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 USD rates when buying £200,000 during trading hours on Tuesday:

Currency Pair% ChangeDifference on £200,000
US Passes COVID-19 Relief Bill

FED anticipating several rate hikes through 2018

The Chairlady of the Federal Reserve, Janet Yellen has indicated there is the strong possibility of a rate hike in December and several throughout 2018.

The US economy is performing across the board apart from a stutter in recent non-farm payrolls. This bodes well for the US dollar and as these rate hikes become more apparent expect the dollar to strengthen.

I am slightly sceptical about how many hikes we will see see in 2018 as we have seen similar optimistic forecasts in recent years and the hikes failed to materialise. In previous years economic data was not as strong.

I am of the opinion there is a very high probability of a rate hike in December although this I would expect to be largely filtered into current exchange rates.

FED Beige Book

The Federal Reserve Beige book reports are released today. The Beige book reports on the current US economic climate through information gathered from the twelve Federal Reserve districts. It gives a picture of overall economic growth. If predictions are optimistic expect investor confidence to grow and intern US dollar value.

FED speeches could give further indications to US interest rate strategy

Throughout the week we will see several speeches from key Fed members such as Steven Kaplan, president of the Federal Reserve Bank of Dallas and Willian Dudley the president of the Federal Reserve Bank of New York. Although these speeches could influence US dollar value, Yellen’s speech on Friday evening would be the one that traders will be anticipating. If she gives any further hint to interest rate strategy expect volatility on GBP/USD.

If there fails to be any real clarity on the Brexit situation and Theresa May's position remains unstable I see little chance for Sterling strength against the Dollar. The US economy is going from strength to strength and if I had a USD requirement I would take the safe option and take advantage of current levels.

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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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.