The Pound has been gaining vs the US Dollar since the beginning of the year as the US shutdown continues to drag down the value of the US Dollar. The shutdown is approaching its fourth week with no signs of this being resolved at the moment.
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President Donald Trump remains at a stalemate with Congress over his insistence that they provide him with the means to build the wall between the US-Mexico border, which was one of his election pledges.
It has been suggested that Trump could end up subverting Congress by initiating a ‘national emergency’ but he has said he wants to avoid this from happening.
However, if things carry on he may indeed go down this path which can only have a negative effect on the value of the US Dollar and could this provide the Pound with some better opportunities vs the Greenback?
However, as and when the US shutdown finishes which will happen in the near future this could erode any of Sterling’s gains vs the US Dollar so if you’re thinking about buying US Dollars it may be worth taking advantage of these recent spikes with GBPUSD exchange rates currently at their best level to buy US Dollars with Pounds in two months.
Since the summer, Chinese goods entering the US have been hit with $250bn of tariffs whilst China has hit back with US$110bn on US goods during the same period. However, recently Donald Trump has suggested that ‘I think we are going to be able to do a deal with China.’
At the moment Trump has vowed to increase tariffs on a further $200bn worth of Chinese goods and services coming in to the US and if China is unwilling to sort out the problems with intellectual theft as well as other terms then the US will be left with no choice but further tariffs.
As we have seen since Trump came in and the recent issue with the US Government shutdown the President is very strong willed and can be difficult to deal with so if things don’t get sorted then the issue will remain ongoing.
At the moment there is a 3 month truce between the two nations so make sure you keep a close eye out on further negotiations over the next few weeks and the impact on GBPUSD exchange rates.
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