This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received in Dollars when buying £200,000 at the high compared to the low during the past week.
|Currency Pair||% Change||Difference on £200,000|
The Dollar has made slight recovery today following Friday's slides, which saw the GBPUSD rate climb to 1.32, the Dollar index dropping to its lowest level since January 2015 and fresh reasons for investors to hold off investing in the Dollar for now. Today seemed to be a slightly different outlook as the recent Hurricane Irma was downgraded to a level one category. Never the less, the effect of Irma and Harvey have been devastating and the full effects are yet to be known. Reports regarding Jobless claimants rising in the US are likely to have an effect on the economy, as Irma has left some 3 million people without electricity and caused a number of deaths. Foreign Currency Direct extends our thoughts to everyone affected.
The dollar also benefitted slightly yesterday morning as the weekend saw no long range nuclear tests as initially thought for North Korea, easing the prospect of war for now and helping investors to return to the USD helping its value rise for now.
The Dollar’s recent strength has been for a number of reasons, one of which is positive tone when it comes to raising interest rates. However, recent polls have put a rate hike in December’s meeting at 26.4%, adding to the dollar’s weakness of late. The two hurricanes of late have done little to warrant a rate hike this year as Wells Fargo braces itself for losses in the region of $60 following claims.
On top of this, Fed vice Chair Fischer stepped down last week due to personal problems, whilst questions now start to be asked who the next Fed Chair will be after Yellen steps down. Normally this results in a wait and see attitude from other members, which means the Fed is likely to act in 2018 according to reports. For this reason, I would expect the dollar to remain under pressure until this is clarified and the full extent to the damage on the economy is known, keeping GBPUSD above $1.30 for now.
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