This 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 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
Pound to US Dollar at 3-Year High

Will the Dollar continue to strengthen against the Pound?

The US Dollar has started to perform very well during the last month against both the Pound and the Euro. The US Dollar is currently trading at its best rate to buy Pounds in 4 weeks. US economic data has been strong which has given support to a potential interest rate hike in the US before the end of the year. Another interest rate hike would make it a total of 3 rate hikes this year and could see USD rates end the year on a high. Crude oil prices have risen recently and this has also helped the USD to strengthen. Added to this, chances of a Fed rate hike have increased after the House passed the Budget resolution on tax cuts on Thursday which has seen GBPUSD rates drop to just above 1.30 on the Interbank level.

The impact of US Non-Farm Payroll data on GBPUSD exchange rates

The Dollar continued to strengthen vs the Pound on Friday afternoon after the US published the latest set of Non-Farm Payroll data as well as the latest set of US Unemployment figures. Despite the fall in in new jobs caused by the recent hurricanes US unemployment is now at its lowest level since 2001 and wage growth has hit 3%. This proves that the American economy is working well and give further support that the US are ready to raise interest rates.

Fed Chairlady Janet Yellen sees wage growth of 3% as healthy for the US and in my opinion I think an interest rate hike before the end of the year is justified. Therefore, if you’re thinking of buying US Dollar it may be worth getting something organised in the short term

On Wednesday the latest set of minutes are due to be released by the FOMC. The votes have been split recently so if we see more appetite for a rate hike coming then I would expect to see the Dollar strengthen even further against the Pound. Not only has the Dollar gained against the Pound but it is also the highest rate to buy Euros since July.

If you are planning a foreign currency transfer then contact your account manager here to discuss the options open to you. Indeed, if you’re planning to sell US Dollars but don’t have the full availability of funds then speak with your account manager about how a forward contract may work for you.

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.