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 in US Dollars you would have achieved when buying £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000
Mixed US housing data

Inflation levels cancel out the dollar’s gains

Yesterday proved very volatile for USD exchange rates as the dollar made considerable gains against the Pound following a flurry of positive economic data released in the morning, before retreating entirely by the end of the afternoon as disappointing Inflation figures sapped investor appetite. This all culminated in a spread of 0.4% or a difference of around $1,500 on a £200,000 and just shows the importance of being in regular contact with your account manager who can act as your eyes and ear on the market.

Employment and average earnings ( 0.5%) both came out surprisingly better than expected which bodes well for long-term stability in the US.

However it was the Personal Consumption expenditures release, a favourite of the Federal Reserve to monitor inflation levels, which remained unchanged at 1.5 % leaving many disappointed as it leaves the Fed Chair Janet Yellen yet another reason to push back raising interest rates despite all of the positivity coming out of the US recently.

Today’s key trading opportunities

If yesterday was anything to go by, there are a number of releases that could create similar volatility for Dollar exchange rates. Today we have even more insight into employment levels and wage growth with Non Farm payrolls and average earning levels to be released early this afternoon. If we see a rise reflecting the releases from yesterday’s trading, I would expect the USD to strengthen, making it more expensive to buy. If you have an immediate Dollar requirement, it may pay to get in touch with your account manager before this event.

Long term strength for the Greenback

Looking long term, there is very little in the way for the USD to enjoy sustainable growth over the pound. A main anchor recently has been the markets lack of trust in President Trump’s ability to fufil the ambitious promises he confidently spread during his winning campaign last year. Yesterday however the Trump administration confirmed it will be committing to terminating the DACA (Deferred Action for Childhood arrivals) equating to an estimated 17.2 $BN investment. It has been a controversial issue which involves deporting nearly 1.6 million people and although somewhat unsavoury, there is a good chance the markets will react positively as a result. If Trump can get this through, what else can he get passed?

With very little grounds for a sterling recovery anytime soon, I can certainly see the greenback making a move back down towards the 1.25s, If I was looking to buy dollars, I would be looking to do it sooner rather than later.

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.