The news of further import tariffs to be put in place by Trump has the potentially to negatively affect the USD in the short term. This market report discusses how this could affect US Dollar exchange rates in the coming weeks. The below table shows the difference in USD you could have achieved when buying £200,000.00 during the high and low points of the last 30 days.
|Currency Pair||% Change||Difference on £200,000|
Yesterday, economic data releases were thin as European markets were closed due to the Bank holiday. Nevertheless the US dollar declined against most major currencies due to fresh 'trade war' fears between the two largest economies in the world. The news actually came late Sunday evening when China announced they would impose 15% tariffs on 120 American products such as steel pipes, wine and fruit and 25% on a few other items such as recycled aluminium and pork. The move is in a bid to recover the losses that will occur due to the new tariffs set out by the US.
Reports are now suggesting that Donald Trump is expected to announce further tariffs this Friday. This story will continue to make the headlines and cause uncertainty for the US dollar long term, which therefore could put pressure on the currency. Since the end of last summer GBPUSD is up 10 cents and GBPEUR is up 5 cents and I expect this trend could continue. Therefore US dollar sellers may wish to look for opportunities in the market and trade off the back of a spike.
This Friday the US are set to release Non-Farm Payroll, unemployment and average earnings numbers. The consensus for the new amount of jobs created in the US which is known as Non Farm Payroll is set to be released just short of 200k. This is a big fall compared to last months 313k, however a figure around 200k isn’t a problem for the US. It’s actually the unemployment numbers coupled with the average earnings which could provide a boost for the US dollar.
Unemployment is set to fall to 4.0% which is a record low and average earnings is set to rise from 2.6% to 2.7%. If all of the predictions materialise it could be a good day for the US dollar.
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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