Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting USD rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
GBP/USD rate continues to trade around 1.29, with the greenback finding sufficient support to hold its position under 1.30 against the Pound. The markets continue to be driven by the negative sentiment around Brexit, so any major advances for Sterling look unlikely in the short-term.
Whilst this has been discussed earlier in the report, the US economy faces its own problems. The devastation caused by Hurricane Harvey is likely to have a direct impact on the US currency, with relief efforts likely to cost the country billions of dollars. Production levels of oil output will fall and with labour restricted in much of Texas and other Southern states, this downturn will directly impact the US’s economic productivity levels.
Despite the US returning to 3% Gross Domestic Product (GDP) growth, a figure which President Trump promised when he entered the White House, a report by a senior analyst last week indicated that is not well below the surface.
He suggested that the Trump effect is having quite the opposite impact, to the positive tag lines emanating from the White House and much of the life has actually been sucked out of the American economic juggernaut over the last six months. He backs this theory up by pointing to inflation levels, which have fallen alarmingly since the turn of the year.
Core inflation is considered a key barometer of an economy's health and as such this could have a telling impact on the US economy over the coming months and in turn the value of the USD.
Add to this concerns over the escalating rhetoric between the US & North Korea and those clients holding the greenback may wish to be prudent and protect their positions, which are still trading at some of the best levels seen in recent years.
The recent drop in value of the USD against the EUR is proof that the dollar is not impenetrable, so any upturn, however slight in the UK’s Brexit negotiations, could push GBP/USD back above the key 1.30 threshold.
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