There still appears to be some confusion as to when the FED will rate hikes but the likelihood for one in June is looking less and less hopeful. The outstanding EU referendum is likely to pressure on GBPUSD rates this week so be mindful of how the polls could impact rates.

President Barrack Obama essentially confirmed the candidates for the US Presidential race that takes place this November by endorsing Hillary Clinton. Whilst the Democratic Party race between Clinton and Bernie Sanders was all but over with Clinton having accrued enough delegates it wasn’t a full gone conclusion. However the endorsement from the influential Obama should set up Republican Donald Trump against Hillary Clinton who will become the first female candidate in the race.

Janet Yellen Causes Confusion

Chairlady of the Federal Reserve Bank Janet Yellen last week suggested it is not the responsibility of the Federal Reserve Bank to provide explicit guidance on when the next interest rate hike may occur. Yellen suggested that “only on rare occasions” will the central bank spell out when it’s going to move. This has created some confusion as to the path US Monetary Policy may take in the future.

The likelihood of an interest rate hike in June is very low after the lowest number of new jobs created in 7 years was released for May. Even the expectation of a hike in July is looking of the cards as the US enters into the volatility of an election. If you are looking to buy US Dollars please get in touch with your broker as there could be substantial swings for the GBP/USD rate this week.

This week for the USD

Tuesday will see the release of the Retail Sales for May and the Import and export Price Index which shows the difference in the price of traded goods compared to last month. Wednesday the Federal Reserve Bank will meet to discuss the interest rate and there will be a speech from Janet Yellen afterwards. At the end of the week the CPI will be released for May along with the Baker Hughes Oil Rig Count.

A number of key economic releases this week for the US may impact Sterling in conjunction with the EU referendum. Speak to your broker today to discuss your options on 01494 725 353 or email me here.

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