Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting US Dollar rates when buying £200,000 at the high and low points for the past week:
|Currency Pair||% Change||Difference on £200,000|
We are actually 2 cents higher to buy US dollars today than compared to the lows we had earlier this week. The big question for both US dollar buyers and sellers is what happens next and what is the best strategy to take? Janet Yellen, Chairlady of the Federal Reserve in her testimony yesterday to Congress caused the US dollar to weaken by appearing dovish. What this means is that where many had predicted her to be quite hawkish (strong) about her position on the likelihood of raising interest rates further, she was in fact more dovish (soft) cooling those expectations and leading to the US dollar weakening. Anyone looking to buy or sell US dollars in recent years will know the expectations on interest rate hikes have been the main driver for the currency.
As the expectations of further hikes increase the dollar strengthens, as the expectations cool the dollar weakens. Today is a flurry of important economic data at 13.30 that will be pored over very closely and could see an interesting end to the day.
Today we have a whole host of important economic data in the form of US Retail Sales, Inflation data and also some speeches by the US Federal Reserve members. Buying $200,000 today is £1700 less costly than on Wednesday but this afternoon’s data might neutralise the close to 2 cents improvement for US dollar buyers with pounds. Retail Sales are expected to post an improvement and this might help the dollar to strengthen.
However with a range of other data also released and the potential for some surprises, clients buying and selling US dollars should be highlighting their position to their account manager here who can monitor the outcomes.
Trumponomics and Obamanomics are all turns of phrase associated with fiscal policy to help the American economy. Mick Mulvaney is the Republican Director of the Office of Management and Budget (OMB). He yesterday launched a plan to get the American economy to 3% growth or its ‘natural state’. The plans have already been met with much scepticism, unfortunately Donald Trump and the Republicans have failed to implement fully many of their plans.
The currency markets have really lost faith in Donald Trump and I cannot see this changing quickly. Looking into the forecast on the US dollar therefore we could easily see the currency weaker in the future and rates rising above 1.30 could be seen again.
The picture on GBPUSD remains mixed but the excellent levels for US dollar sellers in the low 1.20’s might have now passed. I expect the range that for the last quarter that has occupied 1.25-1.30, will gently drift to 1.27-1.33. If you have a transfer buying or selling dollars please check in with your account manager to keep up to date with the latest forecast.
Thank you for reading my USD currency 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 here.
Jonathan Watson as ever, ensures a smooth, reliable and trustworthy transaction for the second time of service! Delightful to deal with – efficiency personified. Thank you Jonathan. Would recommend highly – 5Star.
Excellent initial guidance, and during the transaction regular communication and updates. Dealing with Jonathan Watson was a pleasure. Very reassuring.
Jonathan Watson provided very helpful advice throughout the process, as well as immediate responses to our inquiries. He and his team were patient and thoroughly professional, which helped us through some stressful moments following the sale of our property in France.