US data remains mixed this week which will put further pressure on the odds of an Interest rate hike in June. GBPUSD rates are at their highest level since January and those looking to buy US Dollar's may wish to do so now.
Yesterday Markit Services PMI (Purchasing Managers Index) data came out worse than the previous month, which shows a slowdown in the US Services sector. As a result of this negative data, USD weakened slightly against the Pound throughout the course of yesterday. The main reason for the recent USD weakness has been due to the chances of Britain remaining in the EU becoming greater, as polls have suggested that the gap between Leave voters and Remain voters is widening in favour of staying. This is currently the best time to buy USD with Sterling since the beginning of the year, but as we saw previously in the run up to the Scottish Referendum and the UK General Election, this can all change rapidly.
This afternoon we will see Durable Goods orders data released which outlines the cost of orders received by Manufacturers for products designed to last longer than 3 years, along with Initial Jobless Claims for this week. If either of these releases are remotely negative we could see further USD weakness, and I feel that it is unlikely that the FED will raise Interest rates at their next meeting on 15th June if data continues to disappoint. They will have another four opportunities this year to make any rate changes, but with the EU referendum so close now, I feel that they will wait to make any changes until the UK’s fate has been established.
Preliminary GDP figures for the first Quarter of this year are released tomorrow afternoon and an improvement from the previous quarter is expected. This is heavily linked to Interest Rate decisions, and could provide an insight into the FED’s next decision. If these figures impress we could see GBP/USD weaken, so moving ahead of this may be wise if you have Dollars to buy with Sterling.
As mentioned above, GBPUSD exchange rates are at their highest level since January, creating a perfect opportunity for USD buyers. Speak with one of our brokers today on 01494 725 353 to discuss your options.
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