The US dollar has improved against the pound during yesterday afternoon’s trading session despite seeing US Industrial Production data coming out lower than expected. Monthly figures showed a fall but increased by 2.8% compared to a year before. Manufacturing data also saw a fall but it appears as though the dollar managed to shrug off any concerns.
|Currency Pair||% Change (Month)||Difference on £200,000|
Global tensions are still evident and this is another reason for the dollar strength of late. Risk appetite globally at the moment is decreasing and as the US dollar is seen as a safe haven currency this is why we have seen the US dollar test the 1.30 region recently.
The recent news from the Federal open Market Committee appears to have adopted a relatively neutral stance as of late but has still suggested that there could be room for further interest rate hikes to come. Meanwhile, other nations do not appear to have much appetite for hiking rates and some are even considering cutting rates so this is another reason why the dollar has been used as the currency of choice in recent times.
Tomorrow afternoon the US will release both US Retail Sales as well as Initial Jobless Claims, a positive release could potentially see further dollar strength and if so this could be the catalyst to send GBP/USD rates below 1.30. Therefore, if you’re considering making a currency transfer then make sure you keep in close contact with your account manager.
In the meantime it appears that Brexit talks between Labour and the government have stalled yesterday afternoon and this is why we saw the pound fall against a number of currencies including vs the US dollar.
In other news US Speaker of the House Nancy Pelosi has been visiting Ireland. She spoke out against the chance of the Good Friday agreement and claimed that there would be ‘no chance’ of a post-Brexit deal between the UK and the US if the Good Friday Agreement breaks down.
Pelosi’s comments have added further fuel to the fire of reasons why not to pursue a Brexit and as time goes on I think we could ultimately see a potential reversal of Brexit but only time will tell.
In the meantime the uncertainty is still causing problems for the pound and this is one of the reasons why the pound may struggle to make any real gains in the short term vs the US dollar.
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