The US Dollar has continued to fight back against the Pound this week and has already moved by 2 cents during the last few days or the difference of £2,400 on a currency transfer of USD $200,000.
This movement demonstrates how volatile the currency markets are and highlights the importance of being kept up to date with a currency broker.
After seeing some indifferent economic figures Stateside the data published yesterday showed an improvement in the services sector of 59.7 from 56.7 compared to the previous month. This piece of economic data is likely to provide further evidence in support of raising US interest rates and we could see further support for the US Dollar at the end of this week.
US Non-Farm Payroll data expected on Friday
On Friday the US will release its latest unemployment figures in the form of US Non-Farm Payroll data and wage growth. The prediction is for a fall to 180,000 new jobs created. Anything different could cause volatility for GBP/USD exchange rates. Indeed, if the figures come out better than expected this could see GBP/USD rates fall towards 1.30 at the end of this week.
Positive economic data adds pressure to raise US interest rates
When the Federal Reserve has made statements recently the Chairman, Jerome Powell has been a little more cautious by adopting more of a wait and see approach rather than just simply focusing on economic data. However, if the economic data does continue to come out positively this will surely put pressure on the Federal Reserve to look at raising interest rates once again in the near future and this could strengthen the US Dollar vs the Pound.
The current expectation is for another two interest rates after four hikes last year but when they will happen is difficult to predict.
Brexit news: Will article 50 be extended?
The other potential for risk is what will happen next week with the UK’s ‘meaningful vote’ on Brexit due to take place on 12th March. This could be crucial in finding out whether the UK will be leaving the European Union on 29th March or could we see the possibility of an extension of Article 50.
Whatever happens with the vote the foreign exchange market is likely to see a lot of movement for GBP/USD exchange rates so make sure you’re well prepared.
If you would like to find out more or would like to save money when transferring US Dollars then contact me directly using the form below. I look forward to hearing from you.