This US Dollar report will address the factors that could have an effect on exchange rates over the coming months. The table below looks at the difference between the rate you would have achieved in Dollars when purchasing £200,000.00 at the low and high levels during the past month.

Currency Pair% ChangeDifference on £200,000
GBPUSD2.3%$6,200
Trump’s Tariffs could cause US Dollar weakness

Dollar gains as Fed policy maker hints at further rate hikes

The past month has seen the USD weaken dramatically against the Pound, but it showed signs of recovering some of its losses at the beginning of this week, following an interview with one of the Federal Reserve's 'interest rate setters' in which he said that he felt there could be as many as three interest rate hikes in 2018. In an interview with CNBC San Francisco, Fed Chief John Williams stated that he believes the economy is strong enough to cope with further hikes this year, especially when coupled with the tax cuts being introduced for individuals and corporations which means that they will be in a better position to cope with higher repayment and borrowing costs.

There are speeches from two more Federal Reserve policymakers on Wednesday this week, so anyone with a USD requirement would be sensible to keep an eye on any of the fall out as their comments have the potential to impact on the Dollar's value.

If this were to be the case throughout 2018 then it is likely that we would see a bout of USD strength, with investors seeking the Dollar for higher returns, but as we saw in 2017, even though the Fed raised rates three times, the Dollar still struggled.

Later this week on Thursday and Friday there are two sets of data that are closely watched by policy makers when determining fiscal policy, and these could therefore give an indication of how likely the Fed are to raise rates in the short term. Jobless claims looks set to show a fall on Thursday whilst inflation figures for Friday are also predicted to highlight a fall, and if that is the case then we could see some Dollar weakness and some spikes to take advantage of for USD buyers as this would likely reduce the chances of a rate hike in the near future.

Trump hits the headlines once again

Donald Trump is once again making headline news this morning after being mocked by TV viewers for forgetting the words to the national anthem at a College Football game, once again sparking debate over his mental health. Trump has previously been critical of American Football players for ‘disrespecting’ the national anthem and received a mixed welcome from fans, with many booing and jeering him as he walked on to the field. As we have seen in recent weeks, especially with quotes from the controversial ‘Fire and Fury’ book being released, Trump’s actions have been heavily scrutinised by investors and are having an impact on exchange rates. To keep up to speed with all the latest news make sure to keep in touch with your account manager here who can act as your eyes and ears on the market.

Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me at rjh@currencies.co.uk.

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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.