The central bank said weakening European and Chinese economies are dampening U.S. growth. It estimated that the American economy would grow by 2.1 percent this year, down from an earlier forecast of 2.3 percent and last year's 2.9 percent.

Currency Pair% Change in 1 monthDifference on £200,000
GBPUSD2.91%$7,520

The FED’s rate projections from here will have large implications because of a range of issues, including how fast the economy can grow, how much inflation it generates in the process and whether the Federal Reserve will continue to feel comfortable keeping interest rate hikes on hold. As the FED have kept interest rates on hold earlier this month and indicated that there would be no further rate hikes this year after indicating in December that two could take place.

Federal Reserve Chairman Jerome Powell said that despite recent increases in the U.S. workforce participation, it is still struggling behind other well-off countries. The U.S. labour force participation rate has increased from a strong economy that is retaining more workers, keeping the US dollar strong.

The dollar looks set for more volatility as tensions once again rise between the US and China after Donald Trump has vowed to reduce economic ties. US Customs and Border officials have instructions to block imports of cotton and tomato products from China after allegations of forced labour.

Along with US President Donald Trump sending US officials to china to continue the trade talks, negotiators said they had made some progress but noted that “a few very big hurdles” remained. Donald Trump has fought back with regards to Robert Muller’s investigation as the report concluded, there was no conspiring with Russia in the 2016 election campaign. Giving him some ammunition to validates his presidency so far. However, this would not be considered a market mover but it does keep the US focused on trying to deliver Trump economic plan.

Housing data stands out on Tuesday with expected rises in Building Permits and Housing Starts. The House Price Indexes are also of interest if they change from the predicted 0.3%. The Conference Board's Consumer Confidence gauge is on Tuesday.

Cable set for rocky week

UK economy is doing well despite being stifled by Brexit news dominating the headlines. Unemployment in the UK is at its lowest since 1971 at 3.9%.

However, it is still the main cause for concern for the cable. Brexit news has triggered significant volatility in Sterling. The interbank GBP/USD rate ended the week at around 1.3204. The developments over this week could trigger high volatility. Please feel free to get in touch with your account manager to discuss relevant market movement.

News

Read more articles

 

Download our monthly currency forecast

Download here

 

Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.