This week we have US GDP figures for Q4 in 2017 today, and UK GDP release on Thursday. UK figures are expected to improve, which could strengthen GBP against the Dollar. This market report looks at the factors that could affect USD rates in the coming months. The table below shows the difference in US Dollars you could have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
The US Dollar strengthened against the Pound throughout the course of yesterday’s trading, with GBP/USD falling from almost the highest level seen since the UK referendum in June 2016 first thing yesterday morning. This was due to a combination of factors, but mostly due to fears over a trade war between the US and China diminishing.
China has responded to Trumps initial $60bn in proposed tariffs with a retaliation of $3bn in tariffs, which demonstrates that China are not looking to pursue a trade war with the US. There have also been reports this week that talks to strengthen access to Chinese markets for the US are underway, which has eased investor confidence allowing them to comfortably move their funds back into the US Dollar.
Although this week is a short trading week due to Good Friday, there are plenty of influential data releases to watch out for over the next two of days which could create volatility for GBP/USD exchange rates. Today at 12.30pm sees the release of US Gross Domestic Product (GDP) figures for the last quarter of 2017, along with Core Personal Consumption Expenditures which gives an average value of the amount consumers spent on goods and services, again in the final quarter of last year. The same data, although this time for February, is also released tomorrow at 12.30pm
Expectation is for GDP figures to impress, with markets expecting a rise from 2.5% to 2.7%, however if this isn’t the case we could see GBP/USD push back into new highs of 1.43, which hasn’t been seen since June 2016.
Thursday will also be key to determining GBP/USD rates as UK GDP figures will be released at 9.30am, and are also expected to show an improvement. Clients looking to sell US Dollars for Sterling may wish to move ahead of these announcements to limit themselves from any further losses.
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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