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 in just a month affecting US Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The US Dollar took a hit against Sterling yesterday, with the greenback falling below 1.32. The driving force behind this drop and yesterday’s main talking point, was a report regarding an ex-aid of President Donald Trump. Paul Manafort, Trump’s ex campaign manager has been charged with tax fraud and conspiracy to launder money. These accusations date back to Manafort’s dealing with the Ukraine and whilst President Trump was quick to point out that these charges were made a time prior to his involvement with his election campaign, it is hardly an association the President will welcome.
Trump and controversy seemingly go hand in hand and whilst there is no direct link to the President in terms of his involvement, his detractors were quick to point out the association and the USD has suffered as a result.
The greenback had made significant strides forward over the past few weeks, with the US economy performing well and talk of another prospective interest rate hike by the US Fed driving investor confidence up.
However, this latest controversy, whilst not directly affecting the US economy, could derail any such confidence and once again Trump’s establishment is under scrutiny.
Personally, I do not feel this blip will have any long-term effects on the value of the USD and therefore those clients holding Sterling may have been presented with a window of opportunity.
Whilst it is unlikely that the FED will raise interest rates at this Thursday’s policy meeting, another hike, possibly in December, is a strong possibility.
Any indication that this is likely to happen will only strengthen the greenbacks position in my opinion and with the US economy performing well, especially during the second half of this year, expect the USD to strengthen against Sterling should the prospective rate hike occur.
Add to this the on-going uncertainty surrounding the UK economy and I would not be gambling on any aggressive moves for Sterling up to, or through 1.35.
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