This US Dollar report will examine the factors that could affect exchange rates in the short term in order to help you stay informed if you need to make a currency transfer. The table below shows the difference in USD you would have received when buying £200,000 at the high compared to the low for the past two weeks.
|Currency Pair||% Change||Difference on £200,000|
The Federal Reserve last night raised the interest rate by 25 base points to 1.25%. Furthermore they stuck to the forecast of a further rate hike later in the year.
The statement that preceded the announcement made clear that the main driver for the Fed was the significant improvement in the jobs market, with the 4.3% at the the best level for 16 years. The Fed however did not believe US inflation will rise above 2% for some time, which is their mandated level.
In some unexpected news the Federal Reserve announced a clear plan as to how they were going to move the $4.2tn of treasury bonds from their balance sheet. The bonds were initially bought in 2007-2009 to stop the country going bankrupt during the financial crisis through Quantitative Easing, however the Fed believes economic conditions are moving back to normal and they’re in a position to clear their balance sheet of the bonds.
The “normalisation” of the balance sheet is set to begin over the course of the end of 2017, with the plan to remove billions of dollars of bonds and mortgage securities a month once the process starts.
The Cable rate didn’t really respond much to the announcement of the interest rate hike as the market was confident it would happen. If you’re looking to sell US Dollars the current rate represents a great opportunity.
Yesterday morning in America a shooter opened fire on Republican Lawmakers during baseball practice. Whilst there was no fatalities other than the shooter, a very senior Republican Steve Scalise was shot. Congressman Scalise is the majority whip for the Republicans and considered 3rd in command in the party. Fortunately this attack wasn’t successful but sadly events like this can have a significant effect on currency markets.
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