GBPUSD rates have also been fairly range bound recently, swinging around the allusive 1.30 interbank rate of exchange. Some may choose to see above 1.30 could be perceived as a good buy and anything below as a good sell. The main drivers for the pair have been UK Brexit updates but also economic and political updates from the United States. Most recently over the last 2 weeks US-China trade talks have been showing improvements and the longest Government shutdown on record came to an end. Both are positive signs for the USD which has been attributed to the reason for the greenback’s recent strength pushing GBPEUR interbank rates down 4 cents in less than two weeks.
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Next on the horizon from a data perspective is industrial productivity this afternoon, which is expected to show a contraction and also consumer sentiment index which is expected to remain positive. Out of UK working hours this afternoon is the release of the latest oil rig count in the US which could be of some interest. As a result of the US's explosion in shale oil, it has recently become the UK's largest oil supplier.
On the 25th January President Trump agreed to three weeks spending deal that re-opened the US Government from a 35-day shut down. (The shutdown started as a result of the President refusing to sign a funding agreement which did not include an allocation for his promised wall.) Currently there is a deal on the table which President Trump has suggested he would agree to. This would fully re-open Government however it does not include enough funding for the wall that he promised as part of his campaign.
Details of the full deal have not been released but it is expected to show enough funding for just 55 miles of new fencing, much less than a 2,000-mile wall he promised.
This deal is yet to be passed by Congress and the President but was expected to be passed this week. This however now looks unlikely and could be next Tuesday as the US is closed on Monday for Presidents Day, which is a coincidence. When a deal is finally reached, the USD maystrengthen and get more expensive to buy.
Recently the deal has been moving forward however only this week President Trump has suggested that he may delay and push back on the 1st March deadline. America had set the deadline and if missed could result on tariffs on $200bn worth of imports from China .This would put more pressure on the Chinese economy so may well be a negotiation play. This is a topic which will continue to impact the USD and may weaken the Dollar if this deadline is missed as it heightens trade wars between the two largest countries globally.
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