This US Dollar report will address the factors that are likely to affect exchange rates in the short term if you are buying abroad or making a currency transfer. The table below shows the difference in USD you would have achieved when buying £200,000 over the high and low points for the last month.
|Currency Pair||% Change||Difference on £200,000|
Today is expected to bring the second US rate hike of 2017, following what has been a series of delays and could spell another period of Dollar strength for anyone looking to sell.
However, this rate hike is far from certain. In fact with odds reversing slightly on a rate hike yesterday, the USD lost a full cent in value against the Pound yesterday.
The odds have reduced due to the projected release at 13:30 BST today of underwhelming retail sales and inflation data for the US economy. With inflation a key measuring point for justifying and interest rate hike, and with retail sales expected to only just avoid contraction from the previous month, this may be the kind of excuse the Federal Reserve may use to sit on their hands before moving. They would have received this information well in advance of an interest rate decision.
Given the still strong media expectation of a rate hike however, it may not be worth the gamble for anyone planning to buy USD’s on a rate hike failing to manifest. It may be worth taking advantage of the fear around the result this afternoon stoked by the poor data expectations at lunchtime, rather than hoping for additional help from the actual result.
Yesterday we saw the second high profile US official to be grilled over possible ties between the Trump Campaign and Russian officials. Jeff Sessions, the US Attorney General and former Alabama Senator sat through hours of grilling over the revelations from the Comey testimony, and over his previous false testimony that he had not met with any officials during the campaign.
Unlike Comey’s testimony, his responses were far vaguer. Trump has not invoked executive privilege, yet Sessions continued to state that he would not reveal anything in case Trump wished to use it later. Convoluted reasoning and many ‘I do not recall’s’ were the name of the game. This was not enough to impact currency rates, but this testimony shows this investigation will continue to rage on, keeping the Dollar under pressure.
Thank you for reading my US Dollar report, if you have any questions about exchange rates for an upcoming transfer I would be more than happy to discuss them – you can contact me with any queries here.
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