Fed Reserve Chairman Jerome Powell is due to speak today and release the latest interest rate decision, which will be a good indication of whether the predicted three further interest rate hikes this year are likely to come to fruition. Daniel Fozard has covered the potential impact of a rate hike on the USD in his Dollar report below. The table below shows the difference in USD you could have achived when buying £200,000.00 during the high and low points of the past week.

Currency Pair% ChangeDifference on £200,000
GBP/USD0.89%$2400
Trump at the UN weakens the USD – Oil and Trade

The historic summit between US President Trump and North Korean leader Kim Jong-un in Singapore, has been hard to miss to say the least.

A document signed by both leaders, described by Trump as “very comprehensive” and an agreement which would “take care of a very big and dangerous problem for the world”, focused on four key areas surrounding the future economic, peace and military relationships between the two counties.

Whilst the political importance of the event was clear, the response of the currency markets hasn’t benefited as what might have been expected, with the USD losing ground against most major currencies.

Inflation data released yesterday saw base CPI increase by 0.2%, which was in line with expectations and Core CPI also increase by the same amount.

This has meant that both sets of data have pushed up the annual rate of inflation and moved further away for the FED’s target for both of 2.0% in addition to reaching a 6 year high.

Monetary policy statement and Retail data

The focus for the rest of the week will be on the Federal Reserve Chairman Jerome Powell’s monetary policy statement today and interest rate decision, followed by the key retail data releases on Friday.

Since inflation has risen there is a good chance of an interest rate hike which would be in line with Powell’s indications earlier in the year that rates could be raised by a further 2 or 3 times.

The retail figures are currently expected to show a slight growth of 0.1% or 0.2% but this could change as the week progresses.

This being said, if the Fed does decide to raise interest rates later today, a decline in these figures would have little effect on the strength of the USD and I would be confident that there would be a strong finish to the week for the currency.

Those looking to purchase dollars could benefit from securing their currency before the end of the week.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.