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 US Dollars you would have achieved when buying £200,000 during the high and low points of the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
In my opinion the 1.35 mark could become a reality over the coming weeks and months. With Trump's continued outlandish comments and behaviour causing USD weakness, I feel the Pound could break the 1.35 mark in the coming weeks. At the time of writing GBP/USD rates are sat at 1.3060 which is extremely close to a six-month high within the market for this currency pairing. With continued perceived weakening of sterling since the election some may have thought that GBP/ USD rates may have moved further apart, however with President Trump still struggling to pass vital healthcare reforms and recent polls revealing he has the lowest confidence vote for a new president in recent time the dollar has taken a real dip off of this lack of confidence in recent weeks.
It is thought that traders are turning against the USD with speculative positions turning net short for the first time since May 2016. This simply means that more traders think that the value of the dollar will fall in the recent weeks and months ahead rather than rise. This was according to a recent Reuters poll. This is a worrying sign for those who are wishing to sell the USD and I would recommend being in touch with your account broker here as soon as possible to discuss your future options.
Over the night the federal bank decided to keep interest rates unchanged at 1.25% this had been much expected and we saw no real shift in movements within the market off of the back on this news last night. It is now thought that we may not see any further rate hikes in 2017 at all after the recent performance by the dollar and continued lack of confidence in President Trump.
The nonfarm payrolls release is due out a week tomorrow and this represents the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. The number is also subject to strong reviews in the upcoming months, and those reviews also tend to trigger volatility in currency markets. Generally speaking, a high reading is seen as positive for the USD, while a low reading is seen as negative, last month these figures came in significantly lower than expected and if we see a similar result this time around be prepared for any market movements.
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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