The GBPUSD interbank exchange rate started to climb three weeks ago, from the worst levels seen since April 2017. However, they have now started to fall once more over the last seven days. USD is now nearly 1.5% more expensive than a week ago, over 4% compared to 2 months ago and nearly 5.5% compared to the highs seen in the middle of March. Again, most of these falls have been attributed to the heightened concerns about the future of the UK, with the uncertainty around the political leadership going forward and the impact on the end deal with Europe on Brexit. There are however concerns mounting for the US economy going forward, but these seem to be less impactful on GBPUSD rates with the market more focussed on Politics in the UK, for the time being at least.
|Currency Pair||% Change (Month)||Difference on £200,000|
Forecasts on the prospect of a trade deal between the two largest global economies, the US and China, have been very changeable. Back in March and April the prospect of a deal being concluded was high, but that likelihood dissipated in May. The two leaders met over the weekend at the G20 meeting in South Korea and apparently the meeting was positive with President Trump declaring that he is ready to re-open talks with China. However, he tweeted afterwards saying that the quality of the deal is more important that the speed, suggesting that he is in no hurry and that a trade deal is not a done deal.
The rate of economic growth within the US has also started to slow down which has resulted in a change in forecast about the Federal Reserve’s (Fed) financial policy going forward. At the beginning of the year there was a view that interest rates would continue to climb however US Fed Chairman Jerome Powell, expressed concern about the slowing of the global economy, This has led to increased market expectation of a rate cut as early as their next meeting. Their next meeting takes place on the 30th and 31st of July and is certainly one to watch. Any cut in interest rates would be the first seen in the world’s largest economy for over a decade and really would confirm the change in their economic cycle.
In a further out break from US President Donald Trump, he called the Fed’s monetary policy “insane” for not cutting interest rates at their last meeting and went on to say that the ECB president Mario Draghi should take over.
Economic data will however continue to have a big impact on the USD’s value and indeed help validate any change in policy from the Fed. Last week US durable goods orders for the month of May fell for a second month in a row which added to concerns that the country’s manufacturing sector is slowing. Tomorrow Trade Balance and Manufacturing data is due from the US.
Jobless figures are traditionally one of the largest parts of the economy that the Fed uses to make future policy decisions and these are being released on Friday. Overall Unemployment rate and Non-Farm Payroll data is released on Friday afternoon and is certainly one to watch if you have exposure to the USD going forward.
Simple, fast, great rate. Speedy uncomplicated transaction with no commission and very good exchange rate. Friendly service
We have been using Foreign Currency Direct for more than 10 years. They are very competitive and customer service is excellent.
Excellent friendly service always. We have used Foreign Currencies Direct for many years and always get an excellent rate and service. Can’t fault them.
Everything was managed perfectly. I felt secure in my transaction with foreign currency direct. Nothing was too much trouble and I would certainly recommend their services.