US shutdown – Optimism in the air
Yesterday there were rumours building that there was negation in the air to try and avoid the US Government defaulting on their debts. This added level of speculation created some early movement back into the Dollar and in turn made it more expensive to buy. We also had President Obama put forward Janet Yellon as the next head of the Federal Reserve. She is seen as someone that will continue the current FED head Ben Bernanke’s policy of throwing money at the US economy if there is any sign of a slowdown, while continuing to focus on job creation. This was welcomed by the markets and we saw price of the greenback increase.
If you are trading the dollar today watch out for the potential release of US Retail and Productivity figures. These are expected to show an improvement so could in turn make the dollar more expensive to buy still. The reason why I say potentially is that with the US “Shutdown” is in full force and the government body that release these figures are currently not getting paid so they could potentially not publish these releases as scheduled. Either way please feel free to contact your broker here for live updates and Currency Forecasts as they change.
US Shutdown on global currencies
With the US government continuing to be at log heads on how to avoid a default, traders have been looking for safe havens to put their money in rather than holding USD. This has benefited a number of currencies including the CHF, GBP, EUR, AUD, ZAR and NZD which all saw their demand increase 11 days ago when the US dilemma started. As speculation builds that there may be a short term extension in the debt ceiling money has started to flow back and has weakened these currencies, it is a pattern that I expect to see continue until an actual extension in the US is agreed.
For example the AUD has been one of the largest currencies impacted; this week the GBPAUD moved by over 1.5% as a result in real figures as an example if you were buying £200,000 with AUD the difference in cost between buying well and poorly equates to an additional cost of AUD $5,200. This again highlights how much of an impact the US can have on a host of currencies.
If you are looking at buying or selling a currency and are looking for a better rate of exchange than the banks along with a personal service to give you the information needed to decide when to do your exchange then please do contact me at [email protected]