It’s not easy for foreign exchange investors to choose a currency to invest. They can not think pattern – there is the only one correct solution for a specific period. They can earn maximum after a thorough study of the market and analysis of all economic indicators. Therefore we prepared dynamics of three world currencies – the US dollar, the euro and the pound sterling.
The US dollar is not the most expensive currency in the world. However, it has become the leader by the number of international transactions. The euro and the pound are only slightly behind the US dollar. The euro is the national currency in 19 countries. And the pound is still in use in the former British colonies. That’s why we compared the US dollar with the euro and the pound sterling.
The current ratio of the euro to the dollar was 1.1717 last week. At Forex trading, this rate decreased even below to 1.1700.
The ratio USD/EUR was not affected by the recent natural disasters in the US – hurricanes in Texas and Florida in August-September 2017. This led to an increase in the number of new jobs to 33 thousand. Nevertheless, the unemployment rate in the US remained low – 4.2% (the lowest since 2001!), And this has strengthened the average wage level. And this means that the dollar could stay at the same level.
In general, the dollar is now expected to appreciate due to the growth of the US economy after the tax reform of Donald Trump. At the presentation of the improvement he promised to cut taxes.
The growth and volatility of the euro have recently been troubled by investors who have chosen the dollar for their investments. Nevertheless, the global financial markets predict a narrowing of the gap between the euro and the dollar to the rate of 1.1610.
US Dollar to Pound Sterling
Analyzing the ratio of the dollar to the pound, it is worth noting that it has dropped significantly to 1.3050.
The rate of the pound was significantly affected by the decline in the index of business activity in the construction and manufacturing sectors in September.
Another problem that contributed to the spread of the pound sterling last week was the problems of the current government. The reason was the UK’s uncertain position regarding Brexit at a meeting with the European Union. Until now, negotiations are underway regarding the payment of compensation to the European Union. In general, this led to an increase in the value of the pound.
Financial analysts believe that the depreciation of the pound sterling rate is a temporary phenomenon, and the currency will restore its positions soon. Experts also note that the Bank of England will apply a single increase in interest rates, but Britain will have no justification for inflation in 2018.
As for the forecast for the week, there must be planned reduction of the pound to the dollar level to 1.3000, and after that – only growth.
We hope that the currency market forecasts will help you to make a profitable decision. Be exclusevely successful in foreign exchange investment!