Friday afternoon saw a double whammy for the US Dollar as strong economic data and a very confident Donald Trump helped improve the prospects of the greenback. The US Dollar was already faring well but this has given it an added boost helping it to remain very close to the best rates all year against both the Euro and Sterling. The table below displays the difference in return you could have achieved when buying £200,000.00 during the high and low trading points of the past month, showing the range of exchange rates for that period.
|Currency Pair||% Change||Difference on £200,000|
Donald Trump praised the economic growth in his tenure as GDP rose to 4.1% presenting the best growth since 2014. For any clients buying or selling US dollars we have some vital pieces of economic data in the form of the latest US Interest rate decision on Wednesday evening, and Non-Farm Payroll data on Friday.
Expectations are for the US Federal Reserve to lay the foundation for a hike in September. This will set US interest rates as the highest in the world’s leading economies at 2-2.25%. With the US dollar very much on the front foot, the big movement seems most likely to come from any disappointment in the high expectations being set lately.
Trump’s positive meeting with the EU is good news for the US dollar and global trade. This move strengthens Trump’s position against China in that he now has an ally. The EU and US together have now set an agenda aimed to reduce global intellectual property theft, a clear swipe at some of China’s more subtle global ambitions.
GBPUSD rates could have a choppy end to the week with the UK interest rate decision on Thursday followed by the Non-Farm Payroll and US labour data on Friday afternoon.
The best strategy for US Dollar buyers has seemed to be to capitalise on any small improvements and that seems to once again, be the safest strategy.
Brexit negotiations still have a long way to go and seem more than likely to continue to hold back Sterling. In contrast to the US, which is roaring ahead could easily put the 1.30 level under pressure if the US data is good.
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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