Volatility with dollar exchange rates this week

Will the US dollar improve against the pound this week?

The pound has fallen against the US dollar since the start of the week after hitting a 4 week high to buy US dollars on Friday afternoon. The pound made gains across the board last week as it was rumoured that the cross-party Brexit talks were moving in the right direction, but since then the pound has started to suffer once again vs the US dollar.

US inflation and interest

Turning the focus back towards the US and the latest set of inflation data is due for release on Friday afternoon.

The US Federal Reserve are currently considering their next move when it comes to changing interest rates and if inflation remains high then this could put pressure on the central bank to hike rates again after 4 rate hikes during 2018.

Indeed, if inflation does come out higher than the expected levels of 2.1% then I think we could see GBP/USD exchange rates drop once again below the 1.30 level which it has been approaching once again this week. Therefore, if you’re in the process of looking to buy US dollars then it might be worth looking to get this organised prior to Friday’s data release.

US China trade war tensions

The US-China trade war is still ongoing and US President Donald Trump has once again suggested that he may look to increase tariffs by a further US$200bn on Friday after he suggested that the talks are going too slowly and that China is backtracking on some its previous commitments.

UK economic data this week

Also on Friday the UK will announce its latest GDP figures for the first quarter of 2018. Expectations are for growth of 1.4% so anything different is likely to cause volatility for GBP/USD exchange rates.

At the same time the UK will announce Industrial and Manufacturing Production data so expect a very busy start to Friday morning and owing to the uncertainty of Brexit if both data sets come out lower than expected we could see dollar strength against the pound at the end of the week.

If you would like to save money on exchange rates compared to using your own bank when buying or selling US dollars then contact me directly for a free quote and I look forward to hearing from you.