Excel Currencies Blog

Let's begin by looking at the numbers for Sterling v US Dollar in 2023;

Mid-market high - 1.31
Mid-market low - 1.18
Average - 1.24
Increase in value - +6%

Apart from the chaotic 2022, last year was the most volatile year for the pair since 2019. It was a year that ended completely unexpectedly too, after pretty much everyone in the market bet against GBP in Q4, only for it to rise from the ashes after 3-months of 'punishment'.

Looking quickly at 2022;

Mid-market high - 1.37
Mid-market low - 1.07
Average - 1.22
Decrease in value - -10%

Remember, the above are 'inter-bank rates' and so the high and low points stated, would both be lower to you as the consumer when calculating any concrete figures. 

To note - The highest £-$ has been over the last 10-years is 1.44 back in July 2015 and the lowest was 1.06 in March 2020. This is useful to know when looking at where current trading levels could be in a cycle. 

So what can we expect for 2024?

Well as always with this volatile pair, that's rather impossible to answer, as the variables involved are too many and at play too often. Plan for the worst and hope for the best is what the giants in the market will tell you and we can certainly help with the former. 

But to leave you with some food for thought, 7 out of 10 of the biggest FX market forecasters are expecting GBP v USD to 'sink' in 2024 at some point. 1.14 mid-market has been cited by the most dovish of them, whereas the most hawkish see a mid-market rate of 1.35. 

Central banks continue to hold the key to the FX market for potentially the last year and all eyes will be on which major cuts interest rates first and further and who holds higher for longer. 

Recession fears will no doubt start hurting consumer confidence in 2024 and we still have a hypersensitive environment to inflation, growth, stagflation, oil, stocks, jobs and war.

Finally, the results of the UK & US elections will either create market carnage or they will be a non-event. But what is guaranteed is in the second half of the year, this will take centre stage and cause huge volatility, which means we are in for another year of 'who-the-hell-knows-what-is-going-to-happen'..