The Federal Reserve is the central bank for the United States and their economic policy on interest rates has a big influence on the price of US Dollars.
The table below shows the change for the GBP/USD exchange rate over the last week:
|Currency Pair||% Change||Difference on £200,000|
As the US economy continues to grow there is ongoing debate about the pace of future hike and what longer term policy will be to best support the US economy. With the US economy performing so well and interest rates predicted to rise twice, maybe 3 more times this year, the US dollar could still rise further.
Jobless Claims yesterday showed a slightly higher than expected figures with 222k rather than 215k expected. US Unemployment is closely watched and this did help to see the US dollar lose 0.3% against the pound, presenting a good opportunity for well-prepared US dollar buyers. At 14.15 there are two speakers from the Federal Reserve bank, Member Kaplan and Brainard, their comments could possibly weaken the dollar. Kaplan currently supports two more hikes this year whilst Brainard is also more dovish, or soft and so this could provide some short-term opportunities for US dollar buyers with pounds today.
Overall, it looks like the pound will continue struggling against a much stronger US dollar as conditions favour the greenback. Ultimately the big changes in interest rates between the UK and the US will continue to drive the pair and if the Fed are looking to raise whilst the UK hold off, there could be further losses for the pound and gains for the US dollar.
Higher interest rates and strong future economic projections have all seen the US dollar performing very well in recent weeks, if you have US dollars to buy with pounds preparing for rates to fall lower seems wise.
Next week see some very important UK releases on Inflation and GDP which could easily trigger some big swings on GBPUSD exchange rates. If you have any transfers in the coming weeks and months buying or selling US dollars or any currency connected to it, please get in touch to discuss the forecasts.
US dollar connected currencies we can support include AED, QAR, OAR, SAR, HKD, please get in touch to discuss further.
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