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% ChangeDifference on £200,000
GBPUSD1.44%$3960

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.

Are the US FED and President Trump on a collision course over further interest rate hikes?

Trump’s agenda greater than Trade

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.

US economy update

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.

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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.