Following further positive data from the US and doubts surrounding the economy settling, a further interest rate looks set to be made and the Dollar has in turn improved over the last few weeks. The Dollar report below addresses the recent data releases from the US and how these could impact the Dollar in the short term. The table below shows the difference in USD you could have achieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
Yesterday the latest Services PMI data and ISM Non-Manufacturing PMI data for May showed the US economy is continuing to power on. The US Dollar has strengthened significantly in the last few weeks with a well-timed transfer of $200,000 into Sterling since the start of May achieving you an extra £4,300.
This trend looks set to continue as uncertainty surrounding the US economy seems to have been all but removed and the prospect of further interest rate hikes this year are all but guaranteed.
The strong jobs market data last week has been followed by solid services data which makes up 85% of Overall GDP in the US. Furthermore adding to last week’s positive jobs news, April marked only the second time since 2000 that there were fewer unemployed than jobs open.
From an investors perspective over the next few months US commerce and industry could move into a boom, which obviously makes the US Dollar a considerably attractive currency for investors as the Federal reserve tighten policy to match the economic climate.
Towards the end of this week there is a few data release of note with the latest trade balance data expected today. This release over the course of the next few months and even years could come of major significance as the trade tariffs introduced by Trump are to close this gap. This afternoon the deficit is expected to show the US has exported $49bn less than it imports.
To end the week the Baker Hughes Oil Rig Count shows the number of active rigs in the US. This is can be an indicator of the amount of oil being produced, which at the moment with oil at a multi-year high can have an impact on the markets.
If you’re looking to purchase US Dollars, days like yesterday can provide windows to purchase currency even when the trend is moving against you. Therefore it’s vital to be in constant communication with your account manager.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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