It would appear the US Dollar will remain strong for the short period, but as we move closer to the US elections we could see Dollar weakness starting to shape. Since April 10th last month we have seen swings of $12,962 USD on a £200,000 purchase

Will the Federal Reserve raise in June?

The US dollar is stronger against a weak pound as sentiments still favour the raising of interest rates in the United States. The next meeting of the US Federal Reserve is the 15th June and markets are no longer as assured of pricing in a further hike for then. Last week saw a mixed run of Unemployment data plus Q1 GDP was low at 0.5% which has led the Fed to rethink any planned hikes at this stage. Unemployment remained at its pre-recession 5% (an 8 year high) but the number of new jobs created was much lower than forecasted.

Despite markets slightly wary of any looming hikes the dollar is strong and I feel this is because against central bank and political actions elsewhere the USD is still likely to be a strong performer and seems a safe bet.

The US is on a path to raising interest rates whilst the UK is voting to leave the worlds biggest trading bloc and Japan and the Eurozone are using negative interest rates and Quantitative Easing to boost their economies. The US election is without doubt likely to feature more heavily on USD sentiment in the coming months and weeks, with neither the two main candidates, Trump or Clinton very popular, the dollar will become susceptible to further weakness.

US Data to round off the week

With a range of lower tier releases unlikely to cause significant impact I expect the dollar to hold firm this week as positive sentiments remain particularly as the pound is looking vulnerable once again. Friday is Retail Sales data at 13.30 which is the biggest economic release of the week for the US and likely to be a market mover. If you have any dollars to buy or sell making plans around this event is sensible as any figures outside of expectation could lead to volatility on the Dollar.

Very little economic data will be released for the US this week, but Friday will provide us with US Retail sale figures which are likely to be a market mover. If you need to purchase USD in the short term we would recommend planning around this event. Email me at jmw@currencies.co.uk ahead of this release.

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