This morning on twitter the US President announced the “Fake News Awards” where he highlighted incorrect stories that have been posted in the last year. Trump, who branded the press as the “enemy of the American people” has constantly battled with news companies who report on his day to day actions, with the influence of Russia in the election campaign a key battle ground. There is an underlying feeling at the moment following Trump defending his mental health in the last few weeks, that the President could be starting to lose control. Once again there are accusations coming out from private meetings and the President spends most of his days defending himself.
In the last few weeks the US Dollar has fallen back to 18-month lows against Sterling with the rate rising above 1.38 looking like there could be a movement above 1.39 and then on to 1.40. Despite there being 3 interest rate hikes in the last year and optimism there would be several more this year, the markets are not feeling the same optimism. The US Economy has continued to grow of late, with the so-called boom expected to continue. There is one concern however that stocks are growing based on a change in tax laws which will provide US businesses with increased revenue. Therefore, some may argue that the boost of late is not based on anything tangible and merely a theory of further profit returns for investors.
Over the next few weeks I believe that GBP/USD will continue to rise and 1.40 could be achieved before the end of January. Even with major uncertainty surrounding Sterling there could still be positive gains as investors move their money away from the uncertainty with Trump. It has always been Trump’s intention to weaken the US Dollar to make exports more attractive, however should the US stock market start to dwindle, the money could well be ploughed back into the safe currency.