This US Dollar forecast discusses the factors that could affect USD 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 when converting £200,000 Pounds to US Dollars at the high compared to the low during the last 30 days. To keep track of interbank exchange rates visit our live exchange rates feed.

Currency Pair% ChangeDifference on £200,000

Will the US Dollar strengthen against the Pound?

With the US Federal Reserve having increased interest rates last week as expected the question is now how many more will we see during the course of this year? This is the second interest rate hike we have seen this year as the central bank raised its rate to 1.25%. This is the highest level seen since 2008 when we were at the height of the credit crunch.

US jobs data as well as GDP has been maintaining strong levels in recent months and I think we could see further interest rate hikes this year. This is part of the reason why the US Dollar has been performing so well against both the Euro and the Pound and could continue to do so.

Some rumours are that the Fed’s target level could be as high as 3% but I think we’re a long way from that happening anytime in the near future.

The decision last week was for a 8-1 vote in favour of increasing interest rates and the only other member not to want one was Neel Kashkari who is the president of the Federal Reserve Bank of Minneapolis. The current expectation is for another 3 rate hikes this year and as long as inflation does not fall too far below its target level I think the Fed will continue to tighten. Therefore, another reason why I think the Dollar will maintain its position as one of the strongest currencies during 2017.

On Thursday of this week Initial Jobless Claims are released for June. The data measures the number of people filing first time claims for unemployment benefits. The expectation is for 240,000 so anything different is likely to cause movement for GBP/USD exchange rates.

We end the week with both Services and Manufacturing PMI data for June. Both sets of data have been relatively strong in recent months and the expectation is for 53 and 53.8 respectively. Anything above 50 represents growth and I think this will support the recent decision made by the Federal Reserve to raise rates last week. Therefore, I expect to see further Dollar strength against Sterling so if you need to buy US Dollars it may be worth organising this in the short term.

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.