Fed Chairlady Janet Yellen’s comments in her recent testimony have suggested that we may see another interest rate hike for the U.S as early as March.
She mentioned that she feels that the U.S economy will continue to expand at a moderate pace and that there would be room for interest rates to rise sooner rather than later. This has given the US Dollar a little strength back, following a fairly average run of form in recent weeks. As those of you who have had an interest in the market since last year will remember, the U.S had been predicted to raise rates four times last year with not one hike coming to fruition, however I feel that this year is different.
With Trump and his business-like approach to the U.S economy and signs that economic data in the states has been picking up for some time I feel that we will see a couple of rate hikes in 2017 and the Dollar will remain strong this year.
There is the potential to see GBP/USD drop below 1.20 again should a rate hike appear to be imminent, and with the Fed minutes on Wednesday evening having the potential to suggest this, we may see an opportunity for USD sellers shortly following their release.
For those that have US Dollars to sell, or even a currency pegged to the USD (such as AED or QAR) you should still remain a little cautious as to what may happen in the coming months.
Tensions are still fairly high between the U.S and China, North Korea, Russia Mexico and a number of other key countries around the world and should any of these issues escalate, then not only should we all worry but the Dollar could take a hit and fairly rapidly.
I would be surprised to see anything escalate to the point of all-out World war 3, but sanctions, trade deals being stopped and numerous other issues may crop up that could give US Dollar exchange rates a bit of a headache.
It is a funny world we live in where a tweet from a guy that only a few years ago was on the apprentice can cause billions of Dollars to move in and out of companies or funds within seconds… This is what we are up against.
If you are looking to sell US Dollars or any currency pegged to the US Dollar, then get in touch with our trading floor today on 01494 725353 and discuss the matter with one of our experienced traders. Most people in this position are hedging their risk and bringing some of their money back whilst rates are almost the best they have been in 30 years and personally I feel that this is a great approach too.
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