US President Donald Trump was back in the spotlight this week as he told the media that he had reached an understanding with the Mexicans, which in turn could shape what the North American Free Trade agreement looks like in the years to come. However the President stated that the trade deal should now be called “the United States-Mexico trade agreement” which will certainly put pressure on the Canadians. More information on how the outcome of this key trade deal could impact the Dollar is below. The table that follows shows the range of exchange rates for the past 30 days, and the difference in return you could have achieved when selling £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
The NAFTA arrangement which has been running since 1994 has been described by Mr Trump as the worse trade deal in history, however the arrangement sees mutual trade of one trillion Dollars a year, which just shows how important it is for the US, Mexico and Canada. The President believes that jobs are sent overseas especially in the car industry due to the cheap labour elsewhere. This story will continue to have an impact on US Dollar exchange rates and if a deal is reached I expect the US Dollar will strengthen as the uncertainty is released.
However it’s not all positive news for the President. In the background his Ex Lawyer Mr Cohen has pleaded guilty for tax evasion and finance violations which link to the 2016 Presidential campaign.
If in the weeks to come the President gets dragged into the scandal and finds himself in court, I expect this could have a negative impact on the value of the US Dollar. If I were selling US Dollars short term there is an argument not to take the risk especially if you are buying Sterling as exchange rates are at a 12 month high.
It’s a quite week for economic data. The only important release to look out for is todays GDP numbers at 12:30. The Annualised numbers are set to fall to 4% from 4.1%. Nevertheless this is still an incredible GDP figure in comparison to other leading nations around the globe. If we see 4% I expect the US Dollar could strengthen slightly.
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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