GBPUSD AT 1.70!

The Dollar has dropped against all the major currencies after the Federal Reserve Bank in America has stated that interest rates will remain at record low levels for a considerable time.

The U.S. currency fell for a second day against the euro, the first back-to-back declines this month, while the pound climbed to a more-than-five-year high as the Federal Open Market Committee cut the outlook for economic growth at yesterday’s policy meeting. Emerging-market currencies rallied as volatility slid to a record amid demand for higher-yielding investments.

Bank of England Chief Economist Andrew Haldane said the choice of when to raise interest rates is “a difficult one.” BOE Governor Mark Carney said on June 12 that the first interest-rate increase “could happen sooner than markets currently expect.” Sterling has risen against all of its developed-country peers in the past month as investors pushed forward their expectations of when policy makers will raise the main interest rate.

“If it’s a choice between central banks that are keeping rates low for a very long period of time or a central bank that is actually relatively hawkish, I think it’s quite simple,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. “Sterling is the one out of all the Group-of-seven currencies that’s got the opportunity to do something quite significant.”

The pound advanced 0.4% to $1.7057, reaching the highest since October 2008.

Please feel free to drop me an email or call me to discuss the rates and best options on your FX requirements.