It’s been heavily documented within our market reports that the ongoing trade wars between the US and China is having a major impact on US dollar exchange rates. This week media reports are suggesting that US President Donald Trump plans to implement another 200bn worth of tariffs on Chinese goods. Further information on the implications of this on global trade and the USD in today's dollar report, with the table below showing the range of exchange rates throughout the past 30 days and the difference in return you could have achieved when selling £200,000.00 during the high and low points.
|Currency Pair||% Change||Difference on £200,000|
Over the last few months we have seen Trump implement tariffs and the Chinese retaliate shortly after. If this trend continues I expect the US dollar to weaken and my reasoning is that, I believe trade wars is getting out of hand. Many Central Banks including the ECB only recently downgraded growth forecasts due to global tensions and the US are the centre of it.
In recent weeks GBPUSD exchange rates have been on the rise and that’s no surprise due to the change in sentiment surrounding Brexit. Over the last 7 days Head EU negotiator Michel Barnier stated that a deal could be reached by November which was seen as a positive for the UK and only this week, reports are suggesting that the EU are interested in a Irish border deal that will use technology to monitor goods passing across the border. Again, this is further positive news for the UK as the Irish border was on of the major sticking points.
We are expecting further news when the UK Prime Minister returns from the EU summit in Austria at the end of the month.
For clients involved with US dollar currency exchanges, of course ‘trade wars’ are a major concern and at any point US President Donald Trump has the potential to cause major fluctuations for the greenback. However, a positive for the US is, the economy remains resilient and US interest rates look to be on the rise again towards the end of the month. Most media stations are reporting that the Federal Reserve will raise rates to 2.25%. If this occurs you would expect the US dollar to have a good finish to quarter three.
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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