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You are here: Home / US Dollar / US Dollar rates – Hurricane Harvey, North Korea and Trump

US Dollar rates – Hurricane Harvey, North Korea and Trump

August 31, 2017 by Lewis Edmonds

US Dollar rates – Hurricane Harvey, North Korea and Trump

The economy seems to be performing well in the US, with unemployment down and Gross Domestic Product (GDP) data showing healthy gains. However, today the latest inflation data does not seem to reflect the current growth in the US and as such creates a problem for the Federal Reserve and could influence the decision on when to raise interest rates. At present, the likelihood of a rate hike before the end of the year in the US is between 30 – 40 percent.

Currently the US Dollar seems to be holding steady, despite a large number of factors that could easily cause Dollar weakness at any given moment. President Trump has recently vowed to shut down the Government if Congress failed to vote on lifting the debt ceiling and to finance a wall with Mexico. This would most likely cause the US to fall out of favor with investors. Currently, Hurricane Harvey is likely to take the spotlight as Congress and the Government address the issues caused by the natural disaster.

President Trump also has the capability of moving the Dollar through his tweets, which yesterday caused investor sentiment to shake as he tweeted ‘it’s time to stop talking with N.Korea!’

So, whilst the US data of late has been extremely positive (retail sales, consumer confidence and GDP all beating expectations), external factors are likely to heavily weigh on the Dollar in the short term and for this reason I can’t see the Dollar gaining much more value against the Pound and the Euro.

Tomorrow’s payroll data for the US is likely to paint an even better picture of the US economy, so keep your eyes peeled as to whether this will improve the chances of a rate hike before the end of the year.

Filed Under: US Dollar Tagged With: Donald Trump, Hurricane Harvey, US Dollar weakness, US economy, US interest rate, USDEUR, USDGBP

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 Lewis Edmonds

When he is not offering insights into the what is happening on the currency markets Lewis manages key relationships for an authorised payment institution in the UK.

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