Like most of the other major currencies, the Greenback was able to capitalise on a rocky start to the week for Sterling exchange rates, with Cable falling even further past the 1.30 mark and forcing the Pound to surrender a big chunk of it’s hard fought gains from last week. More on the economic data out this week for the Dollar and how it could impact GBPUSD exchange rates below, with the table showing the range of exchange rates and potential Dollar returns when selling £200,000.00 during the high and low points of the past 30 days.

 

Currency Pair% ChangeDifference on £200,000
GBPUSD1.3%$3,600

With GBPUSD now sitting in pivotal mid 1.28 levels, Dollar holders will now be questioning whether the 1.26 mark from early last month could be achieved once more, particularly as the UK struggles amid more political confusion domestically.

US Trade impacts growth and could push interest rates up Trade talks have certainly been a major talking point and are very likely to remain so going forward. Over the summer the trade conversations with China intensified. The US imposed a 25% tariff on $50bn worth of Chinese imports which was matched quickly. This rising tension over trade is changing global risk appetites and have resulted in an increasing amount of capital flowing out of emerging markets and has weakening global growth prospects. The IMF recently estimated that trade tariffs and other measures implemented recently could reduce global GDP by as much as 0.5% by 2020.

When might be the best time to buy Dollars with Pounds?

This afternoon’s Business confidence release (Markit Economics) could disappoint those holding out for such gains. The survey has stagnated since the start of the year so it might not fill the markets with confidence given the ongoing trade negotiations with both china and NAFTA members.

For the dollar to holds its ground below the 1.30 mark amidst all this global uncertainty, investors will need clear indications the US has the capability to remain competitive on the international stage despite key trading partners potentially turning their backs.

Similarly, US trade data will be under added scrutiny on Wednesday and has the potential to bring even more volatility to US Dollar exchange rates. Those looking to buy Dollars may want to plan round this event to make sure you can make the most of the next spike in your favour.

Of course, the main market mover state side for this week will be Friday’s Nonfarm payroll data. Because the release plays such an important role in the Federal Reserve monetary policy decision making, another strong reading on Friday would further justify the Fed’s aggressive stance, potentially sending the USD’s value higher. As a result, I feel confident the Dollar will end the week more expensive than it started.

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.