The most recent FOMC minutes are due out on Wednesday, which are likely to provide some insight into the Fed's plans during their meeting. The expectation is for an interest rate hike in March. The table below shows the difference in Dollars you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
After getting very close to pre-referendum levels three weeks ago the Dollar has strengthened by over 2%, or the difference of US$5,600 on a currency transfer of £200,000. The likelihood is that US interest rates will go up again when the Federal Reserve next meet on 21st March.
The latest FOMC minutes are due to be released on Wednesday evening and these are likely to provide an insight into what the Fed will do at next month’s meeting. With inflation levels under control as well as strong growth and positive employment the US is looking more than prepared to increase interest rates again.
The minutes are expected to support to confirm that interest rates will be going upwards at next month’s meeting and further evidence of another rate hike further down the line is likely to strengthen the Dollar against the Pound.
On Thursday Initial Jobless Claims are due to be published with the expectation of 230,000 new claims for state unemployment insurance. This has been falling in recent months providing further support for the Federal Reserve to look at raising interest rates. Also, due out tomorrow afternoon is February’s estimate for both Services and Manufacturing data. Like with the Eurozone both data sets have been showing continued signs of improvement so I think we could see GBPUSD rates fall again below 1.40 again tomorrow afternoon if my estimate is correct.
In the meantime the US stock market has once again started to improve which has helped the Dollar strengthen. We have seen the Dow Jones improve for the sixth day in a row and the stock market is now close to the recent highs hit earlier this year.
With the ongoing political uncertainty surrounding the UK I think we could see GBPUSD rates move lower as we progress this 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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