Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements over the course of trading yesterday affecting US Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The US Fed held interest rates last night as widely expected maintaining levels at 1.25%. This particular meeting has been largely overshadowed by speculation as to who will take over from current chair Janet Yellen. The Fed has raised rates twice this year since January and it is highly likely that there will be a rate increase in December.
With no interest rate hike last night the stage is now being set for a hike next month.
Although there have been some weaker economic data releases including a very poor non-farm pay rolls number last month the expectation is that the Fed will deliver in December as it has done for the last two consecutive years.
Today should see an announcement from US President Donald Trump on who the next US Fed chair will be after many months of speculation. The favourite to take over from Janet Yellen at the Federal Reserve is Jerome Powell who currently sits on the Fed’s board of governors. He is seen as a steady pair of hands and would likely follow quite closely in Janet Yellen’s footsteps keeping interest rates relatively low. He does appear to be more relaxed than Janet Yellen with regards regulation, something that Donald Trump would like to see less of, and this is why in my view he is the most likely choice. The main challenger is John Taylor who is a Stanford University economist although he would be expected to tighten policy more sharply and raise rates higher. As such there are two very different approaches to monetary policy here and depending on the announcement there could be a sizeable shift in dollar rates today. If Jerome Powell is nominated then this could be seen as positive for the dollar.
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