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 of the US Dollar rate when buying £200,000 yesterday:

Currency Pair% ChangeDifference on £200,000
GBP/USD1%$2580

US Fed Expected to Raise Rates

The US Federal Reserve meet tomorrow where another interest rate hike is widely expected. In fact, it is a near certainty that there will be a ¼ point hike to 1.25%. Whilst some economic data has been more mixed of late the level of unemployment in the US which recently hit a low of 4.3% is likely to be used as a reason to take further action and hike but also to stick with the plan that was outlined earlier in the year.

This would normally have the potential to strengthen the dollar although in this instance it should be largely priced into the rate already. What will be more significant is the guidance that goes with this decision which is less clear as things stand. The Fed recently outlined another two hikes this year and then another three hikes in 2018 although as we saw last year, some flexibility needs to be allowed for.

Producer Price inflation data is released tomorrow which the Fed will be monitoring closely and Wednesday sees a host of data ahead of the meeting including Consumer Price Index inflation numbers.

Trump Investigation – Dollar Impact

The ongoing investigation into alleged Russian involvement in the Trump election campaign and the sacking of former FBI director James Comey continue to weigh on the dollar. There still remains the prospect that Trump could be impeached and while the investigation continues the dollar should remain under pressure. President Trump is now also feeling the pressure for not distancing his business empire far away from the Whitehouse giving him yet another headache. It has also been reported that Donald Trump may be sued for accepting payments from foreign governments which represents a constitutional violation.

This continued political uncertainty could give the Fed reason to pause although such a move is not expected this time round.

For more information on how future data releases could affect your Dollar 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.