Will the US Dollar get stronger in the near future?

Will the Dollar improve further against Sterling and the Euro?

The US Dollar has been gaining vs both the Pound and the Euro since the start of the month.

Oil prices have risen dramatically recently and as oil is priced in US Dollars this can often lead to the currency strengthening.

The tensions are escalating between Israel and Gaza which are likely to increase in the short term.

This will cause further instability in the Middle East which could impact upon oil supplies.

Geopolitical uncertainty will also often lead to the Dollar strengthening at the moment.

This was evident at the start of the pandemic with the US Dollar hitting its highest levels in history.

The USDEUR and USDGBP traded at their highest levels at the point when the UK was heading into lockdown.

Inflation falling globally

In the meantime, although inflation is falling in the world’s leading economy it it still higher than the Federal Reserve’s target.

Indeed, although inflation is now at a 2 year low this may lead to the Fed keeping the door open to perhaps one more interest rate hike.

Inflation has been a key driver in a central bank’s policy over the last two years. With the US having seen a fall could we start to follow this pattern both here and in the Eurozone?

The Bank of England has raised interest rates fourteen times in a row until last month. Inflation has started to drop in the UK hence the decision to keep interest rates on hold.

Could the Bank of England follow the same pattern as the Fed?

If you would like a free quote compared to using your own bank when buying currency then contact me directly.

I have worked for one of the UK’s leading currency brokers for over 20 years and I’m confident of making the process simple and straightforward whilst offering competitive exchange rates.

Email me Tom Holian tom.holian@lumonpay.com 

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