Retail sales data is due out on Wednesday which could lead to USD strength if the data comes out as better than expected following the recent signs of strength in the US economy. This report discusses the factors that could affect US Dollar exchange rates in the coming months. The table below shows the difference in USD 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

Strong US Economic Data

The rate to buy US Dollars with Sterling is close to its lowest level since early January after the US announced a surprisingly high figure of 313,000 new jobs according to the latest Non-Farm Payroll data on Friday afternoon.

US unemployment rates for February also held steady at 4.1% which is another piece of evidence in support of the interest rate hike coming on the 21st March. In fact the amount of new jobs created was the biggest rise in over 35 years.

However, although the jobs report was very positive the Dollar did not strengthen as much as expected owing to a fall in US wage growth for February.

US Average Earnings rose by just 0.1% compared to the expectation of 0.2% and this is why GBPUSD exchange rates did not move that much late on Friday afternoon.

The next factor to influence GBPUSD exchange rates is likely to come out tomorrow with the latest Consumer Price Index which measures inflation.
Strong US data strengthens the US Dollar

Inflation and US Interest Rates

The rate of inflation remains at 2.1% which is marginally above the Federal Reserve’s target so if we see more of the same this will provide further justification for the Fed’s decision to continue with their interest rate plans for this year of which expectations are for a total of 3 rate hikes with the first one coming this month.

On Wednesday US Retail Sales are due to be released and with the US economy showing signs of growth in recent times as well as a huge number of new jobs created, the data come out better than expected. This could see GBPUSD exchange rates move in a negative direction so if you’re thinking about buying US Dollars in the short term it may be worth getting this organised early this week.

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.