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 in just a month affecting US Dollar rates when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBPUSD2.38%$6320
another 2 members of the FED will give speeches on Friday.

How will the Tax reforms affect the Dollar?

In light of the festive break, the Dollar hasn’t had much in terms of data that could influence Dollar exchange rates. On Friday before the festive break, President Donald Trump signed the $1.5TN tax bill into law. This marked a significant victory for President Trump and the Republicans in what has been hailed as the 'biggest tax cuts and reform in our country's history'. However, in what was once labelled as a positive for the US economy, economists have now turned sour on the bill claiming its boost to growth will be minimal and could adversely affect the US Dollar. It will be interesting to see how the Tax reforms pan out and what affect this will have on the economy and therefore the Dollar. The reform won’t be enacted until early 2018.

Will the US Federal reserve continue to raise interest rates?

One of the main drivers behind the US Dollar's strength throughout 2017 was the US Federal Reserve's decision to raise interest rates three times to 1.5%. This has attracted investors who now gain more returns on leaving funds in US. The Tax reforms in the US have helped to raise expectations that the Fed will raise interest rates a further three times throughout 2018, bring the central bank rate to 2.25%.

Data releases for the rest of the week

On Thursday, the latest set of employment data for December will be released in the form of initial jobless claims, followed by the Chicago purchaser’s managers index data. As data over the festive period light, and investors take time off, there is usually less liquidity in the markets, meaning these data releases have the capability of moving exchange rates that much more, make sure to be in contact with your broker to make sure you are covered.

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 lme@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.