With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The table below shows the difference you would have received during the high and low points of the past month when buying £200,000.00.

Currency Pair% ChangeDifference on £200,000
GBPUSD3.92%$10,240 USD
UK looking to the US for post-Brexit trade deal

US dollar strength comes back into play

An interest rate hike in the US seems more likely, as global growth and US economic indicators continue to point to conditions acceptable for the Fed to hike for the 3rd time this year. Whilst there are numerous ongoing concerns that could derail this prospect the US dollar has strengthened against the pound and the Euro as this becomes more likely.

The key piece of news which could upset this current trend would be Friday when we have the first estimate of Q3 US Gross Domestic Product (GDP) due at 13.30. This will more than likely be a very volatile release owing to the as yet unknown economic effects from Hurricanes Harvey and Irma.

With damages yet to be fully known but reported estimates in the $150-$200 bn range, there is great scope of knock-on effects for the economy. Consumers and business will have been unable to work and there will have been widespread disruption.

With it being very difficult to assess the impact of the weather on the economy, and the data released, Friday could be a volatile day for the US dollar. With the US economy roaring ahead at 3.1% last quarter, it would take a severe knock to put the Fed off in my opinion. Overall a stronger US dollar off this release looks likely but the greenback has a big hurdle from global events to overcome first.

Global events always a factor for the GBPUSD exchange

Thursday sees the European Central Bank release their latest interest rate decision and is the biggest news this week on financial markets. It is important for the US Dollar since any big swings on the Euro will affect EURUSD. It is widely expected the Euro could strengthen which would see a weaker dollar against the pound.

This is not a guarantee however since much of the Euro’s strength has already been priced in, if the ECB disappoint we could see a big swing the other way and the US dollar would strengthen, making buying US dollars with Pounds more expensive.

There is still uncertainty over North Korea with Donald Trump telling an interviewer he is ‘prepared for anything’. The US dollar is a safe haven currency and can strengthen in times of global uncertainty.

Donald Trump is always waiting to grab a headline or tweet along the line. His tax plans and choice of the next Fed chair are all receiving scrutiny at present. GBPUSD has been holding above 1.30 for 6 weeks but this level could be under threat in the coming weeks if the Bank of England fail to live up to expectation as they have so often in the past.

With a busy week ahead of important data and events if you have any GBPUSD exchange to consider make sure your account manager is aware of your situation to update you on progress.

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.