This US Dollar report looks at the cost of sending money overseas in the coming weeks, and what the factors likely to affect this are. The table below shows the difference in USD you would have achieved when buying £200,000 over the past month.
|Currency Pair||% Change||Difference on £200,000|
Expectations for the US dollar to strengthen further centre on the premise of further interest rate hikes in the future. There is an overall belief that this will happen again although it is largely down to the economic data we see released.
The US dollar is near 30 year highs against the pound since a higher interest rate helps a currency to strengthen by making it more attractive to hold. Investors have been piling into the US dollar as the US raise interest rates to 1-1.25%. With the Eurozone, Switzerland and Japan all experimenting with negative interest rates the US dollar seems like it will continue to remain very strong. From my perspective the GBPUSD market will overall continue to favour US dollar sellers.
Economic data up ahead for the US dollar is the Initial and Continuing Jobless Claims at 13.30 which could help the US dollar rise further if strong results are seen. Whilst US Unemployment is at a 10 year low, the Federal Reserve want to see lots of new jobs being created to warrant the current pace of interest rate hikes.
Tomorrow afternoon is more important US economic data with New Home Sales data and Manufacturing Purchasing Managers Index (PMI) data too. This is expected to back up the continued progression in the US economy and as such I see it being supportive of the US dollar. If you have US dollars to buy with pounds I think buying sooner is sensible since the outlook to me favours the greenback.
What had been helping US dollar buyers was Trump grabbing headlines with a lack of progress in his plans. Trump has however been keeping himself out of trouble. The Republicans scored a victory against the Democrats in a special election in Georgia earlier this week.
Trump is far from perfect but with the Democrats not making any real challenge and the US economy roaring ahead the overall view point for the US dollar remains positive.
For more information on how future data releases could affect your USD requirement, call our trading floor on 01494 725 353 or email me here.
I always use Foreign Currency Direct because the rates are competitive and the service is incredibly efficient and it is so easy to make transfers of currency abroad.