This US Dollar report will address the factors that could have an effect on exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 during the high and low points during the past 3 weeks.

Currency Pair% ChangeDifference on £200,000
GBPUSD2.2%$6,000
US hit with lacklustre Inflation level causes USD weakness

Interest rate hike Decision on Wednesday

The Dollar has had a relatively strong start to December against the Pound, having gained 2.2% since the start of the month. Even Friday, when Sterling gained against the majority of its currency counterparts on the back of PM May's Brexit breakthrough, the Pound's inroads against the Dollar were pushed back as impressive Job market data more or less set in stone the strong and stable status of the US economy of late. Of course, the markets are waiting for the widely expected interest rate hike due on Wednesday. I'm sure much of the gains have already been factored in for the USD as the Federal Reserve's 3rd rate hike this year has been talked up for a long time now. There is scope for a reversal in the trend should the Fed talk down the possibility of future interest rate hikes during 2018.

If you are looking to buy Sterling with Dollars, it may pay to capitalise on these levels whilst the going is good.

How could Trump's tax reform impact the dollar?

The Republicans have been targeted with pushing through Trump's tax reform before Christmas. It is expected to provide a stimulus of nearly 1.5 Trillion dollars to the US economy equating to growth of 0.3% by this time next year according to leading researches of Oxford Economics.

Wall Street has certainly benefitted by the push and I expect it to provide some support to the Dollar in the long run too. Some investment groups are expecting another 4 interest rate hikes throughout 2018 which would certainly leave the Dollar in a dominant position on the international stage. As a result, those holding out for the Pound reaching the 1,40 against greenback may be left disappointed. It looks very unlikely the Bank of England will be able to keep up.

Thank you for reading my US Dollar report, if you have any questions about an upcoming transfer I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here: bts@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.