Neil Camenker
Neil Camenker is an entrepreneur and Forex trader who specializes in US dollar-British sterling pound trading. The CEO of Paypoint USA, Neil started up the firm with the goal of establishing a merchant fund by which small and medium businesses could obtain capital for the growth and development of their businesses.
It is the closing days of October, and the US dollar has just managed to edge past the British pound, which was sold off in volumes that haven't been seen in decades. At the same time, the dollar maintained its secondary position against the Euro.
Much of the trend is attributable to the widespread sale of the pound, which hit its lowest level in many years. Also an undeniable factor is the recent spate of speculations of impending interest rate increases by the US Federal Reserve, which is expected to take place in December.
Events leading up to the last quarter of 2016 provide several indicators of the current performance of the dollar. In mid-October, the ICE United States dollar index–traditionally a key indicator of the value of the dollar against the six major world currencies–hit a nine-month peak. From the low point at the beginning of May 2016, the ICE has made a remarkable improvement in the succeeding months, currently registering a respectable 7.4%.
The U.S. Dollar Index DXY also reached its highest level since February. Holding steady at 98.72 in mid-October, it peaked at 99.12 toward the close of the month. However, it eased back to lower levels after an announcement by European Central Bank President Mario Draghi expressing the bank's hesitation to maintain negative levels for long.
As expected, this announcement had the effect of raising the value of the Euro. Previously dipping to $1.0851–its lowest level in eight months–the Euro was shared at +0.8167% against the dollar, inching up to $1.0885 from the earlier rate of $1.0875.
The slight improvement of the Euro was expected by many in the wake of Draghi's statement. Described by BNY Mellon global markets strategist Marvin Loh as "kind of neutral", Draghi's comment was seen to have placed the Euro in higher standing, regardless of the effect that the dollar has on trading.
The British pound for its part fell to $1.2182, compared to the earlier rate of $1.2224. Traded at +0.1891% against the dollar, the pound is only just slightly higher than its $1.2083 low. Even with this improved showing, the pound continues to be traded at 1980s levels. This overall poor performance is largely attributed to "Brexit", the country's controversial and much-publicized decision to leave the European Union, which has made many investors skittish.
As analysts anticipate several more months of uncertainty with regard to the pound, factors such as UK Chancellor of the Exchequer Philip Hammond's parliamentary statement to the effect that the purchase of more bonds by the Bank of England would go uncontested further contributed to the decline.