The Dollar has been performing very well of late thanks to positive economic data throughout the year and two interest rate hikes from the Federal Reserve. This coupled with uncertainty in the UK and Europe has seen GBPUSD fall to the current 1.31 mark from 1.43 in April and EURUSD rates shift to 1.17 from 1.23 in the same period. The Dollar report below looks into the discussion between Trump and Juncker yesterday, and upcoming OPEC and economic data to be released today. The table below shows the difference in USD return you could have achieved during the past month when selling £200,000.00, depending on the exchange rate at the time of your transfer.
|Currency Pair||% Change||Difference on £200,000|
The outlook for the Greenback looks positive as the Fed seems like it will hike interest rates at least once more this year, possibly twice. Clients holding Dollars have every reason to be optimistic at present - economic momentum in America can be demonstrated by the fact that the Fed has managed for the first time in more than a decade to accelerate the pace of rate increases from 1x in 2015 and 2016, to 3x in 2017, and at least 3x in 2018.
Following his meeting with European Commission President Jean-Claude Juncker yesterday, Donald Trump announced he had secured concessions from Europe and that both parties were working toward “zero tariffs”. Sterling and the Euro have reacted positively against the Dollar, although I believe these to be short-term opportunities for those buying Dollars, rather than the start of a long-term shift in rates. US Markets took the announcement positively. The Dow Jones gained more than 150 points following the news and rose more than half a percent. The shift could serve Trump to isolate China in their ongoing trade war, but it will be interesting to see if he comes in for some criticism from his political base in the US, especially with mid-term elections looming large in November.
Today’s OPEC meeting will give insight into how oil production is adjusted in the coming weeks. Less production is a real possibility as the international trade disputes have raised the possibility of slower economic growth and weaker energy demand. Oil prices and the US Dollar tend to have a converse relationship – when one falls the other generally rises.
Today at 12:30, initial and continuing jobless claims are expected to decrease whilst Durable Goods Orders should increase considerably. These accumulated releases could wipe out yesterday’s Sterling gains against the greenback.
The Dollar has the potential to move markets all around he world. Whatever your requirement, get in touch so that we can help you maximise your next transfer.
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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