As the US prepare for military action in response to the possible chemical attack in Syria, as a safe haven currency, during times of global uncertainty the USD can strengthen as investors move away from 'riskier' currencies. This USD report discusses this, and how the current situation could impact the Dollar 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 from the past month.

Currency Pair% ChangeDifference on £200,000
GBPUSD2.91%$8,520 USD

Largest amassing of US forces since Iraq 2003

The US is mobilising a very large naval and air strike force, the biggest since 2003 in response to Syria’s possible use of banned chemical weapons. Trump has made this public declaring on twitter this was the case and showing off the US’s ‘nice, new and smart’ missiles, and encouraging Russia to ‘Get Ready’.

Trump is well known for his bravado and a possible reaction on the currency markets would be for US dollar strength. As a safe haven asset the US dollar is used by investors to ‘hide’ away from risk elsewhere. Trump has actually backed down from some of this talk but the potential for any serious conflict and full blown war would likely see a much stronger US dollar.

Instead of this behaviour the US dollar has been gently weakening as concerns over the impact of Trade Wars threatens the currency. It is largely believed that trade tariffs act as a barrier to business and there is a concern this will hinder the progress of the US Federal Reserve in being able to raise interest rates.

A higher interest rate increases the attraction and strength of a currency, the next Fed meeting is the 2nd May and markets are expecting a further two hikes this year.

The US dollar has not risen much on this prospect largely because of uncertainty over the future direction of the US economy.
Dollar to take advantage of further EU and UK distraction

Best rates to buy GBPUSD since EU vote

The pound is performing very well against the weaker US dollar which is presenting the best rates to buy US dollars with pounds since June 2016. Increased confidence over Brexit and the prospect of the UK now raising interest rates have all helped to trigger a rise in the value of sterling which has been able to capitalise against the weaker US dollar.

Date of importance today would be speeches by a Federal Reserve Bank member Rosengren at 12 pm and then Kaplan towards the end of the day. However, I wouldn’t expect any big changes from these talks. Next week could prove more interesting with Retail Sales are released at 13.30 pm which will provide further insight into developments in the US economy.

Best rates to buy GBPUSD since EU vote

The pound is performing very well against the weaker US dollar which is presenting the best rates to buy US dollars with pounds since June 2016. Increased confidence over Brexit and the prospect of the UK now raising interest rates have all helped to trigger a rise in the value of sterling which has been able to capitalise against the weaker US dollar.

Date of importance today would be speeches by a Federal Reserve Bank member Rosengren at 12 pm and then Kaplan towards the end of the day. However, I wouldn’t expect any big changes from these talks. Next week could prove more interesting with Retail Sales are released at 13.30 pm which will provide further insight into developments in the US economy.

Whilst US economic data is important global events too influence the relative strength and weakness of the greenback as discussed above. Whilst the pound is up at such favourable levels against the dollar there are plenty of reasons to be cautious about it rising further.

Despite the possibility of Brexit concerns weighing down the pound GBPUSD rates should remain above 1.40, increasing tensions in Syria could however see market sentiments shift significantly.

If you have any USD dollar transfer to consider and wish for information on what lie ahead please get in touch with our expert team, you can call 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.