The Pound vs US Dollar has remained in a relatively tight range recently and since Article 50 from last week there has been little movement on the currency pair.
With US Non-Farm Payroll data due out this afternoon at 1:30pm as well as Average Earnings we could see the Dollar make some gains vs the Pound. Unemployment data in the US has been very positive recently and seemingly since Trump came to power the American economy has been going from strength to strength. Therefore, this is why I think we’ll see further Dollar strength towards the end of this afternoon.
The Chinese President Xi Jinping will continue his meeting with Trump and at stake is the future of trade between the US and China. With Trump already rather frosty with Angela Merkel and the Egyptian President the markets are hoping that this particular meeting will go well.
In 2016 the US imported $480bn of goods and services from the Chinese, which allows the price to remain low for the American market. However, the US only sold $170bn worth of exports to China.
The inequality of the deal means that China forms the largest part of the US trade deficit which is approximately 60% of $500bn.
Trump has been rather outspoken in recent months that the Chinese have been taking amounts of money and wealth from the US and not returning the favour in the same proportion.
Fifteen years ago US manufacturing accounted for almost 17 million jobs to just 11 million now and some have suggested that almost 40% of the job losses during this time can be attributed to Chinese imports.
Trump has suggested in his campaign that he may impose a 45% tariff on Chinese goods coming into the US but personally I would be amazed if any tariff is imposed at all. I think the talks are likely to go well as although Trump has been rather controversial especially when it comes to trying to impose some of his executive orders I think on this occasion the talks will be smoothly.
Therefore, if you need to buy US Dollars in the short term it may be worth organising this sooner rather than later. Call us on 01494 725 353 or email me here to get a free quote.
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