A bad end to the week for Sterling and yet despite the chaos within the Trump administration, the US Dollar emerges the dominant currency this week. The below table shows Pound to US Dollar exchange rate movements, and the difference you could have received when trading between the high and low point of the three months.

Currency Pair% ChangeDifference on £200,000
GBP/USD4%$10,000

Greenback thrives amid Sterling weakness

The combination of positive economic releases from the US and a weaker outlook from the Bank of England led cable rates to drop considerably throughout yesterday. Sterling fell from 1.294 to 1.285 making a $200,000 transfer nearly £1,100 more expensive.

Is this the beginning of the end of Sterling’s attempts to charge through the 1.30 barrier?

Interest rates will continue to be the driving factor for the pair and if we were to compare the messages coming out of the respective central banks, it is hard to see the pound build the necessary momentum needed to gain consistent ground over the now very robust US Dollar. Whilst the BoE confirmed yesterday a rise is far from imminent given the worryingly low levels of avg wages, there were only more reasons for the Federal reserve to act sooner rather than later on their promise of multiple rate hikes throughout 2017.

Growth forecasts and the latest jobless claims data both came out remarkably better than expected.

As sterling is still sitting in the best rate range we have seen since October 2016 it may be worth capitalising on your current position if you have a US Dollar requirement before the market’s momentum shifts against you.

Key economic data to consider

With this in mind, the Fed will be paying close attention to the latest retail sales figures as well as the Baker Hughes oil Rig Count released later today. Both will give a clear indication into the cost of living in the states at the moment and with inflation levels being a major barometer for monetary policy decisions, these releases have the potential to be real market movers.

Decisive Trump to drive long term US Dollar uncertainty

Yesterday in a live interview to NBC, president Trump defended his decision to sack Mr Comey, insisting that he would have fired the former FBI head regardless of the advice given by his council.

Although investors would normally welcome Trump’s decisiveness as it would reflect well on his ability to for fill on his tax cut promises, they might be unconvinced by the handling and the timing of the matter. Branding a man a “showboat” days after commending his qualities is a contradiction that is quite difficult to reverse.

With the stand in-head McCabe standing by the inquest into the Whitehouse’s connections to Russia this could well spell long term difficulties for the Trump administration and for the Greenback as a result.

Brexit and the Trump administration are two of the biggest factors driving Pound to US Dollar exchange rates. If you have a requirement involving either, it may be a good time to get in touch with your broker to detail your requirements on 01494 725353.

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.

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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.