Overshadowed for a long time, this currency suddenly reached a 1-year peak, with profits twice as high as USD

For a long time, the British pound (GBP) was much stronger than the US dollar (USD). However, since the UK left the European Union (Brexit), the value of this long-standing currency has rapidly declined and has been overshadowed by the USD for a long time.

During this time, the USD continues to be the focus of all markets after the continuous interest rate hikes from the US Federal Reserve (FED). Therefore, GBP is increasingly overshadowed by the USD.

Therefore, few people have noticed that over the past year, the British pound has been quietly increasing in value. In the Vietnamese market, the GBP has increased at nearly twice the rate compared to the USD.

Specifically, on the morning of May 9, at the Joint Stock Commercial Bank for Foreign Trade of Vietnam, the GBP/VND exchange rate was listed at VND 28,804/GBP (buy) - VND 30,032/GBP, an increase of VND 1,365/GBP, equivalent to 4.76% compared to the session on May 9, 2022.

I've been in the dark for a long time, but this currency suddenly rose to a peak in 1 year, and its profit doubled the USD, picture 1. — Overshadowed for a long time, this currency has been quietly rising over the past time and has officially reached its 1-year "peak", bringing investors profits twice as high as USD. Illustrative photo

Meanwhile, the USD/VND exchange rate at Vietcombank is listed at: 23,250 VND/USD - 23,620 VND/USD, an increase of 525 VND/USD, equivalent to 2.27% after 1 year of trading.

Thus, after 1 year, the British pound has increased twice as fast as the US dollar.

This is the result of the British pound “heating up” on the world market. Recently, this currency even reached a 1-year “peak”.

Specifically, earlier this week, while the US dollar struggled as traders waited for the Fed to acknowledge the end of the bull run while trying to hedge against potential recession risks.

The dollar index, which measures the greenback's strength against six rivals, was slightly higher at 101.41, better than a one-year low of 100.78 hit last month.

The Fed raised interest rates by 25 basis points last week but has been a little more cautious about the prospect of further rate hikes in the future. The Fed has signaled that it will soon end its tightening cycle. Meanwhile, European central banks appear reluctant to end the cycle as they continue to raise interest rates.

“Central bank policy divergences remain in the foreground and continue to underpin European currencies against the dollar,” said Joe Manimbo, senior market analyst at Convera.

“The Fed’s latest rate hike could be the last while the Bank of England is expected to raise rates this week and more in the coming months, helping to support the pound,” Joe Manimbo explained why the pound has been strong and could continue to heat up in the near future.

The pound hit its highest level against the dollar in more than a year on Monday. It traded as high as $1.2668, its highest since April 2022, but fell slightly below that level and was last seen at $1.2614. The pound remains in focus this week ahead of a Bank of England rate hike expected on Thursday, and it was also firm against the euro.

Against the dollar, the euro has rallied nearly 16% from its September low and was trading little changed on the day at $1.1006, supported by expectations that the European Central Bank will keep interest rates high longer than the Fed. The ECB also slowed the pace of rate hikes last week but signaled further tightening.

Traders remain wary of the debt ceiling impasse on Capitol Hill, with the Treasury secretary warning the government could default on its debt by June 1.

Elsewhere, the dollar was 0.2% higher against the yen at 135.13.

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