This report will examine the factors that could affect US Dollar exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference in USD you would have received when buying £200,000 at the high compared to the low for the past month.
|Currency Pair||% Change||Difference on £200,000|
The US Dollar made significant gains throughout yesterday following from the news that the Federal Reserve decided to raise interest rates on Wednesday evening to 1.25%, the highest level since 2008. The statement following this announcement showed that the reasons behind the hike were a run of strong US economic data and an ever improving labour market.
The Dollar gained by over 1 cent against the Pound and the Euro over the course of yesterday morning, however these gains were quickly reversed following the news that, although interest rates in the UK would be kept on hold, more members of the Monetary Policy Committee had voted for a rate hike than had been expected.
A mixed bag of US economic data meant that the Dollar struggled to claw back any of its losses, as Initial Jobless Claims data was released better than expected, with fewer people in the US filing for first time unemployment benefits, but Industrial Production figures came out far worse than the previous month and expectation.
It has been reported that Donald Trump has come into the firing line and is being investigated for obstruction of justice by the council investigating Russia’s interference in the US election last year, and whether he attempted to put a stop to the investigation. Trump took to Twitter once again, calling the investigations a ‘Witch hunt’. As this is the first time since becoming President that the allegations are actually pointing to the President himself, I would expect this to impact the value of the Dollar as further developments unravel.
US data is relatively light next week, however focus will be on Tuesday when the Federal Reserve will release their Monetary Policy report, and could provide an insight into whether another interest rate hike is on the cards in the near future. As the FED suggested the possibility of another hike this year in its statement on Wednesday evening, any further clues could provide clients looking to sell Dollars with another great opportunity to do so.
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