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Currency Market News

Our blog is below, to help you understand what's moving currency rates and affecting the cost of your international payments. For some friendly guidance on your own transactions, either for your business or yourself, simply fill in the form above and an FCA-regulated currency broker will be in touch to assist you, without any cost or obligation.

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Best US Dollar Exchange Rates
28 October 2014

As can be seen from the below graph, we are now at approximately the same point, for GBP-USD, that we were exactly two years ago, prior to the economical difficulties suffered across “the pond” – no better or worse at this point – although transferring your Pounds to US Dollars may not be as good for too much longer!

The main theme that was observed in the United States at the end of 2012 and its repercussions going into 2013 and 2014 was the “Fiscal Cliff”. It was this that greatly dictated the US Dollar’s strength/weakness against other major currencies worldwide, as well as the currencies closely pegged to the Greenback.

Towards the end of December 2012, tax cuts previously put in place by President Bush Jr. and extended by the 2011 Budget Control Act, were due to expire on 31st December of that year. The BCA was passed, largely to try to counteract the dispute surrounding the US debt ceiling and the failure of congress to pass a federal budget. The outcome was a reigning in of spending and an increase of the taxation - the long term aim being to stabilise the US economy by decreasing debt. The medium-term impact over the next 18 months was one of significant shifting of the globe’s largest economy.

The initial strengthening of the Dollar was fairly dramatic – One Great British Pound would get you $1.4919 as opposed to $1.6276 only three months earlier. (see below graph)

It was not to last however, as over the sixteen-month period between mid-March 2013 and, oddly, the 4th of July 2014 (American Independence Day) what you would you could get for a Pound increased steadily from a low of $1.4877 to $1.7157 – a phenomenal climb of getting on for a “Quarter”

A direct result of the budget deficit, public debt and the consequential “Fiscal Cliff” and associated budget cuts was unemployment, itself a key factor in USD weakness. Planned austerity measures in the US to cut the deficit had implications of sending the US into recession, which hit the USD even harder.

Other factors that caused the “buck” to weaken from early 2013 until Summer 2014 are:

  • Ongoing Govt/tax-payer bail-out of General Motors – the largest car manufacturer in the US and historically one of the largest in the world

  • Federal Government shutdown in October 2013

  • Detroit’s bankruptcy in December 2013

  • US lawsuits against large banks

  • Bond-buying taper

The United States has entered a period of definite improvement in the last couple of months, with employment and manufacturing showing particular improvement. Stay in close contact with your currency broker, (if you don’t have one, fill in your details at the top of the page and we will put you in touch) as the rate for the USD is on the way down, as the US is going through a period of economic growth – if you need to transfer money to the USA perhaps lock in that rate while it is still at a comparably good level (12 cents better than 15 months ago).

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