Interest rates, tariffs and jobs data to impact Pound to Dollar rates

Drone attack on Saudi Aramco and how it may impact Dollar exchange rates

The pound to US dollar rate could be set for a rather volatile period soon.

When will the US cut interest rates?

US Fed Chair Jerome Powell has suggested that the Fed could be considering cutting interest rates in the near future.
With the Trade Wars still rumbling on this is causing a headache for the Federal Reserve. Powell also went on to suggest the Fed would ‘act as appropriate.’ In my mind this suggests that the Fed are planning a shift in monetary policy. Previously, Bullard also suggested an interest rate cut could be coming soon.

This will be seen as welcome news to US President Donald Trump who has previously claimed that interest rates are too high. If the Fed cuts rates potentially twice this year this could provide a boost to the US economy. Cutting interest rates would typically result in weakness of the currency involved. However, if the economy is boosted this could cause the opposite effect.

Tariffs on Mexico and China, how has the pound to US dollar rate been affected?

Recently Donald Trump has also imposed tariffs of 5% on Mexican goods coming in to the US. This is set to rise up to 25% by October in an attempt to curb illegal immigration in to the US.

The US continue to also discuss terms between themselves and China. These talks have also resulted in an increase in tariffs between the two nations. The overall effect on the US dollar with the trade wars has been positive. This is because the US dollar is often used as a safe haven currency in times of geopolitical uncertainty.

If you’re in the process of buying US dollars it may be worth getting things organised in the near future to take advantage of these current levels.

US economic data to cause volatility in pound to US dollar rates

We end this week with the news from the jobs market in the US. Tomorrow afternoon the US will announce the latest unemployment rate with the expectation for 3.6%. At the same time Non-Farm Payroll data is due out.
Both data releases will often cause big movements on GBP/USD exchange rates as they are very difficult to predict so make sure you’re well prepared.

If you would like a free quote when buying or selling US dollars, then contact me directly for a free quote and I look forward to hearing from you.