Interest rates kept on hold

It was no surprise yesterday evening that the Federal Reserve decided to keep interest rates on hold at 0.5%. The FED exclaimed business conditions had improved however the bank are still waiting until the 2% inflation target is met. When interest rates were hiked in December 2015, Chairlady of the FED Janet Yellen predicted 4 hikes would occur in 2016 which gave US dollar exchange rates a boost.

However in recent times that figure has been revised down to 2 hikes in 2016 and I still feel this is optimistic. With the Presidential election close to full swing and the pressure Donald Trump would put on the economy if made President, I don’t believe the US will raise interest rates until they know who the next President will be. If Trump does not get into power I expect to see a rate hike in December.

Data Watch

Today at 12.30pm the US release their latest GDP numbers. GDP shows the value of all goods and services produced within a certain time-frame and is a good indicator of how well the economy is performing. The revised figure is set to show a steep decline of 0.7% therefore we could see the USD weaken this afternoon.

Throughout Friday the US release a host of data including Personal Consumption, Personal Income and Personal Spending. Due to the amount of data releases expect a volatile trading period Friday afternoon.

Thank you for reading todays US market report, please note that US GDP figures are due to be released this afternoon which could see US Dollar weaken on the back of the results. Now could be a good time to get in touch if you have requirements for US Dollar. You can email me here for more information.

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