Last week showed a rise in US consumer prices coupled with a 6-year high in the Federal Reserve’s ‘Personal Consumption Expenditure’ index - a steady rise in inflation Stateside – which keeps the Fed’s plans on track to raise interest rates twice more before the end of the year according to reports. The USD report below looks into the link between positive inflation data and the increased likelihood of a rate hike. The table below shows the difference in return you could have achieved when selling £200,000.00 during the past month depending on the exchange rate at the time.

Currency Pair% ChangeDifference on £200,000
GBPUSD2.8%$7,546

Central Banks monitor inflation closely. If inflation is seen to be evident and moving beyond a certain target, then interest rate rises are used to counter the increase in prices felt by consumers.

Buying the USD continues to get more expensive

NATO – UK – Russia Tour

Trump claimed the latest NATO summit a success as other nations supposedly committed to increase their financial contributions towards the alliance.

His UK trip also seems to have been positive. Trump’s praised some who potentially pose a threat to May’s leadership, made inconsistent comments regarding the Prime Minister, met the Queen and capping the weekend off by playing some golf and attending to business interests in Scotland.

There are a lot of US-allies in Europe will fear that Trump’s European tour is going to end in handshakes with Putin and backslaps from the Russian President.

Trump’s tendency to threaten his allies and play nice with his enemies or “competitors” has seen an increased sentiment within Europe that they should hit back. Even if they reciprocate trade tariffs against the US, the uncertainty is likely to see the Dollar strengthen as investors move their money to save-haven currencies.

Donald Trump and Vladimir Putin will meet in Helsinki today to discuss Syria, conflict in Ukraine and the future of nuclear weapons. Expectations for concrete agreements and real progress are rock bottom - the focus looks most likely to be on optics moving forward. Both Presidents are seeking to establish a bilateral relationship from a standing start.

Retail Data to start week

Any speech or press conference from Helsinki has the potential to cause a stir and worth keeping an eye on for clients with an upcoming Dollar requirement.

Today at 12:30, the US Census Bureau will release the month on month Retail Sales ex Autos figure for June. This data shows all goods sold by retailers - except the automobile sector - based on a sampling of retail stores of different types and sizes. The 0.4% is down from May’s 0.9% however still represents positive economic growth for the US, so the Dollar could strengthen.

Cable will be affected by Jerome Powell’s – Chairman of the Federal Reserve – speech at 14:00 on Tuesday. His remarks give insight to US monetary policy and will contribute to sentiment and have the potential to move rates in your favour and against you.

If you would like any assistance with your upcoming currency requirements – we are only a phone call away and are happy to help. Please get in touch 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.