Janet Yellen yesterday suggested President Donald Trump’s economic plans going forwards could start to generate uncertainty. The fiscal policy changes Trump is hinting at caused Yellen in front of Congress to raise her concerns for the future.
The Head of the Federal Reserve was optimistic however with regards to rate hikes. Yellen since raising rates last December has suggested there is likely to be further rate hikes over the next few years. The comments today are being received by analysts as an indication that every meeting going forward is live and a change to the rate could come at any time. The US Dollar rallied however the major gains were lost by the end of the day. The markets this time last year were expecting four hikes following a speech by Yellen, on this occasion the response was reserved with talk of future hikes.
However, one of the biggest changes from last year is that the Chairlady herself has taken on a hawkish attitude with optimism for the US economy, having previously been notorious for her Dovish outlook.
The leaders of major US retailers including Best Buy and Target met with Trump to discuss tax and import changes. The businesses are thought to be supporters of tax code changes with an expectation of cuts coming for major corporations. However unsurprisingly the import tax was protested against with thoughts that if Trump can be persuaded the proposal may be dropped.
This afternoon there will be building permit data along with the Philadelphia Manufacturing Survey. Both these release will provide an insight into the economy and any unexpected results could cause significant market movements. Building permits are expected to show an improvement from the previous month, whilst the manufacturing survey is likely to be significantly lower than January.
If you’re looking to sell US Dollars I would consider capitalising in on the current rates of exchange. The level that GBP/USD reached yesterday has only been achieved a few times in the last 30 years. If you do have a requirement, contact your broker to discuss your options today on 01494 725 35 or email me here.
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