This report addresses the factors that are likely to affect exchange rates in the coming weeks, if you are buying abroad or making a currency transfer. The below table shows the market movements for a GBP/USD for the year to date.
|Currency Pair||% Change||Difference on £200,000|
Last month the Pound to US Dollar exchange rate hit its highest level in 8-months, although since the UK general election polls showed a declining lead for the Conservative party we’ve seen cable lose a few cents.
At times it appeared that the Pound would consolidate above this level, as pressure mounts on the Fed Reserve Bank to carry out its planned additional 3 rate hikes this year and the Trump Train has come to a standstill. Moving forward I think we could see the Pound continue to come under pressure as Brexit negotiations continue, and I wouldn’t rule out a move back into the early 1.20’s once again should the Labour Party manage to pull off a shock victory in this month’s election.
Irrespective of where the rate ends up towards the end of the year, cable is currently up by 4.5% so far this year, making a $200k house purchase over £7000 cheaper.
Sterling sellers are still able to enjoy some of the best rate seen for GBP/USD since the Brexit vote was announced so if you’re planning a dollar related transfer in the short term future, it’s worth getting in touch to potentially put together a strategy using one of our many contract options.
At 1pm today we’ll see the release of both Unemployment and Non-Farm Payroll data, offering us with an insight into the US jobs markets outside of the agricultural sector. The Non-Farm Payroll figure is expected to show a drop in new jobs (185k) so expect a better than expected figure to result in further Dollar strength. I would also suggest trading around this event rather than during it, and feel free to get in touch if you wish to discuss why.
Late last night Donald Trump announced that the US will be pulling out of the Paris Climate Agreement, much to the dismay of the international community. The agreement aims to address the issue of rising temperatures globally and limit greenhouse gas emissions along with helping less developed nations with the financing involved in the issue.
Whilst the US coal industry backed the move, the UN have labelled it ‘a major disappointment’ and the EU said it was ‘a sad day for the world’. Trump claims the agreement would have cost the US $3tn in lost GDP and 6.5 million jobs.
The Dollar was mostly unaffected in the wake of this decision and a white house spokesman has claimed the US removal could take up to 4 years to complete.
Thank you for reading my US Dollar report, if you have any questions about exchange rates I would be more than happy to discuss them – you can contact me here.
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