We did see the Pound gain ground against the US Dollar yesterday following comments form Michel Barnier, Chief EU Brexit negotiator. He stated that a Brexit deal could be realistically in place in 6-8 weeks while speaking in Bled, Slovenia. More on the factors in the UK and US impacting cable exchange rates in today's USD report. The range of GBPUSD rates during trading hours on Monday is outlined in the table below.

Currency Pair% ChangeDifference on £200,000
GBPUSD1.20%$3100
What next for USD exchange rates?

Personally I do not think this is any great shakes, the time scale is there or thereabouts. The current deadline for a deal is set for 18th October, although it is widely anticipated the deadline will be extended in to November. I would be wary of hoping for further Sterling gains while there is still the prospect of a “no deal” scenario on the cards. While this option is still a possibility I expect little gains for Sterling due to a lack of investor confidence.

Trade Secretary, Liam Fox has sated he believes there is a 60% chance this could occur while Reuters believe there is a 25% chance.

The US Dollar is benefitting from all the global uncertainty it seems to be creating. The US is involved in multiple trade wars and usually you would expect the currency in question to weaken in value, it is the opposite in the case of the US Dollar.

During times of global economic uncertainty investors seek a safe haven investment with relatively high returns. The Greenback fits the bill perfectly. There are expected to be further rate hikes from the Federal Reserve this year and 10yr bonds now have the highest yield in years.

If you have to purchase US Dollars short term it could be a good idea to take advantage of current levels.

CPI Data – Thursday 13th September

Consumer Price Index (CPI) data is a measure of inflation. Inflation levels are key in providing justification for a change in monetary policy. There is expected to be little movement in figures when released on Thursday, but this is not necessarily a bad thing considering inflation still sits above  the 2% target.

If the data comes in positive this could pave the way for a further rate hike from the Federal Reserve so it is worth keeping an eye on if you have a trade involving US Dollar.

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.