With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in USD you would have achieved when buying £200,000.00 during the high and low points yesterday.

Currency Pair% ChangeDifference on £200,000
GBP/USD0.4932%$1260
North American Free Trade Agreement

Janet Yellen’s speech today could cause volatility on GBP/USD

The Chairlady of the Federal Reserve,(FED) Janet Yellen is due to speak at the Jackson Hole symposium tomorrow an investors are eagerly anticipating her speech.

The Jackson Hole Symposium is an annual symposium sponsored by the Federal Reserve Bank of Kansas City since 1978, and held in Jackson Hole, Wyoming, since 1981. It is a forum for central bankers, policy experts and academics to come together to focus on economic issues.

Yellen could give away an indication as to FED’s stance interest rates moving forward and if she does this could cause significant movements on the markets.

Yellen’s term ends in February 2018 and Trump clearly is not a fan of Yellen feeling monetary policy should be changing in a more positive, aggressive fashion. There is the possibility this could be her last address as US chief policy maker.

The US stock market remains in good health and employment data has been impressive which some may consider as justification for further rate hikes. Inflation however is not so impressive and could be a reason to hold back on an increase in interest rates.

Odds have been priced by traders at 60.3% that rates will be kept on hold in December at 1.25%. Personally I think Trump’s unpredictability should be taken into consideration despite the Fed being meant to act as a separate entity to the government. I would be surprised to see any further hikes this year.

I think Yellen will have a dovish tone and there is potential for USD weakness.

GDP, Non Farm Payrolls and a Bank Stress Test make for an interesting week for the Dollar

GDP is due on Wednesday and I expect a slight increase which could benefit the dollar.

Friday will be a very interesting day with high volatility expected. Nonfarm payroll data presents the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. It may be wise to trade before this release as it very unpredictable and can cause big swings on the market.

The bank stress test is due later in the day presents a result of a bank stress test for the largest U.S. banking organizations. The test is conducted to determine their reactions to different financial situations. The result would affect the stance of monetary policy, and assess the risks to its long-run goals of price stability and sustainable economic growth.

For more information on how future data releases could affect an upcoming Dollar transfer, call our trading floor on 01494 725 353 or email me here.

News

Read more articles
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.