Fresh GBP/USD direction determined this week

A key member of the Federal Reserve Bank in the United States suggested the economy was hitting its targets which alongside a slightly higher than expected Baker Hughes Oil Rig count has helped the dollar fight back against the pound. Life remains difficult for USD buyers with pounds and the likelihood of further USD strength persists as speculation mounts over the likelihood of a September interest rate hike from the Fed. The next Fed meeting is September 21st and expectations are fairly mixed on what to expect.

The rising of interest rates helps to strengthen a currency and it is further expectation of raising rates which has underpinned USD strength for almost 18 months.

Important news to drive the US dollar this week could be the Jackson Hole Symposium where central bankers from all over the world will meet to discuss finance and plans. Most notably Janet Yellen the Chairlady of the Federal Reserve Bank will speak on Friday afternoon which is when we also have the latest US GDP release. If the Fed Chairlady is not as upbeat as some expect then we could easily see the USD weaken.

US Election - Clinton leads Trump by 8 points

Since the nominee conventions in July more than 20 polls have shown Hilary Clinton to be ahead in the polls which might explain a fairly muted reaction so far on financial markets as we approach the election in November. Trump remains a huge threat to the global economy with his bashing of NATO and desire to disrupt and reform perceived weaknesses in international trade. For now markets do not seem to be factoring this into US Dollar exchange rates but surely that cannot last? We saw with Brexit that the unexpected can happen and it would be a mistake to write off Donald Trump’s chances with many weeks left. With USD sellers enjoying some of the best rates in over 30 years there are some very compelling cases to capitalise on the current rates to avoid the potential risk of US Dollar exchange rates weakening sharply.

US Dollar sellers can still enjoy the 30-year highs against Sterling, why not take advantage of this opportunity before its too late? Call us today on 01494 725 353 in the event you have US Dollars to sell for Sterling.

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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.