In dramatic scenes played out across the US TV networks yesterday, Trump’s preferred Supreme Court appointee Brett Kavanagh was forced to deny accusations of sexual assault. In an uncomfortable Senate hearing he denied accusations but refused to clearly back an FBI probe to clear his name. The USD report below discusses how political uncertainty such as this could impact the safe haven currency, with an outlook to upcoming economic data from the US. The table that follows shows the difference in cable rates when selling £200,000.00 during the high and low trading points of the past month.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The Supreme Court is America’s highest court and an appointment is for life, allowing a Trump backed representative to influence policy on many important issues for decades.
The US dollar is actually slightly stronger in early morning trade, owing to more global factors. However, this political scandal just proves how close Donald Trump and his associates can sail to the wind. It is indicative of the kind of turmoil in US politics that could very easily flare up and raise all sorts of problems for not just Trump, but also the US dollar in the future.
The US dollar is slightly stronger this morning owing to uncertainty over Italian debt problems, this has seen funds moved from the Euro to the US dollar, helping the greenback rise. The US dollar does not really need to much help from overseas, there is certainly enough good economic news to keep the currency strong.
The US Federal Reserve, America’s central bank, raised interest rates to 2.25% this week, citing strong economic growth predicted for the next 3 years. This is in response to their ever-improving economy, which grew 4% last quarter, some of the best growth in 4 years.
Today at 13.30 is the latest US Inflation data, which is predicted to come in line with the previous reading of 2%, the Fed’s target. Any deviation could impact short term movements, despite all the positivity, the US dollar has been weaker earlier in the week.
The Trade Wars with China are yet to send shockwaves through the global economy but they certainly have the potential to. So far, the disputes have not majorly escalated. The new tariffs of 10% on $200bn worth of goods came into force this week but by being less than the 25% worth many had previously expected, the US dollar was not sold off.
GBPUSD levels have been more comfortable above 1.30 but this could very easily change on any fresh negative news on Brexit. This weekend’s Conservative Party Conference could easily destabilise the pound and lead to further slides. Until we can fully understand just what Brexit means, I do expect tough times ahead for the pound.
Whilst the US dollar’s recent weakness seems most likely to keep the GBPUSD pairing above 1.30, it will not take too much to knock us back. Despite more recent fresh concerns over the dominance of the US dollar, I see the pound continuing to struggle and the market favouring the greenback in this pair.
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.
Contacted Jonathan M Watson following his advisory report on the BBC. He was clear, concise and took the time to completely understand my financial & personal position. It was my first time purchasing a chalet abroad and therefore understandably nervous about trusting someone I had never met with so much family money! Jonathan proved to be responsive to all my requests, telephoning immediately upon any query.
Service is always excellent. I have been a client of Jon Watson for many years and always feel that I receive a personal service. I have recommended them to many of my contacts and will continue to do so.
Service from Jonathan Watson was more than 100%, more than a pleasure to do business with, a gentleman of the highest order.