The USD has regained the ground it lost against Sterling last week, with the Greenback moving back towards 1.28 overnight. More on the positive economic data that has led to this US Dollar strength in today's Dollar report, the table below shows the range of cable exchange rates throughout the past month and the difference in USD you could have achieved when selling £200,000.00 during the high and low points of that period.
|Currency Pair||% Change||Difference on £200,000|
Sterling’s problems have already been well documented and with UK PM Theresa May under increasing pressure to find a solution to the current breakdown in Brexit talks, I am not anticipating the Pound to make any sustained inroads against the Greenback over the coming days.
However, this is only one of the reasons as to the current strength of the USD. The US economy has outperformed almost every market expectation and surpassed every growth forecast since the turn of the year. Despite reservations about some of President Trump’s policies, you cannot argue with the performance of the US economy since he came to office, with his aim to bring jobs back to the US deemed a success by the majority of economists so far. Whilst this of course does not tell us the whole story of the Trump presidency to date, the USD has enjoyed a fine run off the back of this positive sentiment.
This positive outlook continued overnight with the Atlanta FED lifting its third quarter US Gross Domestic Product figure to 4.7%. Whilst this is not the official reading, it is still an impressive figure none the less.
Whilst the general market feeling is positive, there are those with varying opinions. St Louis Federal Reserve President James Bullard feels that the US economy will start to slow and that we may well see the end of its “winning streak”. He cited slowing Productivity figures as the reason for his prediction and will heed as a word of caution to any clients looking for further improvements for the USD.
Looking ahead, US Trade Balance figures are released at lunchtime today and will make for interesting reading following Trump’s recent tariffs. Tomorrow sees the release of a host of employment figures, including Initial Jobless Claims. However, it is Friday that is likely to hold the most weight with investors with the official Unemployment Rate and Non-Farm Payroll figures. With these expected to show an improvement to 190k, we could see the USD make further gains against GBP as we head towards the weekend.
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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