This report will examine the factors that could affect exchange rates in the coming months to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low yesterday.

Currency Pair% ChangeDifference on £200,000
GBP/USD0.67%$1800

Federal Reserve’s Bostic states three hikes in 2018 could be too much

us dollar strengthAtlanta Federal Reserve President, Raphael Bostic spoke on Monday. He suggested there may only be the need for two rate hikes during 2018 due to the loss of public confidence in the Central Bank’s ability to hit it’s inflation target of 2%.

Bostic’s view is slightly negative compared to the more common expectations of three hikes from his colleagues. Bostic is the second member of the Fed in recent days to suggest there could only be two US rate hikes this year.

Chris Rupkey, chief financial economist for Mitsubushi UFJ Financial Group commented “The chorus seems to be growing more vocal about the need to raise rates more slowly… No inflation , not many more rate hikes. Bet on it.”

Despite low unemployment and a growth target of 2.5% potentially being hit, Bostic has stated that poor wage growth and struggling inflation are two reasons to be guarded.

These are interesting views from credible sources, if there are only two rate hikes that materialise this year this could cause US Dollar weakness later down the road.

US Retail Sales, CPI and Fed President speech make for a busy day of Releases

Today we will see the release of US retail sales figures, it measures the receipts from retail stores. This measure of consumer spending can cause movement in US Dollar value.

Following Retail Sales we have Consumer Price Index (CPI) data. CPI is a measure of inflation and of late it has remained stubbornly low. If today’s figure bucks the trend we could see Dollar strength.

Finally we have Federal Reserve Bank of Boston President, Eric Rosengren’s speech. It will be interesting to hear his stance on 2018’s rate hikes and if he gives anything away expect the markets to move.

For more information on how future data releases could affect your US Dollar requirement, call our trading floor on 01494 725 353 or email me here.