Will US GDP impact Janet Yellen’s speech?

Friday at 1.30pm the US release their latest annualised GDP numbers. GDP shows the value of all goods, services and structures produced within a country and gives an excellent insight to the strength of the economy. The annualised prediction is for a decline to 1.1% from 1.2% which in turn could weaken the US dollar.

An hour later Chair of the Federal Reserve Janet Yellen will give a speech to the public. The hot topic will be future interest rate hikes and at the end of last year the FED forecasted 4 rates hikes throughout 2016. At the moment the FED have not changed their monetary policy position this year.

If GDP numbers fall, there’s a chance Janet Yellen will be dovish with her comments in regards to future interest rate hikes. Furthermore, with the Presidential elections only 3 months away, I would be very surprised to see Yellen hint of any chance of a hike until the elections are over. I expect US dollar weakness throughout Fridays afternoon trading period.

Other data releases this week

Today at 1.30pm Durable Goods orders for July will be released. This release measures orders that have been received by manufactures for goods that last over 3 years. The consensus is for a fall from 3.9% to 3.5% therefore this could also cause US dollar weakness.

For US dollar sellers it’s important to realise at the moment you are selling at 30 year highs! As stated above the US are to hold their election in November and past history tells us when a country has a General Election the currency of that country devalues due to the uncertainty created. If you are selling US dollars this window of opportunity in my opinion could start to diminish the closer we get to Novembers decision, when we will find out if Hilary Clinton or Donald Trump will become the next President of the United States of America.

GBP/USD exchange rates are sitting at a 3 week high, taking advantage of these opportunities could be worthwhile. Call our team on 01494 725 353 to discuss a currency transfer


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