Sterling continues to climb against the US Dollar but what will happen today after the BoE's Interest Rate decision?
GBPUSD rates have recovered since hitting their lowest level to buy US Dollars during last week. The certainty that has returned politically has helped to settle Sterling and this caused Sterling to recover by over 2% since the start of the week vs the US Dollar. With things a little more settled politically in the UK part of the recent Dollar weakness can be attributed by the reduction of their safe haven status.
Data has been rather mixed for the US recently and with a total of 4 interest rate hikes expected at the start of the year, then down to 2 I would be surprised to see any change by the Federal Reserve this year. Unemployment figures have been positive but new jobs created have come out much worse than expected on the last 2 occasions.
With the election campaign gearing up in the US between Donald Trump & Hillary Clinton then I think the Fed will keep rates on hold as politically the US will be rather uncertain in the upcoming months and any change in policy may cause too much volatility.
Later today the US publishes Initial Jobless Claims at 1230 with expectations for 2.12m and anything different could cause volatility for GBPUSD rates. US Retail Sales as well as the Consumer Price Index are both due out on Friday afternoon. CPI measures inflation and depending on the outcome this could influence the decision made by the Federal Reserve when they next meet on 27th July.
If you’re looking to selling Dollars it may be worth taking advantage of these historically low levels as with the US election only a few months away the US Dollar could face a period of uncertainty.
Those looking to sell US Dollars for Sterling can still enjoy the highs not seen for 30 years, these rates may not be around for long. Call our trading floor on 01494 725 353 for a quote.
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