Last night FED Chairman Ben Bernanke stated that the American Central Bank could start to reduce the amount of money they are pumping into the economy through its Quantitative Easing (QE) programme. At the same time Bernanke announced that the FED were keeping interest rates at the record low of 0.25% which was as per the markets expectations. QE is effectively when a bank introduces more money into its economy, in the case of the US through an asset purchase programme. This increase in the supply of currency can mean that supply outstrips demand resulting in the currency weakening so the announcement last night from the FED has provided some support for the Dollar pushing GBP USD exchange rates down offering some excellent opportunities for clients looking to sell Dollars.

The movement on the Dollar may be short lived though as the FED confirmed that they are only likely to reduce QE if their growth forecasts are correct. Even if the predictions are spot on and the US economy continues to improve it is likely the bank will slowly scale down its asset purchasing programme ending it completely towards this time next year. This means that QE is a long way from over in America but there is some hope.

For clients looking to send money abroad, even if they are not sending Dollars, this could be excellent news because with the US the largest economy in the world this positive news could have a wide reaching positive impact and we may see the likes of the Bank of England following suit and an increase in demand for European bond auctions. All of this could mean some much needed positive movements in the currency markets.

While the outlook continues to remain clear for the currency markets it is vital to stay in close contact with your currency broker here at Foreign Currency Direct plc. Our traders are friendly and experienced and will be more than happy to discuss your currency requirements and all the options available to you. To speak to one of our expert traders call us today on 0800 328 5884 or 0044 1494 725353, alternatively email us on trh@currencies.co.uk