The US reimposed sanctions on Iran on Tuesday, with US President Donald Trump stating that they are ‘the most biting sanctions ever’. He has also warned that they will ramp up these sanctions in November when the US will impose them on Iranian oil also. More on how this could impact global trading, and the USD in todays report. The table below shows the potential difference in Dollar return you could have achieved when buying £200,000.00 during the high and low points during the past month.
|Currency Pair||% Change||Difference on £200,000|
This began when Trump decided to withdraw from the Iranian nuclear deal entered into by the US, numerous EU nations, China and Russia back in 2015. He claims to have made this decision as Iran is still a threat to the US despite the deal, and he was a fierce critic of the agreement when it originally took place.
The reason this is relevant within the currency markets is because Trump appeared to be taking aim at the EU when he commented just yesterday that ‘anybody doing business with Iran will NOT be doing business with the United States’.
Trade talks between the US and China have been ramping up recently, especially now that China has adopted a more aggressive stance. The most recent threats regarding the Iran deal add fuel to the fire and although the US may be better prepared for an isolationist approach, the global economy isn’t so those with a US Dollar requirement should continue to monitor this issue.
Tomorrow could see cable (GBP/USD) fall even lower if the Continuing and Initial Jobless Claims data impresses. Expectations are for 1.759M continuing claims along with 217k new claims. Should the figures released be lower than these levels there’s a chance the Dollar could climb. As mentioned in the Sterling section GBP/USD is within 2-cents from its annual low.
US inflation levels will then be released at 1.30pm on Friday, with 2.3% expected YoY for July.
This is key because the Fed Reserve has adopted an aggressive approach to monetary policy recently, and a drop off in inflation could scupper further plans for rate hikes. Do keep in touch if you wish to be updated in the event of a major market movement. 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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