The GBP/USD pairing experienced a spike last week, which saw mid-market levels briefly exceed 1.31.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The spike followed a slump seen at the end of last month, which saw interbank rates drop to the nearly the lowest point this year.
When comparing the exchange rate during the highest points this year, back in April and the recent slip at the end of October, the difference is in the region of 16 cents, which is considerable movement in a period of only 7 months.
In monetary terms, well-timed transfers at the better levels seen back in April could have achieved over $31,000 more on a transfer of £200,000 than the potential return less than 2 weeks ago.
Following last week's mid-term election results which saw the Democrats take control of the House of Representatives, Donald Trump’s Republican Party were assured a continued Senate majority, which saw both sides claim victory.
In many ways, the House doesn’t have as much influence as the Senate; one point being the fact that Party members are only elected for 2 years rather than 6 as with the Senate, which inevitably gives them less time for policy changes between campaigns.
This being said, the various departments that make up the House, do ultimately have influence over how money is spent. One key factor which will be of concern to Trump will be the abilities that the House Investigations Committee have to open up potential investigations into his own administration. There are arguments to suggest that much of the greenback’s strength this year has been in response to Trump’s bullish approach to trade negotiation. The quesion that remains is whether or not these influences in Government will hinder his policy approach and in turn USD performance going forward.
There will be Inflation data and retail sales data released from Wednesday which could affect USD pairings, but I personally feel that short term movement will largely be influenced by geopolitical developments, such as the UK’s separation from the EU.
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