US President elect Donald Trump has somewhat retracted on his bullish statements regarding a US/Mexican wall. The property tycoon turned politician, has stated over the weekend that large stretches of the wall may in fact be fenced, news that may come as a shock to many of his loyal supporters. With much of his campaign victory based on egotistical talk and hard line stances, this appears to be his fist politically motivated comment.
The reason for this is possibly to try and appease the large Mexican community based inside the US, as any diversions inside the country are likely to lead to economic pressure and a downturn in the US Dollars value.
GBP/USD, as of yet, has not reacted to these comments but with the pair hitting a 5-week high earlier this week at 1.2661, those clients holding the Pound may be quietly satisfied with Trump’s appointment due to the positive effect it has had on Sterling.
Whilst many have been left dismayed by his victory, the knock on effect has been one of optimism amongst investors, who view it as an opportunity for the UK economy to drive forward. This is due to the potential trade deals already discussed but with the overriding feeling prior to his appointment, that a Trump victory would ultimately harm the US economy and subsequently the greenback, US Dollar sellers may wish to consider their positions, with further pressure on the US Dollar likely in the short-term.
Looking ahead and tomorrow we have the latest US Retail Sales figures, which are expected to remain unchanged at 0.6%. With a lower figure than first thought last time, any further downturn will more than likely have a negative impact on the US Dollars value.
Wednesday sees the latest inflation figures and with an increase predicted, expect the markets to factor this in to the US Dollars value early this week.
Finally on Thursday we will see more inflation data, so expect further movement for Pound to US Dollar exchange rates this week.
Fresh highs for Pound to US Dollar rates have presented themselves but clients should remain cautious towards a Trump presidency. If you are looking to buy US Dollars in the weeks ahead, why not speak to one of our team on 01494 725 353. Alternatively, you can email me here to discuss a transfer.
From the initial contact with the broker, through my dealings with the compliance folk, the experience was the same, a great blend of efficiency and friendliness, plus I got a great rate, well done Matt and the team.
Matt and Jonathan were excellent and most professional. Through out I felt I was in good hands – they took time to explain everything to me and were very patient when I was experiencing some technical problem with my own bank.
Matt was very helpful and efficient, very good service.