Three rate hikes in 2017?

Philadelphia Fed President Patrick Harker has pointed at 3 rate hikes of 25 basis points being appropriate in his opinion for 2017. Harker was also optimistic of the 2% inflation target to be hit this year or next. Whilst this is a similar story that Chairlady Janet Yellen provided last week, the more members of the FOMC who come forward the more belief there will be of the hikes taking place.

The GBP/USD rate currently resides around the 1.24 and in my opinion this could start to move towards the 1.20 level. Whilst the Brexit discussions occupy Sterling any overly negative shock events could cause a major movement. If you do have a USD requirement I would consider alerting your trader to make sure you’re up to date with the latest information.

Trumps policies have created over optimism

Goldman Sachs strategists have warned of a fallout as the S&P 500 reached a new high on Tuesday. They have maintained their fears that there is over optimism from the effect Trump will have with new tax and trade policies. Policy changes are unlikely to be quick enough to help traders in the short term to reach profits and could eventually cause a mini sell-off. Goldman predicts that the S&P 500 will be 2% lower from the current level by the end of 2017.

FOMC Minutes

The minutes from the latest Federal Open Market Committee meeting will be released this afternoon and will share an overview of the meetings discussion. The minutes will also reveal the voting pattern which will give an indication into how close a rate hike may be. If a member of the committee who is often dovish has voted in favour of a hike, it is likely to become a very real prospect for the future.

The US is in a strong position economically but remains politically vulnerable to Trumps policies. Speak with a member of our team today if youd like to secure a rate, bearing in mind there are huge unknowns still at play which could affect USD exchange rates. Call us on 01494 725 353 or email me - Lewis - at lme@currencies.co.uk to learn more.

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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.