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Currency Pair% ChangeDifference on £200,000
FED US Dollar Printing Weakens the USD GBPUSD levels have now reached a fresh multi-year high on recent positive news for the UK pound. This has also been added to continual commentary from the US suggesting their printing policy will continue, in turn weaking the US dollars value. This being Joe Biden’s $1.9 trillion stimulus package which took a step forward on Friday, even with the demand on resources within Washington with President Trumps second impeachment.

Despite a strong economic outlook the future of the US Dollar remains unpredictable

The US economic outlook is strong. There has been positive data of late. Huge tax cuts are shortly to be implemented which has caused many Americans to have more faith in the Trump administration, how this will impact the economy is uncertain however.

We have recently had a rate hike in December which brings the US interest rate levels in line with some of the most favourable of the developed nations. Despite a slightly less aggressive plan of rate hikes than expected in the US the outlook is favourable.

We have also recently witnessed the US stock market hit a record high following the new tax cuts. So what is calling US Dollar weakness at present?

There are obviously several attributing factors, one of which could be the slightly restrained plan for rate hikes by the Federal Reserve. There is an element of uncertainty surrounding how the new Fed chair, Jerome Powell will fair.

However, I think the Trump factor is weighing on the Greenback. He has recently threatened to withhold aid from Pakistan accusing Pakistan of harbouring terrorists. This was confirmed by US ambassador for the United Nations, Nikki Hayley who accused Pakistan of playing “a double game for years” and stated the administration would withhold USD $255m in foreign aid. On January 3rd Donald Trump also tweeted the following:

Nonfarm payrolls set to cause volatility for the Dollar

Nonfarm payrolls presents the number of new jobs created during the previous month excluding the agricultural sector. The release takes place on the first Friday of the month and is historically very difficult to predict. If you want to take the uncertainty out of your trade perform it before this announcement.

Thank you for reading today’s USD report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. Feel free to e-mail me at dcj@currencies.co.uk.


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