American giant UPS has suggested at the end of their post-earning conference call that they’re writing off nearly $40 million in currency fluctuations with other companies, announcing dividend cuts to account for the strength of the US dollar once repatriation of funds takes place.

The US economy is one of the only performing markets and the increase of interest rates over the past few years has made the US dollar one of the most lucrative currencies for investors. It is also considered a safe-haven currency and with so much uncertainty surrounding Europe, investors are looking for secure markets to hold their funds.

The Federal Reserve in the United States appear to be coming to the end of their plans to raise rates, with just one more potentially expected this year. Whilst this is unlikely to make much immediate change to the currency it may allow other economies to start to catch-up, so I believe we will see short term US dollar strength, potentially seeing the GBP/USD rate climb back towards the low 1.30’s at the turn of the year.

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