Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just the past month affecting US Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The US Dollar weakened slightly against Sterling yesterday due to confidence that UK Government are pushing to bring the second phase of Brexit negotiations forward, coupled with growing military tensions between the US and North Korea, pushing cable rates back above 1.29 for the first time since last Thursday.
The US and South Korea began annual military exercises yesterday which could be seen by North Korea as preparation for an invasion, and has prompted investors to move their funds into the safe-havens of the Swiss Franc and Japanese Yen.
Tomorrow will be a key event where Markit release PMI (Purchasing Managers Index), Manufacturing and Services data, New Home Sales and a speech from FOMC (Federal Open Market Committee) member and policymaker Robert Kaplan. As Kaplan has recently taken a more dovish stance on the US economy, suggesting that he needs to see inflation improving before he can support another interest rates hike, this speech could cause volatility for USD exchange rates.
However it is towards the end of the week which could arguably bring the most pronounced market movements, during the Jackson Hole Symposium taking place in Wyoming, USA. Janet Yellen, Charlady of the Federal Reserve, will be speaking on Friday afternoon UK time at the conference for central bankers and is expected to prepare the markets for raising interest rates once again. She is also expected give clarity on putting a stop to reinvesting the stock of bonds purchased under the FED’s Quantitative Easing programme, potentially in October.
All of these topics have the potential to cause large swings on the US Dollar’s value, and if Yellen suggests that an interest hike will be happening soon, investors could move their funds into the USD for higher returns on investment, potentially strengthening USD/GBP to 1.25 which hasn’t been seen since April. During market volatility, Limit Order contracts are an excellent tool available to our clients, as you determine the rate you wish to purchase your currency at, and our systems automatically book this as soon as it reaches this level. This means that even if the rate hits your desired level only briefly, you won’t miss out on achieving this.
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