Tuesday in the House of Commonsth December. From then on, MEPs will vote on whether to approve the Brexit agreement of British Prime Minister Theresa May with the EU.

The current feeling is that MEPs may well vote against what, if true, Britain could leave, which is a highly enviable position, possibly leading to a no-deal Brexit.

This is considered by the majority to be the worst outcome for the UK economy, as this would burden us with no trade deal with our nearest neighbors, but also in a global economic weakness with the rest of the world.

A look at the US economy and things looks much healthier on the other side of the Atlantic, even though oil prices have dropped and concerns are worrying about President Trump's confrontation with China. In fact, even this escalating situation has been cooled by the US and China agreeing on a ceasefire while further negotiations are taking place.

While the situation is not yet fully understood, an indication of a breakthrough in talks on a long-term agreement between the two power plants could help to further strengthen USD strength, and we could see Cable back down before the end of the year 1.25 returns the year.

If you would like to know more about GBP / USD rates, please contact us using the form below. I am pleased to contact you personally.