With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. In the below table we show the difference in USD you would have achieved when buying £200,000 during the high and low points during trading yesterday.

Currency Pair% ChangeDifference on £200,000
GBP/USD0.95%$2480
Reduced chance of UK rate hike drives cable to 5-month low

US Dollar Strength after Stronger Retail sales Data

The dollar has received an excellent boost following stronger US retail sales data which rose by 0.6% in July against expectation of 0.4% painting a better consumer outlook in the US economy. It is the biggest increase in seven months and helped drive the dollar higher touching a five-week high against the pound. US consumer spending accounts for a large percentage of economic activity so the data is welcome news for the dollar.

US building permits, housing starts and mortgage applications are all released this afternoon which should give some insight as to how well the housing sector is performing.

Tomorrow is also important with initial jobless claims and the Philadelphia Fed Manufacturing Survey which should give further clues as to the strength of the US economy. The detail in the economic data is crucial at this time considering that the US Fed may be thinking twice about raising interest rates again this year.

The US has struggled with inflation recently which has constantly fallen lower and this is likely to make the Fed pause for thought. The US is facing the same problem that the UK is battling with and that is weak wage growth. The Fed will not seek to hurt consumers in the pocket where they are already feeling the pinch and potentially destabilise the recovery. The next Fed meeting will be held in September although any hike seems more likely later in the year.

Trump vs North Korea – US Dollar Impact

North Korea has now reviewed its plans to fire missiles at the island of Guam but has decided to hold off. The apparent climbing down could see the recent escalation between the US and North Korea diffused for the time being, although nothing can be taken for granted. Any developments are likely to see considerable volatility for the dollar and a flight to safety to the likes of the Swiss Franc and US dollar if tensions resurface.

Thank you for reading my US Dollar report, if you have any questions about an upcoming transfer I would be more than happy to discuss them – you can contact me with any queries here.

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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.