Buying US Dollar rates of exchange had the largest rally in since the stabilisation of the Pound over the past seven trading days. This was caused by a combination of poor inflation figures in the US to stand in stark contrast to a UK showing healthier consumer activity. A deterioration was seen during the month of December, but on a yearly basis inflation is expected to be the same at 1.5%. Whilst this is still better than the UK’s, the value of a currency changes according to any improvements or worsening in key performance areas so GBP/USD climbed to provide greater breathing room above the 1.20 mark.
The potential for a US rate hike is a key feature underpinning the value of the Dollar at the moment. With the US election operating in the background most analysts are predicting the next opportunity to raise rates to be at the December meeting.
The most recent comments from Janet Yellen, the Chairperson of the Federal Reserve suggest a very dovish view in countering calls for a rate hike: ‘Extreme economic events have often challenged existing views of how the economy works and exposed shortcomings in the collective knowledge of economists.’ To sum up, we’re worried about much of the uncertainty pervasive in the global economy, and just because some economists say we can raise rates now doesn’t mean we will.
This lower inflation data is another excuse they can pluck out if need be and we may finally be seeing a chink in the Dollar’s armour. Given that there is so much room for GBP/USD to improve at the moment, with the Dollar’s current strength measured in decade highs.
I strongly recommend that anyone with a USD selling requirement should contact their broker to discuss the currently heavily inflated and tempting trading levels in case they continue to gradually tick away. You can call us today on 01494 725 353
Would not hesitate to use again, Joshua from FCD looked after us very well and we were able to get a good rate of exchange, the whole process was very quick and painless.
This was a faultless service from start to finish. Our contact, Joshua, could not have been more professional and efficient. He guided us excellently through all the stages of transferring money to the UK. Joshua even managed to get us the best exchange rate available at the time, and he did this with a pleasant manner and exceptional politeness.