Oil prices have started to rise this week after problems with production in Canada, uncertainty over exports from Libya and trade wars between the US and a number of other different countries.The USD report below looks into the potential global ramifications caused by a lack of control in oil production. The table below shows the difference in US Dollars you could have achieved when selling £200,000.00 at different times, therefore at different exchange rates over the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
Libya which is part of OPEC has recently handed over control of the oil ports to a company and the state owned oil-company will no longer have control of oil in the eastern part of the country. This has caused some concern as it could affect production in the region and this would typically increase the value of the commodity.
Canada has also experienced issues with production at one its oil sands production plants and this is another reason for the rise in the price of oil. In an attempt to stabilise the market OPEC (Organisation of the Petroleum Exporting Countries) has increased production but this has yet to take an effect on oil prices. Whilst oil prices remain high as they are priced in US Dollars this tends to keep the Dollar strong and is another reason why the US Dollar has maintained its value against the Euro and the Pound.
The US Dollar has maintained its strength against a number of different currencies and personally I think we could see further strength ahead for the Greenback. Conflict between the US and China has risen recently and the US is also considering further tariffs on other countries. The Nasdaq has felt the pressure of the talks falling by over 2% during yesterday’s trading session.
However, White House trade advisor Peter Navarro has said ‘restrictions on foreign investments will not be as damaging to growth as markets are anticipating.’ On Thursday the US will announce GDP data for the first quarter of 2018 and with expectations for 2.2% any revision could cause further movement for USD exchange rates.
Later on Thursday the US will release the latest Initial Jobless Claims and this has been very positive recently so further evidence of a strong jobs market could provide the US Federal Reserve with further evidence in support for more rate hikes. The Fed has already increased rates seven times since December 2015 and with two rate hikes priced in before the end of this year I think this could see GBPUSD rates drop towards 1.30.
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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