Will the US Dollar continue to go from strength to strength?

The US Dollar has been performing very well over the past year, not just against the Pound but against pretty much all major currency pairs.

The US Dollar index, which is a key measure of how the currency is performing as it measures the greenbacks value against a basket of currencies, hit its highest level since 2002 this week which demonstrates just how well the greenback has been performing.

For many the US Dollars surging value will have come as a surprise, and I think this is understandable when we consider how the originally planned 4 interest rate hikes by the Fed Reserve Bank hasn’t come close to materialising. Additionally, many analysts had predicted a sell-off in the Dollar’s value if Trump was to win the hotly contested Presidential Election this year.

Despite the Feds decision to hold rates and Trumps unlikely election, the Dollar has continued to climb and last month the Pound was the only currency that gained on the US Dollar of all the majors. It’s also worth noting the Pound is already coming off of its 8 week highs of around 1.27 against the US Dollar.

Key events this week to look out for in the US

Yesterday I covered in some detail the success of Donald Trump’s Carrier Corporation deal. By saving over 1000 jobs he’s endearing himself further to the people that voted for him, as he appears to be staying true to his planned policies.

He’s made the headlines again this week after threatening to cancel a contract with Boeing after claiming the costs of the deal to build the new Air Force One were getting out of control.

Aerospace and Defence sector shares had previously surged after Trumps victory due to his talk of rebuilding his nations military.

It’s these types of outbursts, whether on camera or through social media which I think could create headwinds for the Dollar’s value in future, and he’s already causing big swings within American stock markets. If you have a currency transaction to make involving the Dollar, it’s worthwhile making your broker aware of your price targets as the markets can move quickly in the current climate.

Later today both Initial and Continuing jobless claims figures will be announced at 1.30pm, with the new claims expectation at 268k. Feel free to get in touch if you wish to plan around this event.

For more information on how todays economic release could impact your US Dollar buying or selling requirement, call our trading floor on 01494 725 353 or email me here.

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