This US Dollar report will examine the factors that could affect exchange rates this week 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 when buying £200,000 at the high compared to the low for the past month.

Currency Pair% ChangeDifference on £200,000
GBPUSD3.50%$9,500

GBPUSD rates have been climbing almost in a straight line over the last 30 days, with exchange rates increasing by 5 cents, adding nearly $10,000 on a £200,000 transfer.

A majority of these gains have been from the growing belief that the Brexit negotiations, which have been choking UK plc may be concluded next week at the ‘crunch conference’. In my opinion this will be the main driving factor for GBPUSD traders over the coming 10 days and an event to be very aware of if you have to manage any exposure.

Federal Reserve Interest Rate Hike predictions continues to influence US Dollar

US politics continue to surprise the market

Recently the US senate has approved the new tax laws, in what many are considering to be the first major change implemented by President Trump.

It has received very mixed reactions with sizeable tax cuts for businesses and high earners but with perhaps an unfair distribution of benefits for those on low and moderate incomes. These sweeping tax cuts, which were the most substantial since the 1980s still need to go through the House of Representatives before it can be signed into law.

This news did result in small gains for the US Dollar however the stock markets in the US were the real short term winners.

Longer term I expect these cuts to result in an economic boom for the US economy, resulting in increased activity within the US and perhaps will incentivise companies to return to the US with the promises of lower taxes. Something to be aware of if you have any long term exposure with the USD to consider.

Economic data for the US continues to perform well. Manufacturing data from the US showed more signs of improvements last week. Factory orders from the US yesterday were also strong. Later today we have Service and Manufacturing PMI data, both are expected to make the USD more expensive to buy. There are employment indicators throughout the week with non-farm payroll figures on Friday. This one will be particularly influential with the pending interest rate decision when most expect a further hike to be announced.

Generally, without the suggestion that the Brexit talks next week will be successful the USD is performing much better than the Pound. These Brexit talks do very much seem to have been concluded however nothing is in writing therefore things could change very quickly. I personally do think a resolution will be made resulting in the USD becoming cheaper to buy. Saying that however, any delay, stalling or a slip in reaching that result would probably have a significant impact on the value of the Pound. For breaking news on this topic make sure to notify your account manager here.

Thank you for reading today’s market 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 at hse@currencies.co.uk.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.