The US dollar has made substantial gains against the majority of major currencies due to it’s status as a safe haven currency.
USD ‘safe haven’ status affects pound to US dollar rate
The Trump administration is still engaged in a trade war with China. The impact of this trade war should not be underestimated with two of the worlds super powers slugging it out the global economy is under threat.
The US dollar has made substantial gains against the majority of major currencies due to it’s status as a safe haven currency. The impact of this trade war should not be underestimated with two of the worlds super powers slugging it out the global economy is under threat.
Will a rise in tariffs weaken pound to US dollar rates?
Trump has stated he will up tariffs at the start of June. He intends to double current tariffs on $250bln of goods. The Chinese have so far responded with a tariff rise on $60bln worth of goods.
Due to the global economic uncertainty created by Trump’s trade wars investors are seeking safe haven investments and the US dollar is proving to be the destination of choice.
There are however growing concerns amongst analysts that it’s only a matter of time before the global trade tensions that have been largely fuelled by the US may begin to have an impact on the economy and in turn the greenback, as the prolonged uncertainty ultimately benefits no one in the equation.
The retaliatory tariff changes between the US and China is beginning to negatively impact consumers and manufacturers as the price of imports is rising.
Key economic data this week to influence pound to US dollar rate
There are several US economic data releases of consequence this week. There are also statements from key members of the Federal Reserve which could influence US dollar value.
Jobless data is released on Thursday and is expected to show an improvement from the previous reading. Markit industry data is displaying signs of expansion. Despite this, the Nondefense Capital Goods Orders scheduled for Friday which is a key measure of manufacturing performance, is expected to see a fall of 0.9% from the previous release which could see USD weaken and could provide a window of opportunity for US dollar buyers.
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