This US Dollar report will examine the factors that could affect exchange rates in the short term in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received in USD when buying £200,000 at the high compared to the low for the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
US President Donald Trump made headline news yesterday by claiming at a ‘Make America Great Again’ rally in Pheonix Arizona, that he will shut down the US Government if he has to. President Trump has made it clear he wants Congress to pay for the famous wall that would divide the US and Mexico, in a bid to keep out illegal immigrants. The problem Trump has is that he will need the support of the Democrats within Congress and this is unlikely to happen. It was only last month Donald Trump turned on Congress as they refused to sign off his reforms for a healthcare service, and forced him to sign legislation which he disagreed on. The legislation targeted the Russian energy sector. The likelihood is that Congress will not back the President, therefore funding cannot be passed which would lead to the Government being shut down on the 1st October.
If the Government is shut down I expect the US dollar to lose value across the board which could provide a window of opportunity for US dollar buyers. On a more positive note for the US, at the same rally Trump announced that tensions between the US and North Korea had cooled.
To finish the week the top central bankers globally will meet on Friday at the Jackson Hole retreat to discuss the global economy. It has been reported the vibe should be more upbeat than 12 months ago, however global inflation is a worry for most of the leading nations.
Chairlady of the Federal Reserve Janet Yellen is set to start proceedings at 8am local time (3pm UK time) and the theme is financial stability. However investors will watch closely to understand her inflation outlook as this could provide further insight to whether the US will or will not raise interest rates towards the end of the year.
Later in the afternoon, President of the European Central Bank Mario Draghi will take to the podium at 1pm local time (8pm UK time) and some economists are arguing this will be the most important speech of the day. If Draghi gives any further hint to when the central bank could taper the bond buying program, we could see a further sell off of US dollars to buy Euros which would weaken the US dollar and make it cheaper to buy. However I expect the President to keep his cards close to his chest. Consequently my predictions is for the Jackson Hole meet to be a non-event or for the euro to strengthen slightly.
Thank you for reading today’s US Dollar report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me here.
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