Will Donald Trump weaken the US Dollar?

Despite his America first policies causing widespread global controversy there does appear to be limits to what Donald Trump can do. His travel bans are being subjected to numerous legal challenges with a hearing today to decide whether to allow or accept the ban. In recent weeks the strength of the US Dollar has been rising which has been partly attributed to the belief Trump will through the lowering of taxes and increasing defense spending be beneficial for the US economy.

That view is still partly holding but a continued friction between Trump and his many opponents does threaten this viewpoint.

Overall I expect the US Dollar to remain strong as the prospect of further interest rate hikes in the United States ensures the US Dollar remains a much more attractive investment compared to its counterparts. If you have a GBP/USD requirement I would suggest US dollar buyers purchase on any spikes whilst US Dollar sellers might see better opportunities particularly with Sterling remaining under pressure from political uncertainty over the Brexit.

Important US economic news this week

Key information on the US dollar this week will be the latest news from Jobless Claims on Thursday and then Friday the Baker Hughes Oil Rig Count. Employment statistics have been key for the Federal Reserve in their assessment of whether or not to raise interest rates further which is why Thursday’s data will be noteworthy. This week isn’t the busiest for US economic data which means the likelihood of a Trump tweet or something else unexpected driving GBP/USD rates is high.

Clients with a GBP/USD requirement should be closely monitoring developments in the passage of the ‘Brexit Bill’ in the UK which should be passed in the coming weeks. Sterling is much stronger against the US Dollar currently having risen to levels of 1.27 recently. Considering we were on a cliff edge of 1.20 only a few weeks ago and all of the negativity surrounding the Pound, this is not a bad place for US Dollar buyers to be in. It seems even with the prospect of Donald Trump doing something unexpected the market will favour US Dollar sellers.

If you have a US Dollar requirement keep up to date with our experienced and knowledgeable team here who can alert you of any sudden changes in sentiments. Our trading floor number is 01494 725 353 or alternatively, you can email me at jmw@currencies.co.uk and Ill be happy to reply personally.


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