Friday saw further gains across the board for the US Dollar with the markets initially gaining confidence with yet more record breaking inflation levels being posted, before the brutal crash in the Turkish Lira drove investors away from the Euro and a mixture of commodity based currencies and into the safe haven Dollar, sending it’s value even higher. The table below shows the range of exchange rates throughout the past 4 days, demonstrating the difference in return you could have achieved when selling £200,000.00 during the high and low points of that period.

Currency Pair% ChangeDifference on £200,000
GBPUSD1%$2600

The shift in trend is likely to continue as analysing the deep-rooted interconnections between the EU and the Turkish economy will be no quick fix. Until investors have fully assessed their exposure to the risks surrounding their European positions at present I personally can only see the Dollar growing more expensive to buy, particular if economic data State-side continues to impress.

Interestingly, where the concession propositions in Brexit talks spurred the Pound to rebound against the majority of its currency counterparts last week, the Greenback’s relentless drive continued which just goes to show the underlying faith the markets hold in the Dollar at present.

Dollar to take advantage of further EU and UK distraction

Cable to hit 1.25 this week?

With little economic data UK side expected to prompt any kind of support for Sterling, it would appear the greenback holds all the cards to persist with its push back to the 1.25 mark. Wednesday’s Retail sales figures certainly have the potential to drive the Dollar over the line, as does Thursday’s key housing data.

With both releases having consistently posted strong readings since the start of the year, there is an argument that they have already been factored into Cable rates however. Those holding out for further US Dollar gains may want to proceed with caution. If details from the concession proposal from the EU fall in line with what is deemed acceptable by the UK Government, we could see a switch in sentiment from the markets.

Given Cable rates have not fallen to the 1.25 mark since April 2017, holding out for sustained greenback gains may end up being a step too far.

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.