This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during this week.

Currency Pair% ChangeDifference on £200,000

U.S economic data out yesterday

We had a flurry of economic data out yesterday and in all honesty the releases pretty much cancelled each other out.

Inflation was a little higher than expectations but retail sales disappointed so the data ended up having little impact on the strength of the USD.

GBP USD rate hits a 5-week low

Will the Fed raise rates in December for the second year running?

The key date now for those with an interest in Dollars is going to be the Federal Reserve interest rate decision due for release on December 13th.

The Federal Reserve are widely expected to raise rates once again from 1.25% up to 1.5%, making the Dollar an extremely appealing currency for investors.

This will bring the U.S interest rate in line with the interest rate in Australia, so we may start to see the unwinding of carry trades over the coming weeks because of this.

Carry trading is the practise whereby an investor will borrow funds in a currency with a lower interest rate (previously USD) and move them over to one with a higher interest rate, making their return on the difference.

When you start to see investors reversing (or unwinding) these positions then you can see a lot of money flow back the other way, therefore increasing demand in the U.S Dollar and making it stronger and I would not be surprised to see this in the next few weeks.

A higher interest rate will make a currency more attractive and with the U.S being seen as a slightly less ‘risky’ option than the Australian economy investors will be more than likely to opt for the U.S.

U.S data that may impact exchange rates for the rest of the week

This afternoon we have Jobless claims data alongside some import and export price index information, tomorrow brings housing and building starts followed later in the day by the Baker Hughes Oil Rig count at 5pm.

These releases will have a small impact, but I believe that the more likely market movements will come from any comments from the Federal Reserve or Donald Trump, which are generally unpredictable.

For the very latest movements or an up to date exchange rate for GBP/USD feel free to contact us today on 01494 725353 and we will be more than happy to keep you up to date with the very latest action.


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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.