Forget the ISA and Savings Accounts! You Could Take a Chance on Forex Trading GBP/USD

Safe and steady investments aren’t right for everyone. Rather than gently building up your savings, you might be ready to take on something riskier. The British Pound has taken a hammering lately, so it could be ready to strike back against the UD Dollar.

The Recent History

The chart showing the GBP/USD trading pair shows a huge level of volatility in the last few years. At the time of writing, £1 is worth $1.30. The start of 2020 has been fairly steady around this level, but last year it fell to £1.20. If we go back to March 2018, the price was £1.40. In the summer of 2015, it was over £1.50. In 2007, GBP reached £2.10 before crashing.

These might not look like particularly huge margins. But remember that forex trading lets you use leverage to invest in currencies without buying them. This is why this market offers such tantalising possibilities as well as potential risks.

Right now, the Pound looks under-valued. Uncertainties over Brexit have hampered it for the last year or more, but things are looking a lot clearer now. However, there are still some issues over the on-going trade agreements to be ironed out.

The Outlook

To decide whether to invest in the GBP/USD pair we need to understand both economies. Let’s start with the UK’s outlook.

If we turn to the US Dollar, we can also see some important points to take into account.

Forecasts for the year show the USD/GBP pair having a fairly steady 2020. The predictions are generally in the range of 1.29-1.34. This is a small degree of movement but opens up the possibility of making a profit on the trade.

Summary – A Bold Investment

With so many factors to take into account, there is no guarantee how this currency pair will reach in 2020. Add in the traditional volatility and leverage of forex trading and there is no doubt that it is a riskier than average investment.

However, for bold investors GBP/USD trading gives some reasons to be optimistic. The signs are that it could provide some handsome earnings if the market moves as predicted.