With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The table below shows the difference in USD you would have achieved when buying £200,00.00 during the high and low points of the past month.

Currency Pair% ChangeDifference on £200,000
Federal Reserve hold the US Dollar Key

Will the US raise interest rates?

The US Dollar has continued its recent run of strength vs the Pound following the better than expected US Jobless Claims published yesterday. The employment market in the US has been very strong and has demonstrated resilience over the last few months. This is opening the door for further interest rate hikes ahead, and with the Federal Reserve due to next meet on 1st November I think there is a strong possibility that the Fed will hike rates.

The only stumbling block could be the recent devastation caused by the two hurricanes Harvey & Irma but clearly the economy is remaining strong and therefore there is a strong justification behind an interest rate hike.

Strong US Data helps the US Dollar

The current rate of inflation for the US is 2.2% and with economic growth measured at 3.1% during the second quarter. This has beaten expectations and is the strongest since the first quarter of 2015.

According to the latest Philadelphia Fed Manufacturing Survey the index for manufacturing in the region is now at its highest point in five months highlighting how well things are going in the region. At the same time 39% of firms showed that activity had increased.

Oil prices have also been rising recently owing to the uncertainty in the Middle East which is another positive for the US Dollar and the reason for the continued strength against the Pound.

The US Congress are currently considering placing sanctions on Iran after Donald trump said last week that he is concerned that Iran is not complying with a nuclear accord agreed under the Obama administration back in 2015.

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.