The US presidential elections are looming closer but what is happening with the FEDs Interest rate hikes promised in December?
Buying levels for USD on Friday were incredibly volatile with a net difference between the high and the low of the day of over two cents.
Initially the Pound seemed to still be enjoying the recent stability afforded by a quick turnaround in political fortunes allowing a creeping effect up to 1.35, before retreating down to the 1.33 following revelations of incredibly strong consumer activity in the US.
Dollar buyers should be thankful that rates did not fall further. Sales growth in June was six times higher than expected, and for once this data was not exaggerated by the auto-industry, as excluding cars these figures were seven times higher. This balanced growth in consumer activity was a strong compliment to the staggering employment figures recorded for the US earlier in the month, and was why GBP/USD fell back 2 cents at midday when this figures came to light.
Yet the effect was tempered. Low inflation data posted on the same day makes it even less likely that we’ll be seeing any of the planned four interest rate hikes this year for the US economy.
The US election is just around the corner, and just as the recent Australian election heralded no change in financial policy, the uncertainty in the upcoming election in the US should warrant the same caution. With Donald Trump unofficially announcing his VP running mate as Governor Mike Pence of Indiana, campaigning is certainly beginning to wind up.
With the British economy stabilising, we may see buying USD rates continue to improve as the main economic data releases for the US have been exhausted for the month. USD sellers may be wise to take advantage of the current opportunities available, so I recommend speaking to your account manager to discuss your options as well as a live quote.
Call our trading floor today on 01494 725 353 to discuss your currency requirement.
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