Positive US GDP data has helped the Dollar briefly gain against the Pound, following USD weakness caused by Trump's trade sanctions levied against China. This market report discusses the factors currently supporting and hindering the USD; 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||% Change||Difference on £200,000|
The Dollar has weakened against both the Pound and the Euro during the course of this month especially in recent days following the announcement that a Trade War may be coming.
US President Donald Trump has proposed tariffs of US$60bn worth of Chinese goods coming into the US in an attempt to support US trade and labour. The US has suggested that it is ‘cautiously hopeful’ that a deal can be done between the two nations but could this be the beginning of problems ahead?
The US has also recently announced tariffs on steel and aluminium imports which has impacted on many countries including China. Roberto Azevedo, the Director-General of the World Trade Organisation, has said that the rate of expansion could be affected and confirmed that there could be a ‘big problem’ if the trade wars increase.
Azevedo went on to say that this issue could be one of the most difficult ones faced during the history of the WTO which was set up back on 1st January 1995. This has caused the Dollar to move above 1.42 during the course of this week and I think this issue is far from over so if you’re considering selling US Dollars it may be worth getting this organised in the near future.
Revised US GDP data for the final quarter of 2017 showed a revision from 2.7% to 2.9% and this helped the Dollar to fight back briefly against the Pound and it gives further support to the potential of a number of US rate hikes during the course of this year. Having raised interest rates earlier this month I think we could see 2-3 further rate hikes depending on whether or not the trade wars increase and cause a problem for the US economy. Later today the US will release Initial Jobless Claims as well as Personal Income data for February as US GDP was revised upwards yesterday I think we could see another positive release, which could strengthen the Dollar but overall I think the political uncertainty caused by the Trade Wars will continue to influence what happens with the US Dollar.
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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