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. The table below shows the difference in USD you would have achieved when buying £200,000.00 during the past month.

Currency Pair% ChangeDifference on £200,000
USD weakens as the year starts

USD weakens as 2018 starts

The USD has been on a downward trend against most currencies towards the end of 2017 and this trend continued yesterday. The issue that the markets are faced with now is deciding which direction the Dollar is likely to move in next as many economists are divided as to what is causing Dollar weakness, considering a rate hike in December to bring interest rates amongst the most attractive in the world and President Trump’s tax plan being passed which is set to come into law in early January and is seen as pro-business and pro-Dollar. One of the main theories behind the weak Dollar at present is a cooling over the US interest rate dot-plan. This is effectively an estimate of how frequently the US Federal Reserve will raise rates in the year. Current predictions are for 3 hikes this year however this could start to fade.

Low inflation is currently a ‘long-term’ concern for Janet Yellen, the current federal reserve chairlady. Whether this concern continues is another debate currently splitting analysts, with Jerome Powell set to take over this year.

It is also worth noting at present that the new tax reforms which have been brought into law in US are currently uncertain. Most of the Dollar’s strength throughout 2017 was due to fiscal plans set out by President Trump. It is now unclear of how much growth the cuts and fiscal spending will bring to the US economy and is being blamed for recent Dollar weakness.

Where next for US Dollar rates?

The first Friday of the month brings with it a new set of non-farm pay roll figures which have the capabilities of moving USD based exchange rates. The non-farm payroll data is often seen as good indicator of overall US economy strength and following USD’s recent weak performance I would expect this to be even more closely watched.

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