As investors moved away from the riskier Euro to the Dollar, USD regained some ground against Sterling yesterday. In today's USD report Ben Small discusses how the perception of risk in the Euro improves the Dollar. We have shown in the table below the amount in Dollars you could have achieved when buying £200,000.00 during the high and low points of the past 4 weeks.

Currency Pair% ChangeDifference on £200,000
GBP/USD2.2%$6,000
Why is the US dollar strengthening against sterling?

How much ground could the dollar regain this week?

The dollar regained ground against the pound during yesterday’s trading as risk aversion to the euro from the markets drew investor appetite for the safe haven greenback. This was despite a considerable slow down in Factory Orders state side which suggests to me the dollar may still have a fair amount of ground to gain on the Pound particularly as yet another wave of Brexit uncertainty looms. It will be interesting to see how this afternoon’s manufacturing and services data comes out. If yesterday’s drop in Factory orders filters through then there might be more reason for caution from the markets, offering those looking to buy dollars with pounds with a potential brief spike to capitalize on.

How could tomorrow’s trade figures set the tone for G7 talks?

Tomorrow’s trade balance data will no doubt be taking center stage however, particularly with the markets watching for clues on how likely the US will push through with the threatened trade tariffs. Over the weekend, multiple G7 finance ministers have criticized the Trump administration for the negotiating tactics used in the recent trade talks.

I feel a drop in trade levels may well weaken president Trump’s hand which could in-turn loosen the dollars dominance against it’s major currency counterparts. If however, we see a recovery in exports, then Trump will have all the justification he needs to maintain his aggressive stance.

Canada’s prime minister Justin Trudeau has been peddling a united G7 summit, has stated he is confident all members will be focusing on the common goal of driving global development.

I think it is going to be a tough ask to keep Trump on the same page and so volatility on the back of these talks at the end of the week should be expected. Those looking to buy dollars might be inclined to consider their positions whilst the markets hold fire.

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.