The Dollar ended last week on a high against the Pound after it was announced that the US economy had grown at its fastest rate in almost four years for the 2nd quarter of this year, much to Donald Trump’s delight. As a result we saw GBP/USD come close to testing the 1.30 level which was only briefly broken earlier this month for the first time in almost a year. The table below displays the range of exchange rates during the past 30 days, showing the importance of timing your transfer correctly to maximise your return.

Currency Pair% ChangeDifference on £200,000
Looking at today’s economic data, US Non-Farm payroll figures are likely to take centre stage, along with their latest Unemployment figure. Those clients with a GBP/USD currency requirement should be keeping a close eye on both of these key economic releases.

BoE and Fed rate decisions this week

The two main drivers this week on cable rates however will be the two Central bank meetings for the Federal Reserve and Bank of England on Wednesday and Thursday respectively. Many analysts are predicting that the BoE will raise rates to 0.75% on Thursday, whilst it looks as though the Fed are set to proceed with two further hikes before the end of this year, although one of those may not be as early as tomorrow evening’s decision. Despite the BoE looking like the more likely to elevate rates this week, I personally feel that the Dollar will finish this week the strongest of the currency pair. If the BoE do raise interest rates then they are likely to maintain a fairly dovish stance going forward and owing to Brexit uncertainties, I would expect them to commit to keep rates on hold for some time.

More bullish Fed could see the Dollar strengthen

In contrast to this, even if the Fed don’t raise rates tomorrow and with economic activity looking strong from the US of late, they could allude to further hikes for this year and this could give the Dollar a further boost against the Pound. In my opinion there is the potential for a breach of 1.30 in the short-term and therefore any clients looking to buy Dollars in the near future may wish to put a plan in place for their currency transfer sooner rather than later.

There could also be further opportunities for the USD to make gains against the Pound on Friday afternoon with a raft of economic data including Nonfarm payrolls, average earnings and unemployment rates. With the economy growing so dramatically this month as highlighted on Friday, if this Friday’s figures follow suit then we could see a further boost for the Greenback. With a busy week of data and lots of volatility potentially on the cards it is certainly worth speaking with your account manager at FCD to find out how this week’s data could affect your currency transfer and the wide range of options that we can make available to you.

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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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.