Daniel Wright
Sales Director
US Dollar strengthens against the Pound
Upbeat US business activity and increase in new home sales support the US dollar.
Request a quoteSterling fell in value against the US dollar on the interbank market this week, in part because the financial markets are awaiting clarity in the UK’s Brexit negotiations, as explained in the GBP market report. In addition, and paradoxically, the US dollar has strengthened, as it’s been announced that US President Donald Trump faces impeachment.
Historically, this would weaken a sitting President, yet in Mr. Trump’s case may improve his chances of winning re-election in 2020. Meanwhile, the US economy continues to do well, while the Federal Reserve is publicly debating its next interest rate decision, which may affect the greenback, looking ahead.
Trump faces impeachment
This Tuesday 24th September, Nancy Pelosi, the Speaker of the US House of Representatives, announced that she’d begin impeachment proceedings against President Trump.
Mrs. Pelosi has taken this severe step, because there’s evidence that, on a recent telephone call, President Trump asked Ukraine’s President Volodymry Zelensky to look for incriminating material about President’s Trump’s Democratic presidential rival, former Vice President Joe Biden, and his son Hunter. Ahead of the call, it’s thought that President Trump held $400 million aid from Ukraine, which could be considered extortion.
US business activity upbeat, new home sales rise
Elsewhere, America’s economic performance this week has been largely positive. For example, according to IHS Markit’s US composite PMI for September this Monday, the United States reached 51.0, above economists’ forecasts for 49.6. This may indicate that US business activity continues to expand, when investors had predicted that it would contract.
In addition, this Wednesday the US Census Bureau published that US new home sales increased by +7.1% in August, to 713,000 units, above economists’ hopes for +3.5%, to 660,000 units. This suggests that America’s housing market is prospering, perhaps following the Federal Reserve’s (Fed) recent interest rates cuts.
Fed debates next interest rate decision
In addition, following the Fed’s decision to lower US interest rates last week, to 1.75%, -2.0%, the US central bank’s policymakers have begun to debate the Fed’s next steps.
For example, Fed Vice Chairman Richard Clarida, who supported last week’s reduction in borrowing costs, remarked recently that “There is a slowdown in global capital spending and global manufacturing and also some pretty important dis-inflationary forces.” For Mr. Clarida, this vindicates the cut.
However, Boston Federal Reserve President Eric Rosengren, who opposed last week’s cut, has argued that reduced borrowing costs could contribute to a stock market bubble, and lead households and businesses to take on too much debt. This debate could affect the value of the US dollar in future.
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UK
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Australia
I decided to use this company after reading many blogs by Daniel Wright on the forecast of Sterling. He always seemed to get his predictions right and also seemed to have not only very good knowledge but a passion for the industry he is in. Daniel was not only informative but patient and gave us options on the lead up to our currency exchange.
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France
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UK
A totally reliable and trustworthy service. I have used them on three occasions now and my money has always come over on the agreed date at the agreed rate. Daniel Wright is a pleasure to deal with -patient, personable and professional.