This update examines factors that could affect US Dollar exchange rates this week, the table below shows the difference in USD over the past month you would have achieved when buying £200,000.

Currency Pair% ChangeDifference on £200,000
GBP/USD3.0%$7,600

DUP deal makes the Dollar cheaper

The GBPUSD rates started the week strongly following the speculation that a deal would be agreed between the Conservatives and the Democratic Unionist Party (DUP). This was confirmed in the afternoon however the details on the financial cost are yet to be released. This has gone some way to weaken the concern that the Conservatives could lose the vote on the Queen’s speech on Thursday which Theresa May’s Government need to pass. GBPUSD rates now sit at over a one week high however they are still 2 cents lower than pre-election levels, representing the risks that are still present in Westminster.

US FED forecast

The value of the Dollar will continue to be driven on speculation around future interest rates hikes in the world largest economy. The latest news on this was over the weekend when one of the central bank’s presidents, John Williams, gave a speech. Williams suggested that there would be further rises, which increased the odds of a third hike taking place during 2017. Currently however the market is still unsure. Only last week US inflation fell which is a key driver for future hikes.

Economic data at forefront for USD buyers

Yesterday the US released their Durable Goods Orders figures. This showed a surprising fall and helped give GBPUSD traders a better level still.

Today there is a speech by Janet Yellen (FED Chairlady) in London. This is expected at 6:00pm and has the potential to drive market values for Wednesday morning. Generally she is expected to remain positive about the US economy and shorter odds on further interest rate hikes this year. As a result GBPUSD buyers may want to take advantage of the current levels available today to avoid the risk, USD sellers may wish to wait to take advantage of any gain tomorrow.

Thursday also sees the latest GDP figures being released for the US. This is expected to show growth of 2.2% which will probably result in yet more gains for the USD making it still more expensive as we end the week.

Generally I see the best levels for GBPUSD buyers at the beginning of this week and expect only USD sellers to wait.

Thank you for reading my US Dollar report, if you have any queries about how your upcoming transfer might be affected please feel free to get in touch 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.