Trump's apparent u-turn on many of his campaign promises are unsettling markets, who continue to lose faith in Trump's pro business stance. Will the US Dollar continue to lose momentum against the Pound? 

Will the US Dollar continue to lose value against Sterling?

The US Dollar has come under pressure recently, as the FED have started to distance themselves from comments they made at the turn of the year, regarding multiple interest rate hikes during the course of 2017.

Whilst some investors are still pricing in another rate hike in June, a drop-in business confidence figures may be the catalyst for further downturn over the coming weeks. Much of the USD’s strength over the past few months has come from a belief amongst investors, that controversial President Donald Trump’s business prowess would help to drive the US economy forward.

Whilst there is no real telling yet whether or not this confidence was misplaced, what is clear is that as we approach his first 100 days in office, events have somewhat conspired against him.

Many of the policies he committed so vigorously to during his campaign bid seem more unrealistic than ever, as his government hit roadblocks in their bid to alter both the healthcare and tax systems in the US.

As touched on in yesterday’s report, the next sticking point is around funding for his US/Mexico border wall, with a government shutdown looking more and more the likely outcome. As he has hardly even entered his tenure, what other unexpected surprises will he come up against and what effect will these have on the USD’s value?

It is very rare that Cable trades below 1.30 for such an extended period and whilst the USD has found some support under that threshold, how long can it hold out if market conditions remain as they are and confidence in the US economy and its leader starts to deteriorate further.

Personally, I feel that the USD has already hit its peak against GBP and I would be extremely surprised to see a move back under 1.25. Take control of the market and protect any USD currency positions to eliminate any further risk.

Key economic data

Whilst economic data is light this week for the UK & Eurozone, those clients with a USD requirement have multiple key releases to keep an eye on.
Today see the release of a host of housing data, although with new home sales expected to drop the USD may in for another tough day.

Personally, I still look at the current sell pricing of USD as a fantastic opportunity to trade, especially when you consider the relative history on the GBP/USD currency pair.

On Thursday there is a host of employment data released, along with Trade balance figures. These will give the market a key insight into how exports are comparing against any import costs and could put further doubts in investors’ minds, if the gap has widened further from last month.

However, it is Friday which could hold most weight with the latest GDP figures released around lunchtime. With a previous figure of 2.1% growth, expect additional movement on USD exchange rates as we head towards the weekend.

As such if you have a US Dollar requirement, staying in regular contact with your broker will ensure you do not miss out on any spikes in the market. If you havent already, detail your requirements to your broker on 01494 725 353 or email me here and Ill be happy to assist you personally.

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