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Weekly roundup: the US dollar strengthened before falling again

currency-newsWeekly roundup: the US dollar strengthened before falling again
It was a quiet week for data last week, with the ISM services composite index for May being the only high-profile release on the data calendar. This fell further-than-expected from 57.5 to 56.9, while finalised durable goods orders figures for April showed a worse-than-estimated fall of -0.8% compared to predictions of -0.6%. Consumer credit figures were also disappointing, showing a fall from $19.5 billion to $8.1 billion, instead of to $15 billion.

The focus of last week was the testimonial to the US Senate intelligence committee of former FBI Director James Comey. Answering questions on his abrupt firing by President Donald Trump and the issue of alleged Republican collusion with Russia, Comey had the potential to cause significant problems for the current administration.

This could have destabilised the President and his team even further, distracting them from their economic goals of large-scale fiscal stimulus and tax reform. However, the main revelations of the event were those that had already been anticipated or known.

Nothing particularly damaging to the administration came to light and expectations that Comey’s testimonial may have been what finally drove the Senate to impeach Donald Trump were shown to have been rather fanciful.

This week sees that all-important Federal Open Market Committee (FOMC) meeting, in which markets are a staggering 95.8% certain that interest rates will be hiked to 1.25%. What will be particularly interesting is whether the tone of the accompanying statement suggests that policymakers are still looking at more hikes this year; recent weak labour market data may have knocked their confidence.

High-profile data this week includes May’s consumer price index and advance retail sales figures, as well as June’s preliminary University of Michigan consumer confidence survey results.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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