The pound rocketed on Wednesday, striking a new six-week high against the US dollar amidst renewed hopes for a UK-EU Brexit trade deal.
The US dollar found renewed strength at the start of the week as anxiety over Covid-19 spiked once again in response to signs of an impending second wave of infections.
Widespread risk-off trade sent investors pouring back into the safe-haven USD as the health of the global economy appears at risk, despite signs of recovery through the summer.
Lower-than-expected initial and continuing jobless claims figures also offered a boost to USD exchange rates, suggesting that the labour market is moving in the correct direction.
However, as the Fed remains prepared to leave interest rates on hold for the foreseeable future, US dollar gains could be capped this week.
USD investors will be looking to Jerome Powell’s testimony before Congress for any hints to help determine the direction of the US dollar this week.
Increasing political tensions in the run-up to the presidential election also look set to weigh on US dollar exchange rates, with the divide among politicians stifling the possibility of agreeing a new fiscal stimulus.
With growth in durable goods orders forecast to have softened in August, this could put fresh pressure on the US dollar as worries over the resilience of the manufacturing sector grow.
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)