The US Federal Reserve Inflation target of 2.0% was reached yesterday which means inflation is moving at its fastest annual rate since 2012. The news helped the US Dollar strengthen a little with the currency dipping below 1.30 against Sterling for a few moments yesterday. More on this and an update on NAFTA trade talks in today's USD report. The below table shows the difference in USD you could have achieved in return when selling £200,000.00, depending on the timing of your transfer and the available exchange rate.
|Currency Pair||% Change||Difference on £200,000|
The main impact of inflation at this level is the likelihood of future interest rate hikes, as it essentially guarantees a hike next month. The main debate over the last few weeks has been if the Federal reserve will continue on their rate hiking plan or more significantly when it might stop. If inflation continues to rise it could cement several more hikes in the next few months, something many analysts believe could further strengthen the US Dollar affecting long term trade.
Now that the Fed has reached their target level something that has been pursued for six years, there may be a change in tact. The US Dollar has benefited greatly from rate hikes over the last 18 months driving.
Talks between the US and Canada are continuing after Mexico and the States appear to have a deal sorted. Canadian Prime Minister Justin Trudeau has taken something of a similar stance to Theresa May during Brexit by suggesting no deal is better than a bad deal. However yesterday afternoon both him and Trump appeared to be confident that that the talks are progressing.
The NAFTA agreement could have a significant effect on the US Dollar as their main trading partner. The tariff’s that could be avoided by a deal should help the prospects for both nations and help keep the US Dollar value high.
It looks as though the GBP/USD will remain around the 1.30 level for a considerable time. If you’re looking to complete a currency transfer, make sure you’re in contact with your account manager to discuss your best options.
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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The service was effortless to use and I was kept up to date all the way through the process with courtesy calls and advice from the same contact in the selling of my home abroad and returning the funds back to the UK. I would highly recommend this service to friends and colleagues in the future.
Efficient service and good rates. My currency reached my overseas bank same day!
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