US GDP data out today: What could happen to the GBP/USD rate?
The pound to US dollar exchange rate has seen movement recently due to a mixed array of economic data out of the US recently with today marking the release of GDP Q2. This is set to cause movement for the USD which may provide some worthwhile opportunities for clients looking to transfer dollars should the data suggest healthy growth that it has been experiencing for an unprecedented duration.
However, whilst the previous release provided comfortable figures of 3.2%, there has been suggestions that there are some underlying problems that can have some significant implications for the strength of the dollar.
Deloitte Insights has predicted that in 2020 it is likely that the economic growth the US has been bathing in will end due to a variety of factors including the tariffs imposed on the Chinese goods which act as taxes and will slow US growth and also the current budget policy which may create a spending cliff later this year.
As a result, they expect that there is a 25% chance the US may be headed for a recession s next year.
Despite this, whilst there may be some economic upset for USD rates, the current strength of the ‘safe haven’ currency is good and clients who have USD may wish to discuss their options to take advantage of the rates.
Global interest rates have peaked
According to reports from Bloomberg, the US Federal Reserve and other leading central banks have announced that the global interest rates have been reached and it is expected that they will begin falling.
This includes the US too and may see the FED chairman Jerome Powell lower interest rates for the first time in 10 years. The current figure of 2.5 has been steadily rising over the past 4 years but this new development may see some large weakness for the dollar. This could cause the US dollar value to fall, improving pound to US dollar exchange rates.
If you would like to know more about the recent US economic data and its affect on the US dollar or have an upcoming currency transfer, feel free to contact me directly using the form below.