The greenback has wasted no time capitalising on the pound’s ongoing Brexit vulnerabilities having already gained more than a cent against sterling throughout yesterday’s trading, equating to an extra £1,600 on a well-timed $200,000 transfer.

Currency Pair% Change in 1 monthDifference on £200,000
GBPUSD3.5%$9,200

Key inflation data expected out tomorrow afternoon should help the dollar drive further, with the Producer Price Index release this afternoon, potentially providing a bit of early insight.

Both releases have been coming out strongly in recent months and there doesn’t seem to be much reason for these to be any different, so dollar strength could be expected.

The continuing and initial jobless claims release will also likely follow suit from Friday’s positive Non-Farm payroll data and provide even more support for the greenback.

With Brexit once again piling pressure on PM May it is hard to see anything that can help support the Pound this week. It does seem that for the short term at least, the dollar is holding all of the cards.

USD has prospered despite talk of an imminent slowdown in the US economy

Trade talks to weaken dollar’s grip long term

Uncertainty from global trade tensions could be set to resurface as after a brief period of peace, fresh threats of multimillion-dollar tariffs have once again hit the headlines. US trade representative Robert Lighthizer confirmed over the weekend that if US-China talks aren’t concluded by the end of February the hike from 10% to 25% on $200 billion dollar's worth of Chinese goods will once again be put on the table.

From a currency perspective it could have been argued that much of the dollar’s loss of momentum throughout the summer stemmed straight from China calling Trump’s bluff and raising their tariffs to match.

If we were to fall into a similar 'tit for tat' cycle as a result of Lighthizer’s ticking time bomb, there is an argument that the markets will struggle to get fully behind the dollar once again, potentially offering Greenback buyers some respite.  It will be interesting to see how the latest trade figures come out as a result of this on Thursday afternoon.

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