This US Dollar report will examine the factors that could affect 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 in USD when buying £200,000 at the high compared to the low yesterday. For current live exchange rates click here.

Currency Pair% ChangeDifference on £200,000
GBPUSD2.25%$6,100
US Dollar to face volatility due to further trade wars

GBPUSD climbs to near year high

As we start 2018 we have generally seen the value of the GBPUSD climb. Buying $200,000 compared to a month ago is now nearly £3,500 cheaper, £8,000 cheaper than 6 months ago and nearly £20,000 in comparison to 12 months ago. Something worth considering when you are reviewing any exposure you may have to the USD.

The recent gains for GBPUSD have come from both the re-shuffle in government within the UK but also US news. We had news released yesterday from Goldman Sachs which suggested that they think USD would not gain significantly through 2018. These comments weakened the Dollar in yesterday’s market.

Jobless figures miss a beat how does this impact interest rate forecasts?

The latest US jobless figures were released on Friday and showed a surprising contraction in the jobless market through December. Non-farm payrolls report showed that job creation in the US slowed from 252,000 to 148,000. This would have normally resulted in a further fall in value for the USD however the overall US unemployment rate held firm at a 17 year low of 4.1%.

Jobless data will remain key as it is an important barometer used by the FED when deciding future interest rate policy. At this point of the year it seems a lot of speculators and institutional money is being placed on the basis of potential interest rate changes as they hunt for better returns. So the changing views on the amount of hikes that are announced in the US will continue to drive demand and therefore the value of the US Dollar.

A member of the FED, Mr Williams, suggested that the FED would raise interest rates 3 times through 2018, while claiming that the tax reforms would give the economy a boost. He also predicted that employment would fall from 4.1% to 3.7% through 2018. All a very positive outlook.
These changes will continue to drive markets value so something to be aware of when considering any USD purchase or sale.

Changeable forecasts for the value of the USD

There is a host of data for the US through the remainder of the week. We have further FED members speaking today and tomorrow along with jobless indicators tomorrow afternoon.

The main event however to be aware of for GBPUSD movement this week is Friday's data when Retail and Consumer spending figures are released at 13.30. It is expected to show that US inflation slowed from 2.2% to 2.1% at the end of 2017. Anything lower than that could weaken the USD further as it would lessen the likelihood of a US interest rate hike in the near future. Anything above the 2.2% figure however could send the USD higher making it more expensive to buy.

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.