Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. The below table shows the difference in USD you would have achieved in Dollars when buying £200,000.00 during the high and low points of trading during yesterday.

Currency Pair% ChangeDifference on £200,000
GBPUSD0.8%$2260
US Shutdown Weighs Heavy on US Dollar

US Shutdown Weighs Heavy on US Dollar

The US Dollar remains under considerable pressure as political uncertainty continues to be a major driving force for Dollar exchange rates. In fact the US Dollar has become the worst performing G10 currency despite stronger economic growth and the likelihood of further interest rate rises throughout 2018.

Although the temporary Government shut down has been resolved for the time being this issue is likely to return again when government funding will expire February 8th. What has actually happened here is that the can has been kicked down the road another couple of weeks with no real further progress made.

US Dollar Cost of Future Shutdowns

The markets are now becoming concerned that there may be further shutdowns if negotiations over immigration continue to hit a stalemate. President Trump must decide whether to allow the 700,000 illegal immigrants who arrived to the US as children to stay and there is also the issue of building the wall between Mexico and the US and this all needs to be agreed in the Senate.

The last time the US shutdown took place was in 2013 and lasted for 16 days which could signal things to come. Government shutdowns are bad for the US economy and it is no surprise the Dollar has weakened so dramatically. Between 1995 and 1996 there were two government shutdowns which were estimated to have cost the government $1.4 billion. Considering Donald Trumps’ business background this may be a hard pill to swallow.

The issue of the debt ceiling is also starting to become a concern. Government shutdowns are one thing but Congress will soon need to agree to raise the US debt ceiling which is expected to take place sometime in March when funds run out. More political instability could follow at this time putting added pressure on the Dollar.

Data today sees US mortgage applications, existing home sales numbers as well as Purchasing Managers Index data for the manufacturing and services sectors.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me at jll@currencies.co.uk.

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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.