The Dollar has remained fairly range bound against its major currency counterparts so far this week, as mixed housing levels coupled with relatively disappointing services data did little to keep the greenback on the front foot. Further detail on recent economic data releases and their impact on the US Dollar in today's USD market report. The table below shows the range of exchange rates for the past week, showing the importance of timing your transfer to maximise your return.
|Currency Pair||% Change||Difference on £200,000|
The latest Markit PMI reading did come out higher than expected however which suggests optimism in the manufacturing sector is holding up well despite the ongoing trade fears intensifying.
The release backs up the Fed Chair Jerome Powell’s recent optimism about US growth despite risks associated to US trade wars, with consistent investment levels, near perfect labour market conditions and inflation well on course to hit the Federal Reserve’s 2% target being the main drivers. It will be interesting to see how the markets react to this afternoon’s new homes sales figures. If yesterday’s average price drop is reflected in today’s reading, the markets may well pull off the Dollar slightly. Given how often the Fed use the Housing sector as a gauge for future economic stability, there is every chance the Greenback will end up cheaper to buy as the day goes on.
An interesting equation for dollar holders to consider at the moment is the Trump Administration’s constant push for a more productive, self-sufficient United States and the long-term consequences this may hold for the Greenback. The open criticism of the Federal Reserve’s aggressive stance on monetary policy may well explain some of the market’s reluctance to fully back the Dollar.
Of course, the ever-escalating trade wars remain the main concern for global markets and may also explain the restricted movement from the greenback at present.
As the Trump administration continue to confidently pursue their Tit-for-tat strategy when negotiating with China and Europe, investors seem to be holding back before committing to the dollar further which makes moves below the 1.30 seem unlikely for now. Having said that, the Federal Reserve seem to be showing no signs of succumbing to the President’s calls for a slow down in rate hikes.
Friday’s GDP is expected to justify the Fed’s optimism and will likely trigger further demand for the dollar. There is every chance cable could be testing 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.