This US Dollar update discusses factors that could affect USD exchange rates in the short term. The table below displays the GBP/USD movement during the last two weeks:
|Currency Pair||% Change||Difference on £200,000|
All of us at Foreign Currency Direct would like to share our condolences with those caught in the horrific attack in Las Vegas late on Sunday night.
The US Dollar, considered one of the most stable currencies will often strengthen upon attacks as investors choose to move their money out of riskier assets. An interesting point to consider from Monday is that gun manufactures share prices in the US rose by an average of nearly 5%.
The effect of terrorism on the market has decreased over the last few years as sadly it starts to become normalised due to the frequency of atrocious attacks.
Moving back towards economic influences, a US interest rate hike in December sounds like it is almost guaranteed from the Federal Reserve. Patrick Harker, a member of the Federal Open Market Committee said over the weekend he has pencilled in a hike in December along with a further three hikes in 2018. Should that be the case then that would see the US interest rate rise to above 2% at least by next year. Inflation is likely to hold the key as the jobs market and wage growth continue to appear strong. Last month’s level of 1.6% is still considerably lower than the targeted 2%, furthermore its worth bearing in mind that the average from 2012 is 1.3%. With that in mind the December rate hike should happen, however three hikes in 2018 might be a little ambitious.
If you’re looking to purchase US Dollars, then it may be in your interest to act sooner rather than later. If the rate hike in December is all but finalised with good data, this month then the GBP/USD rate could once again fall to the 1.30 level. Make sure you alert your broker to any upcoming requirements so you’re trading at the best time.
For more news on how upcoming events could affect your currency requirement, call our trading floor on 01494 725 353 or email me at email@example.com.
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