In Trump we trust

As we close in on Donald Trump’s 100th day anniversary as President of the largest economy in the world, it appears as though the honeymoon period is over for the dollar as cracks appear in the relationship between Donald Trump and the US economy.

GBP/USD rates reached 1.2916 at the high yesterday as we draw closer to the 1.30 mark each day

As it currently stands, the downside risks, that is reasons that the dollar would lose value before it gains value are currently outweighing any positives for the dollar. Therefore I would suggest that any clients looking at selling US Dollar to buy Sterling make plans to do so sooner rather than later. Firstly, one of the main reasons for the recent decline in the Dollar’s value is Donald Trump’s credibility. Since his inauguration he has done little to meet the expectations of his followers.

This week, he has tried to cut corporate tax and personal tax in what he has labelled the ‘biggest tax changes in history’ to record lows, which has straight away been labelled a huge tax cut for the rich, which has caused him to come under fire for his proposal. This has also come at a time whereby his changes to the healthcare system in America have been rejected twice.

North Korea tensions drive the Dollar

This week, he has tried to cut corporate tax and personal tax in what he has labelled the ‘biggest tax changes in history’ to record lows, which has straight away been labelled a huge tax cut for the rich, which has caused him to come under fire for his proposal. This has also come at a time whereby his changes to the healthcare system in America have been rejected twice. This raises the question – is this starting to feed through into the US economy? Durable goods orders and unemployment data came out much worse than expected yesterday. Durable goods orders are of significant importance as to the health of the US economy as it signals future growth.

Although the economy is still growing at a reasonable pace, this is someway off what is expected. How will this feed into the plans of Janet Yellen and the Fed as they look to raise interest rates another three times this year?

GDP data could provide an opportunity for US Dollar buyers

For any clients waiting for the 1.30 barrier to be breached, today may be your lucky day. GDP is set to be released which could, if the data is worse than anticipated provide a window of opportunity for USD buyers. The last time we saw the pound break this barrier was seven months ago, If you have a US dollar requirement this may be the time to move.

With this in mind, those with a US Dollar buying requirement may benefit from a quick call with their personal broker. Call our trading floor on 01494 725 353 or email me here for a free quote.

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