Last week the US released GDP figures which show economic output grew by 1.4% year on year, and this was a better figure than preliminary figures has suggested.
It’s strong fundamentals such as these along with a steady unemployment rate of just 4.9%, coupled with the safe haven status of the US Dollar which has really boosted the currency over the year, particularly in comparison with the Pound.
When we consider how the US Fed Reserve has so far opted against hiking interest rates even once this year, when they originally outlined a planned 4 throughout 2016 I can only anticipate further US Dollar strength once they’re implemented.
Then I consider a Trump presidency, and the effects he could have on global markets and US sentiment if he’s to act as erratically on the global stage as he is twitter currently. Only time will tell what kind of effect this presidential election will have on the greenback but I for one am watching it closely as the next 2 months could be interesting.
Last Friday Reuters announced that net long (bets in favour of US Dollar strength) on the US Dollar have now reached a 6 week high, with the Green backs safe haven status the likely reason for this as fears over Deutsche Bank ramp up.
The first Friday of every month is a key date in the calendar for us here at currencies.co.uk as it’s when the release for the previous months Unemployment and new jobs (outside of agricultural work, hence non-farm) data is released for the US.
The unemployment figure is expected to remain at 4.9%, and the Non-Farm figure, up on the previous figure to 176,000 new jobs. Currency movements of over 1% are far from unheard of during this release, so do get in touch if wish to avoid any big swings in your upcoming currency exchange.
Whilst the US Dollar remains strong against Pound Sterling, the upcoming US elections could easily change the direction of the currency pair. Call our trading floor on 01494 725 353 if you have an upcoming currency requirement.
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