This US Dollar update discusses some of the factors that could affect USD exchange rates this week. In the table below you’ll see high to low GBP/USD exchange rate movement when exchanging £200,000 to US Dollars over the last month.
|Currency Pair||% Change||Difference on £200,000|
The US Dollar has been under pressure of late, which hasn’t been helped by the ever-growing tensions between the US and North Korea. Donald Trump issued his firmest warning yet at the UN General Assembly Hall yesterday that the US would have ‘no choice than to totally destroy North Korea’, unless Kim Jong Un backed down from his nuclear threats, whilst calling him a ‘rocket man on a suicide mission’. So far North Korea’s nuclear testing and missile launches have caused earthquakes and tremors across the world.
A raft of US data was released yesterday including Housing Starts and Building Permits, and Imports and Exports data, all of which were released far better than expectation. Housing Starts data reviews the number of new single-family homes being built in the month of August, and Building Permits looks at the earlier stages with new planning permissions being issued. Although this positive data caused the USD to strengthen, it wasn’t enough to make any considerable gains and investors’ attention was bought back to the current global concerns.
This evening at 7pm the US Federal Reserve will release their latest Interest Rate decision, and although it is widely expected that they will choose to keep interest rates on hold, any suggestions of another rate hike this year, or hints as to how many increases to expect next year, could cause the USD to strengthen significantly against its currency counterparts. It is also expected that the Fed will announce the selling of its bonds in order to begin clearing its balance sheet, another sign of a strengthening economy.
Investors will be hoping for a rate hike in December of which there is currently a 50% chance of occurring.
We are still seeing some of the best levels to buy Dollars since the referendum last June, and these gains could be quickly reversed should the FED decide to act.
For more information on how future events may affect your USD exchange call our currency experts on 01494 725 353.
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