This US Dollar 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 in USD you would have received when buying £200,000 at the high compared to the low this month.
|Currency Pair||% Change||Difference on £200,000|
An article released yesterday indicated that the US economy was not on course for any “bumps” over the next couple of years, despite President Trump insisting that the policies he intended to implement were going to drive the US economy forward. The USD has performed admirably during 2017, making significant gains against Sterling, whilst also fighting back from 10-year lows against the EUR. GBP/USD rates were trading below 1.30 for a significant period of time, hitting 31-year highs earlier this year.
Despite the Pound finding some support around the 1.30 threshold over recent months, it has failed to make any sustainable impact back towards 1.35, as political infighting and a major downturn in the UK economy continues to weigh heavily on any Sterling advances.
Whilst the US economy continues to thrive, much of the good work was arguably done prior to Trump’s appointment as President a year ago. Of course he has been quick to take credit for the recent highs in the US stock market and the booming US economy but does this tell the full story?
It is not necessarily a surprise considering he prides himself on his self-fulfilling prophecies but is he, his tweets and his wish to radically overhaul both the tax and health systems in the US, likely to harm the economy in the longer-term?
The report indicated that in fact it was likely to do neither, with only modest growth expected in the US up until 2020.
It is far more likely however, that his explosive tweets and aggressive stance on potential military action against rival states such as North Korea, could end up derailing an otherwise progressive economy.
Much of the focus over recent months has been on whether the US FED will raise interest rates again this year and it is now widely anticipated that will during their December policy meeting.
This has likely been factored in to the current value on the greenback, at least to some extent, so I would not necessarily expect the USD to spike aggressively if this does occur.
I would tempted to lock in any USD trade ahead of this, as a failure to raise interest rates is likely to have a detrimental effect and will be viewed as a negative by investors, which could ultimately cause the USD to weaken as we head towards the end of 2017.
Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. Feel free to get in touch on 01494 725 353 or email me here.
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