The US dollar has fallen to its lowest level against the pound since June of 2018. Sterling has found resistance at this level (1.33-1.34) on two occasions since June of last year so it will be interesting to see whether it can break above this resistance level and attempt to trade in the later 1.30’s, which haven’t been available since the first half of 2018.
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The recent boost to cable is mostly down to the strengthening pound for the reasons covered in the sterling section, but US dollar weakness is also a factor in the price changes and this is reflected in the US dollar index hitting a three-week low.
US dollar exchange rates have softened recently after the Fed Reserve Chairman, Jerome Powell underlined his recent comments regarding US monetary policy. He suggested that it’s unlikely that there will be any interest rate hikes again soon, and that the Fed will remain ‘patient’ when deciding on further hikes.
Initially the markets had factored in two interest rate hikes this year, after the four hikes that took place in 2018.
Market commentators are expecting no changes in the short term future owing to the weak Retail Sales figures released for December, along with weak Industrial Production figures to add to the multiple political negotiation’s the US is currently embroiled in. US President Trump is currently in Vietnam as he continues to attempt to disarm North Korea of its Nuclear weapons amicably. His meetings with North Korean leader, Kim Jong-un have so far failed to result in an agreement.
If you have a currency requirement involving the US dollar, not only is it worth making us aware at the earliest convenience so we can monitor the markets for you, but it’s also worth being aware of the next key releases. At 1.30pm today we will be provided with an overview of the US Jobs market, and at the same time tomorrow Retail Sales along with inflation levels will be released also. If you wish to plan around these events do feel free to get in touch.
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