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 a month affecting US Dollar rates when buying £200,000 during the high and low points of the past 3 weeks:
|Currency Pair||% Change||Difference on £200,000|
The Greenback continued in its downward trend yesterday as President Trump’s “Historical” but long awaited tax overhaul did very little to rekindle appetite in the Dollar, having slipped by 0.9% against the Pound and over 1% against the Euro since the start of the week.
The general consensus is that the recent tax overhaul designed to incentivise Multinational corporations to base their activity in the States will help drive the US Dollar long term. Given it is expected to provide a stimulus of nearly 1.5 trillion Dollars into the US economy, equating to growth of 0.3% year on year, it is hard to argue with that statement.
Evidently, the markets do not seem convinced by Trump’s victory. The argument is that the change in tax looks set to benefit corporate earnings and in turn drive shareholder returns but do very little in the way of guaranteeing new jobs and sustained wage growth, which remains the Federal Reserve's primary concern before raising interest rates 3 times as planned throughout next year.
Despite this, I do believe that the tax overhaul has been playing a key role in providing support for the Greenback in the low 1.35s throughout this month having pushed sterling back down towards the mid 1.33s 3 times since the start of December. Because of this, I see very little reason for Sterling to make many inroads as we go into the festive period.
I see plenty of scope for the US Dollar to end the week on a high however with key growth figures expected to come out strongly this afternoon and inflation data due to be released Friday afternoon. As a result, if you are looking to buy Dollars with Pounds it may pay to act before these releases just in case the gains we saw in the early stages this week reversed.
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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