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 during trading yesterday affecting your US Dollar return when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBPUSD1.6%$4520
Trade Tariffs Continue to Impact on the Dollar

USD Strength on Positive Data

The US Dollar has found additional support after a strong week for Dollar exchange rates following the stock market crash at the start of the week which saw the worst sell off in 6 years.

US jobless claims yesterday arrived considerably better than expected which reinforce the view that the Fed will look to continue raising interest rates this year. In fact, the numbers claiming for unemployment benefit fell last week to the lowest levels in almost 45 years. The strong data suggests that the unemployment may have further to fall and that wage growth may start climbing faster, an issue which has been of concern for most central banks.

Clients looking to buy Dollars with Pounds may wish to act sooner rather than later to take advantage of what are still much better levels than what have been available.

As such the Dollar for the moment could see a period of strength as those rate expectations become more embedded and funds move out of equity markets and commodity currencies and back to the safety of the higher yielding US Dollar. Yesterday saw another bad day for US stocks whilst Asian markets have dropped considerably this morning.

The Dollar has avoided coming under further pressure after the US government shut down briefly overnight. After a shut down for hours rather than days the senate approved a two year budget in the early hours of this morning which should now be positive for the Dollar.

Fed Direction and the Dollar?

Minneapolis Fed President Neel Kashkari spoke yesterday and voiced concern about raising rates too early asking the question “Why cool the economy down”. His words will be of interest to President Donald Trump but it remains to be seen how the New Fed Chair Jerome Powell will influence policy at the Fed. Many believe he will follow the path that Janet Yellen has set.

US data is light today with the Baker Hughes US oil rig count so focus moves to inflation data next week which the Fed will be watching very closely. Any significant rise in inflation is also likely to see more issues with the stock markets which may impact on some of the commodity currency pairs such as USD AUD and USD NZD.

Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. Feel free to e-mail me at jll@currencies.co.uk.

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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.