Sterling has managed to make some impressive gains against the Dollar so far this month and I believe Trump will play a pivotal role this week as to whether this trend will continue. The controversial factors surrounding Trump and the USD are discussed in the following Dollar report, with the table showing the range of exchange rates throughout the past week showing the importance of timing your transfer to maximise on your return.

Currency Pair% ChangeDifference on £200,000

The US President faces 2 challenges early this week. The subsequent cards he chooses to play will likely determine whether or not Cable will continue to hover above the 1.30 mark.

Paul Manafort, Trump’s (victorious) campaign manager became the latest of his advisors to plead guilty and agree to co-operate in investigations into the allegations of Russian influence in the 2016 US elections. The White House commented on the plea as  being “totally unrelated” to Trump’s victorious campaign but I do find it hard to believe the markets won’t take further precautions. Manafort is the biggest fish that Robert Mueller (Head of investigations) has caught so far, heaping further pressure on the Trump administration.

Furthermore, the President also made it clear they are ready to commit to the proposed $200bn tariffs against China in the early stages of this week despite the positive vibes we saw from both sides last week. Just how the markets react to this remains to be seen, however I wouldn’t be surprised to see the Dollar benefit from any kind of retaliation, as investors will flock towards the safer haven currencies amidst global uncertainty. I can certainly see the Dollar starting on the front foot as a result.

The GBPUSD pairing is likely to be influenced by Brexit in the up and coming week, however there will be opportunities from both sides for clients with a requirement. After the Bank Holiday in America on Friday, US markets are patiently waiting to see if the US equity market will recover after the slump yesterday with key speeches this week from Vice Chair Clarida tomorrow and the Fed Chair Powell on Thursday. Speeches generally have the ability to influence the currency in question and with question marks surrounding US fiscal policy and whether the interest rate plan will continue in the US at such an aggressive path next year. With GBP under pressure from domestic political struggles, clients buying USD with GBP may find it slightly cheaper to do so around these speeches.

Next opportunity to buy dollars?

Politics aside, economic releases are naturally carrying extra significance with the next Federal Reserve interest rate decision only 9 days away. The overwhelming consensus is for another interest rate hike as per the Fed’s aggressive stance but this isn’t to say that investor’s will not be wary of flaky economic data that might sway the Fed’s confidence long term.

Wednesday’s housing data may well provide those looking to buy Dollars with Sterling with an opportunity to maximize their returns. Given that the number of new homes and new building permits have stagnated over the last few months there might be scope for Sterling to make further in roads against the Dollar.

I would be wary of Thursday’s employment data however. Last week’s initial jobless claims numbers surprised the markets with yet another impressive fall. If this positivity is reflected in Thursday’s release we could see the Dollar’s value jump.

As a result, unless the media throw up another flurry of optimistic headlines around the ongoing Brexit talks, I would be very surprised to see Sterling holding strong above the 1.30 mark as the week comes to an end.

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.