Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements during trading hours yesterday affecting USD rates when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBP/USD0.5%$1280
The US dollar could see considerable volatility this weekend

USD – North Korea – Foundation Day

The US dollar could see considerable volatility this weekend if developments continue to unfold in North Korea. Geopolitical tensions stemming from North Korea continue to drive the markets with a flight to safety to the US dollar, Swiss Franc and also gold as to be expected.

This Saturday marks Foundation Day in North Korea and is one of the most important days in the North Korean calendar. After North Korea conducted its sixth nuclear test last weekend there is every chance that Kim Jong Un may look to demonstrate another missile or nuclear test, escalating tensions further. Any developments here or firing of any Frankenstein missiles could see major market volatility.

To date there has been some currency volatility but the markets have largely shrugged off the threat of nuclear war. Any further escalation could see the use of military action and should not be ruled out.

The North Korean Ambassador to the UN has said that North Korea is ready to send more “gift packages” to the US in a clear sign that things could deteriorate further before they get better.

Fed Vice Chairman Resigns – USD Impact

The Federal Reserve vice chairman Stanley Fischer has handed in his resignation midterm and is expected to leave in October. This is important as Mr Fischer has shown himself to be a hawk who wants to continue to raise interest rates. He is also a believer in more regulation. His resignation will allow US President Donald Trump to put in place another member who may have influence to tilt the Fed towards less regulation. This could have the effect of changing the course of interest rate increases going forward and the dollar could come under pressure. The President will also have to decide whether to offer Fed chair Janet Yellen a second term.

US Data – Dollar Outlook

There are a handful of US economic data releases this afternoon to include jobless claims and a speech from US Federal Reserve member William Dudley. Any clues as to whether the US Fed will look to hike could see additional volatility for the US dollar. US non-farm payroll numbers last week arrived weaker than expected which in my view wipes out any prospect of another interest rate increase at the next meeting September 20th. The Fed may look to hike in December and go for the hat trick considering December has recently proven a popular month to hike although next year could now be the earliest with the changing outlook. The dollar could see some more weakness if the economic data continues to look on the softer side.

Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail 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.