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 during the high and low points of the past 30 days:

Currency Pair% ChangeDifference on £200,000
GBPUSD3.72%$9,940
Data this week

Donald Trump

Since Donald Trump’s appointment US Dollar exchange rates overtime have been on the decline. Depending on your point of view the President has made headline news regularly due to his opinion which is normally aired on his twitter account. Recent comments made in the White House by the President about immigrants from certain countries caused a sell off of US Dollars as investor confidence decreased, however the President denies the comments were even made. Some people believe the President’s position is under pressure and I have to agree. In addition all eyes now to turn to the President and how he wishes to proceed with the NAFTA agreement later this month. He has made it clear that changes are coming, which again creates more volatility for US Dollar exchange and I expect we could see a further fall for the greenback.

Disappointing US economic data

The Federal Reserve at the end of last year forecast that it was likely to raise interest rates three times throughout 2018 as long as economic data supported it. December’s jobs report didn’t go to plan and the US economy created 148,000 jobs which was 42,000 jobs below expectation. Furthermore inflation numbers which have a major impact on monetary policy decisions dropped to 2.1%. If this trend continues then the three rate hikes looks extremely unlikely, again potentially weakening the US Dollar.

European strength

Regular readers will be aware that EURUSD currency pair is the most traded currency pair globally. In recent weeks EURUSD has climbed to a 3 year high reaching 1.23. To put this into monetary terms a $200,000 transfer into Euros now generates €27,500 less. As mentioned above the US Dollar has been devaluing but the Euro also has also been strengthening. Eurozone economic data has impressed over the last 12 months as the economy is growing at its fastest pace in a decade and unemployment is at a 9 year low which has led forecasters to suggest that the quantitative easing program could be wound down further this year. It was only last year the ECB reduced the Q.E program by €30bn a month.

GBPUSD currency transfers

For clients that are converting Pounds into US Dollars, exchange rates have now passed through an 18 month high which has provided a fantastic opportunity for buying US Dollars. The Pound has been performing well and the devaluing Dollar has presented the opportunity. Personally I expect GBPUSD could actually break through into 1.40s however I would keep a close eye on the NAFTA and Brexit trade negotiations that are on-going. For Sterling buyers it looks like now could be the time to trade.

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