As expected the US FED raised interest rates last night to 2%, although as of yet the USD has made no further impact against Sterling or the Euro. The table below shows the difference in exchange rates between GBP and USD for the past month, and the resulting difference in USD you could have achieved when buying £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
The FED cited a strong a jobs market as the primary reason behind the hike, which is its seventh increase since 2015. US Unemployment fell to 3.8% in May, its lowest level since April 2000.
Despite the hike, they acknowledged that there was mounting concerns among US executives over trade, which is likely a key topic for investors over the coming weeks.
The USD itself has remained flat since last night’s decision, probably due to the fact investors had already factored in the likely hood of the increase to the USD’s current value.
Almost every major headline over recent days has been related to the historic meeting between President Donald Trump and Korean leader Kim Jong-Un. Whilst we are still waiting for the full details of the deal that has been put in place, both Trump and Kim confirmed that they had signed a document that has committed North Korea to complete denuclearisation. Trump described the event as a “historic” event, whilst Kim lauded his countries new global standing. However, as allude din yesterday’s report the USD has hardly reacted to the news and the movement we have seen has been negative.
In return Kim has agreed to complete denuclearisation, although he has not yet given any timescale for this or confirmed what type of “vetting” he will allow.
The most sceptical of us might question both leader’s motives but of course based on the previous antagonistic nature both ensued, Tuesday’s meeting is of course ground-breaking.
The USD itself has performed well of late, as global uncertainty pushed investors back towards the safe haven status of the greenback. However, this meeting has likely boosted investors global confidence and risk appetite and as such funds may start to be moved away from the USD and into riskier assets, which in turn could weaken its position.
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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