Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just 30 days affecting US Dollar rates when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBPUSD2.1%$5,450
US Dollar strength continues

Will the Dollar continue to weaken against the Pound?

Whilst the US celebrated Martin Luther King Jr Day the Pound managed to hit the best rate to buy US Dollars with Pounds since June 2016 when the EU referendum took place.

The Euro is also at its highest level against the US Dollar since December 2014 highlighting the weakness of the US Dollar on the world stage at the moment. US President Donald Trump has welcomed the weakening of the Greenback to make the US more competitive and I think we could see further Dollar weakness ahead.

The question is now whether the Dollar will continue to fall against Sterling and I think potentially the GBPUSD rate could head towards 1.40 as we progress further into the month.

The European Central Bank also released some rather hawkish minutes which has seen global investors move money into the Euro over the US Dollar. Further with last week’s jobs data coming out lower than expected and inflation falling in the world’s leading economy all have led to the Dollar dropping in value.

Oil prices have been rising recently and although hit close to a 3-year high yesterday there is a concern that the recent positive gains could be short lived.

When will the Fed raise interest rates?

Even though the US Dollar has been weakening recently there is still an expectation of perhaps 2 or 3 interest rate hikes still to come this year. Indeed, there is currently an expectation that the US will next raise rates in March with a recent poll suggesting that there is an 88% chance of this happening in next two months’ time.

Typically, the anticipation of an interest rate hike would normally see that particular currency strengthen. However, as the markets are almost fully expecting this to happen then we could see the Dollar fall in value if the rate hike doesn’t happen in two months’ time.

Therefore, if you’re looking at selling US Dollars it may be worth securing at current levels. If you don’t have the full availability of funds then speak with your account manager about how a forward contract may work for you.

For more information on how future data releases and monetary policy changes could affect your currency requirement, call our trading floor on 01494 725 353 to speak with your account manager, 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.