The US Dollar has been performing well of late, and is currently offering one of the highest returns for investors in the Western world. The table below shows the difference in Dollars you could have achieved when buying £200,000.00 during the high and low points of the past week.

Currency Pair% ChangeDifference on £200,000
GBPUSD-2.40%$6699.58
US Trade impacts growth and could push interest rates up Trade talks have certainly been a major talking point and are very likely to remain so going forward. Over the summer the trade conversations with China intensified. The US imposed a 25% tariff on $50bn worth of Chinese imports which was matched quickly. This rising tension over trade is changing global risk appetites and have resulted in an increasing amount of capital flowing out of emerging markets and has weakening global growth prospects. The IMF recently estimated that trade tariffs and other measures implemented recently could reduce global GDP by as much as 0.5% by 2020.

Cable rate hits a 5-week low

During my last market report I highlighted that cable (GBPUSD) tends to strengthen during the month of April.

As it stands it could be 13th time unlikely as the Pound to US Dollar buying rate has dropped below the 1.40 mark, which is lower than where the pair began the month. There is still a week for the Pound to recover its recent losses, although I think that if this Thursday talks surrounding the Customs Union don’t go in favour of Theresa May’s cabinet, we could see the GBP/USD fall further (please see GBP section for more information). The Customs Union concerns have put pressure on the Pound, and seeing cable hit a 5-week low this morning demonstrates this as just last week cable hit the headlines after hitting a post-Brexit high of 1.4376.

Sterling is dropping after Retail Sales and UK Inflation data weakened the Pounds value. BoE Governor Mark Carney failing to confirm May’s rate hike also helped GBP/USD lose value.

At the same time the US Dollar was the best performing currency last week as US government bonds are offering higher returns now the US Dollar offers one of the highest yields in the developed world, with further rate hikes expected both this year and next.

The US Dollar index, which is a gauge against a basket of other major currency pairs, is trading at its highest level since early March.

I do think that US Dollar sellers should be wary of holding out for further gains though, as much of the expected rate hikes are priced into the markets, and should they not materialise I think the Dollar is likely to fall. The tensions between the US and Russia in Syria along with the talks of a trade war with China also have the potential to scupper the Dollars good fortune, and these are all areas to watch for those with a US Dollar requirement.

Friday set to be the US Dollars busiest day this week

If you’re planning on making a transfer involving the US Dollar this week, you have plenty of time to discuss it with us before perhaps the busiest day for US Dollar exchange rates this week.

On Friday at 1.30pm US GDP figures will be released, measuring economic output in the US. The figure expected is 2.3% over the last year, so expect any deviations from this figure to result in movement for USD exchange rates.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.