As the Greenback still sits near multi year highs against the pound we are starting to see cracks in the Trump effect that may just test investor appetite for the dollar. Yesterday, Trump’s presidential prowess took a blow as his proposed vote on a new healthcare bill has been delayed despite the US president confidently guaranteeing he would win the number of votes needed to pass the bill moments before. This has led some to question Trump’s ability to for fill his other economic reforms that have served as foundations for the relentless drive from the dollar since his election back in November.
Drawn in by the promise of multiple interest rate hikes with the safe haven status, investors have been flocking to the USD which has been relentless in capitalising on the political and financial uncertainty in Europe and has seen its value saw to multi decade highs.
However, we may now be starting to see a reversal in fortunes as a slowdown in existing homes sales and an increase in jobless claims could reinforce Fed Chair Jannet Yellen’s cautious stance, limiting the likelihood of another interest rate hike in the near future. The Greenback may weaken as a result.
If you have a long term US Dollar selling requirement why not open a free account with FCD and have one of our currency specialists help you build a plan of action around these variables.
Yesterday saw sterling continue its drive against the greenback reaching monthly highs of 1.252.
Today’s US manufacturing data is set to come out strongly at 54.8. This coupled with GDP figures and positive labour market data, some experts a projecting the gains won by the pound this week to be reversed.
If you are a US Dollar buyer it may be wise to get in touch with your account manager today in order to limit your exposure. Given the volatility expected throughout next week as a result of the uncertainty surrounding the triggering of article 50, is it worth leaving your returns to chance? Call us today on 01494 725 353.
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