Yesterday afternoon the Consumer Price Index for the US fell just short of the 2.3% expectations with a reading of 2.2% which was the same as the previous month. Inflation has in the past few months remained above the Federal Reserve’s target of 2.0% however there was an expectation that inflation may move more comfortably above this point, however that wasn’t the case.
Since the beginning of the week the US Dollar has given up over two cents against Sterling, with a £200,000 transfer achieving you nearly $5000 more if you traded at the right time. Your account manager here at Foreign Currency Direct is able to keep you up to date with the market and alert you to any movements in your favour. Considering there is positive Brexit movement on the horizon, if you’re looking to sell US Dollar then it may be worth you looking into your options sooner rather than later.
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President Trump has continued to comment on the Federal Reserve’s policy, calling the Central Bank “loco” in comments yesterday. Donald Trump has suggested the Fed’s intention to continuously raise rates is crazy and suggested that the fall across US Stock markets has been caused by their actions. Concerns are starting to raise with the cost of repayments as the interest rate continues to rise, especially in an economy that is based so much on credit.
Trump earlier this year cut taxes and any benefits to encourage consumers to spend money, however this will start to disappear as interest repayments increase. Presidents in the past tend not to comment on Monetary Policy however with Trump this is not the case. Less than 10 months after Trump nominee Jerome Powell was appointed Chairman of the Federal Reserve trouble is brewing. At the end of yesterday Trump commented that he wasn’t going to fire Powell, he was just ‘merely disappointed’. This story certainly has plenty of distance to travel and the Fed plan to follow through with another rate hike this year, if they do start to come to blows again this could create USD volatility.
Any uncertainty surrounding the future of the US economy should not be ignored especially after such a prominent rise in the last six months. There could potentially be plenty of time for readjustments with the US economy and the US Dollar in the next few months.
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