In their August 2018 Currency Outlook report, Tempus, an exchange rate and global payments company, provides a detailed report including the following topics and sections:

In Brief

• The USD lost .5% of its value, ending its appreciation run that had been ongoing for three months
• Tensions over proposed tariffs added pressure to the strength of the USD, but it stayed afloat because of domestic strength/
• The British Pound remained under pressure with changes to the cabinet in the UK and slow economic growth
• The Japanese Yen was down by 1% as stocks thrived and the Bank of Japan made no adjustments
• The Mexican Peso preformed well after election hysteria subsided
• The Canadian Dollar strengthened 1% after the Bank of Canada increased rates

In Focus
The Mexican Peso made up for lost ground in June.

The View – The USD’s strength in the first half of 2018 against other currencies will be its safeguard

• The USD was unable to continue with its three month increases in July
• Although the fears over a trade war in the face of proposed tariffs have not disappeared, the USD has been rewarded due to the consistency of the U.S. economy
• USD GDP grew at a pace of 4.1% for Q2
• U.S. retail sales continued advancing and factory orders increased, therefore expectations of contraction were avoided
• Global world economies seem stagnant and disturbed by the potential changes to trade deals already in place
• Brexit remains uncertain as the UK plans to reach an official separation deal by October 18 and achievement of a trade deal that deadline March 2019
• Pressure over the U.S. threat of tariffs of 25% lead to a meeting between EU Commission President and President Trump at the White House
• The British Pound reverts to levels last seen in 2017 due to negative effects of potential departure from a trade union, housing prices fell and retail sales receded
• Changes in Prime Minister May’s administration including the resignation of foreign secretary and Brexit secretary further worsened the strength of the British Pound

IBC Members can download the complete Currency Outlook from the members-only section of the IBC website under the Special Reports section. IBC membership is free for all regular IHA members – to learn more and to join, visit the IBC membership information page.