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 for the current year to date affecting US Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The US Dollar has been one of the biggest losers in recent weeks, with the Pound to US Dollar (Cable) rate hitting its pre-Brexit levels recently and therefore hitting the headlines. EUR/USD is the most traded currency pair and some economists have claimed that the Euro is overvalued simply due to investors/traders betting on the US Dollar losing value and using this pair to do so! The Dollar did fight back against all major currency pairs on Friday though, especially the Pound after US jobs data impressed. US Payrolls expanded by 200,000 new jobs in January, which was a higher number that the markets had anticipated. Also, perhaps more significantly on an annual basis, wages in the US have grown by 2.9% whilst the unemployment rate remains steady at 4.1%.
The boost to wage growth is likely to increase the chances of the FED's interest rate hike plans for 2018, therefore reducing the chances of a further sell-off in the Greenback's value.
These readings may indicate future Dollar strength as forecasters had previously warned over the lack of wage growth stunting growth within the economy.
On Thursday there will US Unemployment data released at 1.30pm which has the potential to move markets as we saw on Friday. This release will be sandwiched between two Fed member speeches by Harker and Kashkari which also have the potential to move markets, especially if either refers to future monetary policy with next month being the next chance for the FED to increase interest rates in line with their plans this year.
For those waiting for the right time to sell US Dollars, it’s worth considering that some analysts are putting the Dollar weakness down to the pick-up in the global economy, and now that other central banks are following the FEDs path, it may be that we see the US Dollar continue to weaken as other economies catch up.
For more information on how future data releases could affect your US Dollar requirement, call our trading floor on 01494 725 353 or email me here.
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