This US Dollar 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 US Dollar when buying £200,000 at the high compared to the low for the past month.
|Currency Pair||% Change||Difference on £200,000|
Following the onslaught of negative news for the US Dollar, buying the greenback has now climbed to the best levels seen for over 18 months.
Buying £200,000 worth of US Dollars now gets you $7,750 more compared to just a week ago, $16,500 compared to a month ago and nearly $25,000 compared to three months ago.
Levels centrally are now over 1.43 remembering that within 6 months of the Brexit vote rates fell from 1.49 to 1.20. A stark difference which really highlights how much less costly things are now for people importing anything from classic cars to paying for a holiday state side.
The news about the government shut down has been a recent driving factor for the USD. With President Trump failing to avoid the temporary shut-down there has been further calls of him failing to meet campaign pledges. In real terms he has managed to pass tax cuts and indeed reduce the Obama care bill but otherwise has many tasks left on his to-do list. These on-going negotiations to extend the budget and avoid a shut-down are likely to run to the wire with President Trump likely to have to pick between the 700,000 illegal immigrants that he wants to remove and the wall between Mexico and the US.
This is a story which is likely to continue to run and one to watch if you have USD exposure. More instability seems likely which could weigh on the value of the Dollar further.
This week Jerome Powell has been approved as the next Federal Reserve head. Mr Powell was Presidents Trump’s choice in November and will replace the current chair lady Janet Yellen on the 2nd February. Mr Powell is seen by the market as a safe pair of hands which will likely continue the policy in place on interest rate change, which is being driven by growth; wage and unemployment data along with domestic debt levels. Currently two further interest rate hikes are expected in the US and the potential time frame of a future hike will remain a driving factor for the greenbacks price.
Generally I see GBPUSD rates remaining under pressure, but think there will be a correction and buying USD will get more expensive before the weekend. President Trump attends Davos on Friday, this is a key day to watch. We also have Labour data this afternoon being released along with GDP figures tomorrow. As a result if you are buying USD you may want to take advantage of these current levels.
For more information on how future data releases could affect your USD requirement, call our trading floor on 01494 725 353 or email me here.
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