The chance of a FED hike next month diminish to almost 0% probability, can we expect a hike at all this year? You can view live exchange rates at anytime by clicking here.

When will the FED next raise interest rates?

GBP/USD rates have remained fairly flat of late, with the Pound struggling to break through 1.45 on the exchange. The USD has held its value well, which isn’t a real surprise when you consider the stance of each of the central banks and current economic climate. In the US the discussions are centred on when the FED will next raise interest rates, whilst in the UK there are whispers that the BoE may look to cut rates again before the end of the year. This is more likely if economic conditions do not improve but even the thought is enough to distort market perception and handicap any prospective GBP spikes.

Personally I do not expect the FED to raise rates next month, with recent US data mixed at best. This could potentially handicap any further rate hikes this year (although I am still expecting one more), especially as later this year the focus will be on the US elections. This period of uncertainty could handicap the USD and if I were making longer-term predictions I would expect the USD to hold its value over the coming months, before an improvement for the Pound later this year.

It’s been a fairly quiet week for US data releases and looking ahead we have some employment data later today. This is followed on Friday by a host of inflation figures and US Retail Sales, which is always a key release for investors. With an improvement expected, we could see the USD secure its position under 1.45 against GBP.

The US Dollar will be experiencing times of uncertainty ahead, the US election and Interest rate decisions could weaken the currency in the weeks to come. Speak to one of our brokers today if youd like to know how more about how these events could impact your buying requirements. Call us on 01494 725 353 or email me here.

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