As global trade tensions persist, due to stand-off between the world’s 2 largest economies, the greenback has remained bullish and has maintained steady gains against most major currencies, as investors have sought security in the safe-haven. 

Currency Pair% Change (Month)Difference on £200,000
GBPUSD1.93%$4,840

The United States’ hard stance towards trade negotiation has affected nations globally and it seems many are hoping that the upcoming G20 summit might provide a platform for positive negotiations between President Trump and Chinese President Xi, although reports have not been able to confirm that the two are set to meet.

British Finance Minister Philip Hammond recently emphasised the UK’s concern surrounding the matter and reiterated the nations “vulnerability to anything that impacts on global trade and economic growth,” but did also express confidence that agreement can be reached.

The US President has suggested he will wait until after the summit to decide whether he will go ahead with further tariffs to $300billion worth of Chinese imports, although he also placed emphasis on the importance of the summit and ‘reassured’ that it is only a matter of time before the two nations will come to an agreement.

As long as the uncertainty surrounding global trade continues it could be argued that the USD will remain steady, although it’s been expressed via various economic sources that the burden of the trade wars will only end up taking its toll on US domestic markets, as consumers will ultimately bare the brunt which could then see the currency weaken.  

Federal Reserve News

Fed to cut interest rates for 1st time in a decade?

Investors will be gearing up for the latest interest rate decision by the Federal Reserve Bank (Fed) on Wednesday and the following monetary statement from the Central Bank’s Chairman, Jerome Powell. Analysts suggest the Fed will be ‘walking a tightrope’ this week, as reports have suggested the US could see its first interest rate cut in 10 years from the current level of 2.5%, despite the economy’s growth and employment at record highs.

Interest rate decisions can have a direct impact on the value of a currency as high interest rates are typically attractive to investors, so any indications to a cut to the current level in the short-medium term could affect sentiment in the USD and lead to weakening of the currency.

For more information, please get in touch with your broker, or contact our trading floor directly on 01494 725 353.

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