As further sanctions are placed on Russia by the US following accusations of a cyber attack on the US, the Dollar stands to benefit from the global uncertainty caused as a safe haven currency. The table below shows the difference in USD you could have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
Last night we had the US raise interest rates which was widely expected. It was the commentary which followed the decision which had a larger impact on the value of the USD. The information shared thereafter gave more information on the prospect of future interest rate hikes which were less positive than previously thought.
This contraction in hike forecast had a negative impact on the USD making it weaker and therefore cheaper to buy. GBPUSD rates have now spiked to the highest level over the last 30 days and now sit within a cent of the highest level seen in 15 months.
Along with the recent sanctions going into effect on Russia from the UK after the proclaimed chemical attack on UK soil, the US has also introduced a further round of their own sanctions.
The US accused Russia of cyberattacks on main US infrastructure as it unveiled a series of sanctions. After Putin's recent re-election many expect this form of political bullying to continue.
Global uncertainty normally has an impact on the value of the USD due to its safe haven status meaning that if tensions continue to mount between the US and Russia, the knock on affect could result in the US Dollar becoming more expensive to buy.
The strength of the USD has been linked to both political updates and the strength of the world's strongest economy. Politically there have been growing concerns about the government in power with yet more high ranking changes in position.
President Trump named Larry Kudlow, a TV pundit and former chief economist at Bear Sterns, as his new principal economic advisor this week. Since President Trump entering the White House over 35% of his staff have now changed, all within the last year.
Economically however, the US has been growing and growing. Confidence among US CEOs hit a 15-year high in February following the introduction of tax cuts by President Trump administration plus US consumer sentiment rose to a 14-year high in March.
Later today we have the latest Jobless figures from the US and Service PMI. Both are expected to show a slight contraction. We end the week with House Sale figures which will probably show a slight improvement.
Generally as the US central policy continues to suggest interest rates hikes are on the horizon I expect the value of the greenback to continue to climb longer term. I personally expect GBPEUR rates to reach 1.35 before we reach 1.50.
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.
First class service as ever from Stephen Eakins. Very quick and superb advice!!
Excellent service from Stephen Eakins as always. Manages to achieve a high standard of professionalism and efficiency combined with a friendly approach.
Sending money to France has been so easy. I was amazed at how simple the process was. Steve Eakins is a pleasure to deal with, no fuss or drama just a great, friendly attitude.