Trump has said that his intention is to seperate the trade deals between the US and Mexico/ Canada respectively, the other two countries in the NAFTA agreement however appear to be banding together to support one and other. 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|
At the moment the US is currently at loggerheads with a number of different countries primarily concerned about trade deals. The US has imposed tariffs on Chinese goods, put tariffs on good imported from the European Union and is still looking to renegotiate the NAFTA deal. Meanwhile the European Union are looking to impose their own duties on a number of US imports.
President Trump has said the terms in NAFTA will definitely change and he has been looking to separate Canada and Mexico in the negotiations. However, both Canada and Mexico are looking to stick together to remain strong and support each other.
US inflation data is due out tomorrow afternoon and with expectations of 2.1% this could give further support to a rate hike with the Federal Reserve due to meet on Wednesday evening. A rate hike on Wednesday will be the second of this year so far and the 7th since December 2015. The Unemployment rate in the US as well as Non-Farm Payroll data has been performing very well recently and this has given enough support to warrant a rate hike so I think we could see further Dollar strength towards the end of the week. Earlier this year the Fed hinted that they may be looking to hike rate three times this year so if we see a rate hike on Wednesday combined with hints of further hikes to come then this could see GBPUSD rates move in a negative direction.
At the G7 summit being held in Quebec this weekend Donald Trump has caused further outrage by announcing that he wants Russia to be allowed back in to the group. New Italian PM Conte also supported Trump in his request to allow Russia but this has upset the other members.
Tariffs were one of the key topics of the discussion and once again Donald Trump upset other world leaders by calling Canadian President Justin Trudeau ‘dishonest and weak’ and then saying Trudeau has ‘stabbed us in the back’ so again this could directly impact the NAFTA talks.
The agreements at the summit included demanding Russia stop its support for Syrian President Bashar al-Assad, a pledge to have Iran’s nuclear programme remain peaceful and an attempt to agree on climate change, which the US walked away from.
It appears as though the summit did not go too well and so expect some volatility for the Dollar during the early part of this week.
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