We could see further USD strength tomorrow afternoon with the release of US Retail Sales data, which has been improving consistently since December last year. This market report looks at how economic data as well as political factors are affecting the Dollar currently. The table below shows the difference in Dollars you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000

Dollar at best level to buy Pounds in 6 months 

The Dollar has strengthened recently hitting the best rate to sell US Dollars into Sterling in 6 month after a lot of strong data in the US combined with negative UK data.

10 year bond yields in the US are currently at 3% which has attracted a huge amount of global investment recently and this is one of the key factors in the rise of the US Dollar in recent times. The jobs report and unemployment levels have also shown very positive signs recently and this has provided further evidence in support of future interest rate hikes in the US.

The Federal Reserve have hinted that they will continue on their path of raising interest rates and whilst the data remain strong in the world’s leading economy I cannot disagree with their plans.

Dollar Continues to Weaken Against Pound and Euro

Will US Data improve the Dollar? 

Tomorrow afternoon we see the release of the latest US Retail Sales data due out at 130pm. This has been improving since December and with a figure of 0.4% month on month for April this could help to strengthen the Dollar against both the Pound and the Euro.

On Thursday Initial Jobless Claims will be announced and this has also been very strong for the last few months and I think another positive announcement will strengthen the Dollar so I think GBPUSD rates could be even lower towards the end of this week so if you’re thinking of buying Dollars it may be worth getting this organised early this week.

Could Political Tensions harm the Dollar? 

With US President Donald Trump having walked away from the Iran deal tensions are running high in Europe with a huge amount of European business deals at risk in Iran. Many of the firms involved fear that if they continue with their deals in the middle-east then trade with the US could be affected.

Previously some business such as many of the UK based banks who have traded with Iran have been hit with heavy fines so this issue could drag on for a while. It is difficult to see in what way the Dollar will move so make sure you keep in close contact with your account manager who can keep you updated with USD exchange rates.

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.