If your New Year Resolution was to hear less of the word ‘Trump’, how is that going for you? Unfortunately, for anyone with a large international transaction coming up, the actions of the US president continue to affect the pound, euro or US dollar in your pocket.
The first way is in the eponymous ‘Donroe Doctrine’ that says the US can do what it likes in its neighbourhood. So far it has helped the dollar but as he eyes up new targets it could go either way.
For Brits it hasn’t been all bad. After stock markets strengthened to all-time highs (powered by oil and defence stocks) and dragged sterling along with them, the pound hit a four-month high against both EUR and USD.
The second Trump effect is in his pursuit of lower interest rates, over which he currently, and for excellent reasons, has little control over. In order to force US Federal Reserve chair Jerome Powell to cut rates faster Trump has brought criminal charges related to building work at the Fed’s offices. This morning this has hit the US dollar, which is down some 0.35% against the pound.
So, if you wish to avoid Trump or any other political or economic news hitting your purchasing power overseas or, more worryingly, hitting your finances mid-purchase, talk to your account manager on 020 8003 4915 about locking in your rate, with sterling close to that four-month high.
Coming up this week, economics is back in the frame, with the UK’s gross domestic product (GDP) result on Thursday. The government is desperate to see some economic growth, and this week will continue to plan negotiations over aligning itself closer with some elements of EU law.
