Donald Trump last week created a fresh round of trade concerns after he suggested he could introduce a 20% tax on European cars. The car industry is one of Europe’s biggest exports and would no doubt be met with retaliation. It’s still not quite clear what effect the trade wars will have on the American economy however the uncertainty has so far not had to much effect on the US Dollar. The table below shows the range of exchange rates and the potential return you could have received had you transferred £200,000.00 during the high and low points of the past week.

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.82%€1880

The European Union has now introduced tariffs on American goods such as whiskey and clothes in retaliation, which may be why Trump is now keen to increase the pressure. Certainly, over the next few months I would not be surprised to see further tariffs being announced from the President.

Major week of economic data in the US

Major week of data in the US

This week there could be more USD strength as nearly every day there is a major economic data. Over the last few months US data has been going from strength to strength helping the Dollar to make considerable gains against all the major currencies.

Early in the week New Home Sales are expected to show a slight increase. On Wednesday in the middle of the week Durable Goods Orders are also expected to show a small improvement from the previous month for May.

On Thursday the Gross Domestic Product data for Q1 is expected to remain at 2.2%.

This will be followed by Personal Consumption Expenditure which is expected to improve from 2.3% to 2.7%. This is a considerable jump that can be put down to more people being in work and consumers having more expendable income. In order for the US economy to keep growing it will be vital that the population keep spending. In my opinion if this reading is better than the expectations then the US Dollar could strengthen.

Finally, on Friday the latest inflation data will be released and is expected to remain at 1.8%, should there be an increase in this release it would confirm more hikes this year, arguably they’re already a certainty. If you’re looking to purchase US Dollars you may find yourself trading below the 1.30 level in the near future so make sure you capitalise on any rates movements in your favour in the short term.

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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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.