US Business and Consumer confidence data disappoints

Yesterday provided one of the first glimpses into how business and consumer confidence has been affected since Donald Trump became president. The Chicago Purchasing Managers Index showed that conditions had deteriorated across Illinois, Indiana and Michigan, and overall Consumer Confidence in January also fell. As a result of this, the Dollar fell against all of its major counterparts during yesterday afternoon.

Also taking into account that on Monday evening Mr Trump fired his Attorney General Sally Yates, because she disagreed on his order on immigration, it would seem that Trump’s unorthodox approach is deterring investors. Since his inauguration on 20th January, the Dollar has fallen by 3 cents against the Pound, making a £200,000 transfer almost $6,000 more expensive.

Will the FED raise rates so close to Trump’s appointment?

The Federal Reserve will announce their Interest Rate decision at 7pm this evening, the first since they announced that they intended for an additional 3 Interest Rate hikes this year. However, it is expected that they will keep rates on hold at 0.75% on this occasion, while the bank awaits further information on Donald Trump’s future economic policies. Trump has already promised a range of policy changes, including tax cuts and renegotiation of trade deals, which could dramatically affect the US economy, but is yet to provide further information on his plans.

However, Janet Yellen only spoke last week hinting that as employment levels are at their best, if the FED don’t act soon and raise Interest Rates, Inflation could have a negative effect on the economy. Reuters economists have ruled out a hike on this occasion, but any further hints to future plans during their Policy Statement could create further volatility for the US Dollar.

As this announcement is released outside of trading hours, a Limit Order could be a suitable option for any clients with a specific exchange rate in mind. This allows us to automatically purchase your currency the second it reaches the level you require, so you don’t miss out on any spikes worth taking advantage of.

Trumps unpredictable nature may continue to cripple the US Dollar, feel free to get in touch if you have a US Dollar requirement and would like to learn more about the different contract options available to you in the event of further movements. Call today on 01494 725 353 or email me here for more details.


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