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You are here: Home / US Dollar / US Dollar in good form ahead of Trump’s inauguration

US Dollar in good form ahead of Trump’s inauguration

January 19, 2017 by Rob Lloyd

US Dollar in good form ahead of Trump’s inauguration

The US Dollar continues to post gains against a basket of currencies, including the Australian Dollar and Euro, hours before Donald Trump becomes the 45th President of the United States. The hawkish stance from the FED back in December which saw the only hike of the year, is set to continue with the Chairlady Yellen expecting a ‘few rate hikes this year’.

Trumponomics is another factor driving US Dollar exchange rates, markets remain positive towards the President-elect’s plans which include tax cuts and a boost to infrastructure. Markets are bullish about the US Dollar and very little appears to be slowing the Trump train.

But there is one currency that the Dollar has lost ground against, the Pound’s rally following Theresa May’s Brexit speech continues into day 2, after falling as low as 1.19 at the beginning of the trading week. It would seem that market certainty following her Brexit plans is having a short term boost on the Pound, but the real challenges that lay ahead push sentiment around GBP/USD into negative territory.

Preparing for a hard Brexit

The Pound may face new challenges as we approach the deadline for Article 50, if the remaining EU members decide to play hard ball with the UK, Theresa May has insisted that ‘no deal is better than a bad deal’, signalling a cliff edge Brexit and most likely, a significant fall in the value of GBP.

Markets fear this scenario playing out which in my view, will signal another Sterling sell off in the weeks ahead. With a strengthening Dollar and potential for further US interest rate hikes, the Pound’s position against the greenback could fall further into negative territory.

Filed Under: US Dollar

The information on this website is provided for information purposes only. It does not constitute advice to any person on any matter. Every reasonable effort is made to ensure that the information is accurate and complete but we assume no responsibility for and offer no warranty with regard to the same.

About Rob Lloyd

Robert brings with him a wealth of knowledge on what is impacting exchange rates, especially around the subject of the EU Referendum and the implications for Sterling and Euro exchange rates.

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