After raising interest rates a total of 4 times during 2018 is the Federal Reserve looking to slow down its pace of rate hikes during 2019?

The Federal Open Market Committee has confirmed that they will be keeping interest rates on hold at the moment but have suggested that there may be more coming which was in line with expectation.  

Currency Pair% Change in 1 monthDifference on £200,000
GBPUSD4.1%$11,600
FOMC Minutes next week could hint to FED’s monetary policy plans

Previously, Fed Chair Jerome Powell has caused markets to move with his comments, so last night’s tones were a lot more measured. This is the reason the market did not move too much overnight. He confirmed that the Fed will be patient and is in no rush to look at raising interest rates in the near future.

When Powell addressed the markets after the previous press conference he unnerved investors by saying that saying the Fed’s program to wind down its balance was on ‘autopilot’. The reason why it caused a problem is that it appeared at the time as though the Fed were simply looking at data rather than listening to various business leaders.

 

The US is now also finally back in business after spending a total of 5 weeks in Government shutdown with as many as 800,000 workers being affected. Some reports have suggested that a total of US$11bn has been wiped off US GDP so the Fed also had the problem of managing the fallout from the issue.

Employment to impact the Pound vs the US Dollar 

Later on this afternoon the US will announce the latest employment figures with the release of Initial Jobless Claims due out at 13:30. The expectation is for a figure of 215,000 so any difference compared to this estimation could cause movement on GBPUSD rates later today.

We end the week with one of the biggest events in the monthly calendar on Friday afternoon. Unemployment data, Average Earnings as well as Non-Farm Payroll data is also set for release at 13:30 on Friday.

US jobs data has been close to record highs in recent times, with Donald Trump taking credit for the positive data. However, as this period will also include the time when the Government was shut down this is likely to have had some sort of impact on the data, we could see a lot of movement on GBPUSD exchange rates to end the week.

If you’re thinking about buying US Dollars it may be worth taking advantage of these recent spikes with GBPUSD exchange rates currently at their best level to buy US Dollars with Pounds in over two months.

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