Trump's import tax plan has the potential to cause uncertainty for the Dollar in the coming months and year as the likelihood of a 'trade war' seems to be increasing. This Dollar looks into how this could affect USD rates in the future. The table below shows the difference in USD you could have achieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
Former Goldman Sachs COO Gary Cohn resigned late Tuesday evening and subsequently weakened the Dollar, following President Donald Trump’s plan to go ahead with the new tariffs on imported steel and aluminium.
Throughout the trading day yesterday, Gary Cohn’s exit, who was the chief economic advisor to President Donald Trump and a key player in the tax cuts and pro-economic growth agenda, caused panic and widespread selling off of stocks and shares. The imposed tariffs on Steel and Aluminium were something he couldn’t agree with.
This could be a warning sign that the Greenback could be in for a rough ride in the months to come. The proposed tariffs of 25% for imported steel and 10% for imported aluminium mean that America could be about to enter into a trade war that could damage the economy in the months and years to come.
After only last month Donald Trump announced he would once again run for President in 2020. It might not come as a surprise that following this announcement Trump has prioritised his voters by putting US manufacturing as a priority. The Aluminium and Steel industry are based in the Mid-West swing states that won Trump the election and that had been on the decline through Obama’s Presidency.
By putting these voters first Trump could already be drumming up votes for the next election. Furthermore if that’s his focus he will be unable to back track which means the tariffs could become a real possibility in the near future, this could mean more uncertainty for the US Dollar is coming.
The US labour is still showing signs of strength following the release of the US ADP report which added 235,000 jobs in February. The US labour market is keeping the push for interest rates to be hiked in the US in the light of stagnating inflation. Many investors are now calling for 4 interest rate hikes this year which could see the Dollar strengthen significantly if these rumours look to become a reality.
The major talking point and highly anticipated Non-Farm Payroll report is a must watch for any clients with a dollar requirement. Yesterday’s ADP report is a sign that Non-farm data could show a healthy reading and therefore strengthen the Dollar, as this could intensify the rumours for an additional fourth rake hike through 2018. Clients buying dollars may want to move before Friday afternoon’s (UK time) in my opinion.
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.
I switched to Foreign Currency Direct earlier this year, and I can honestly say they have been absolutely marvellous. Registering your client could not be easier, the Portal allows you instantly access your clients giving us full transparency, and my dedicated Account Manager Amelia does a fantastic job of keeping me informed.
Rob Harold is a pleasure to work with, he has an outstanding conversion rate from leads I put forward and provides those clients with an excellent service. By always keeping me informed at every stage, this helps me keep my sales on track at the vital time when payments are due.
I use Foreign Currency Direct for my own currency transfers and I recommend their services to our clients for currency exchange on Spanish property for purchases and sales through Costa Blanca Casas.
Always the best rate for me and my clients. As we have many clients at Girasol Homes we get 5 star service for them, and we expect it as well, always a personal and bright service. Highly recommended.