Federal Reserve still undecided

So it seems that we are still no closer to knowing whether or not we will see an interest rate hike in the States before the end of the year, and it appears that members of the Federal Reserve are fairly split too.

Investors are currently pricing the chance of a rate hike coming from the Fed in December at 45%. We saw a hike in rates in December 2015 which led to Dollar strength consistently for a while so should speculation of a rate hike in December continue to mount we may end up seeing the Dollar start to reap the benefits.

Will the election impact the Dollar?

On the flip side of this the U.S may be in for a period of political instability in the coming months as the election starts to really heat up. We are already starting to see some fairy underhand tactics arising and I personally do not see the race for the white house getting any more pleasant.

Political instability is one of the major factors that can impact a rate of exchange and you can bet your bottom Dollar there will be plenty of that to come so although if you are looking at the economy you may think that the Dollar could get a lot stronger if you factor in the trump card we could be right back up into the mid-1.30s before you know it.

Later today we have the Baker Hughes oil rig count which is the only big economic release that should impact the Dollar today unless any surprises pop up. We have seen the number of oil rigs rise for seven consecutive weeks so if this trend continues then we may see some Dollar volatility later on this afternoon. If the oil rig count is going up then this means that the Dollar should gain strength as it should keep the price of crude oil at bay. With the U.S being the biggest importer of oil a higher crude oil price means more USD will be leaving the country therefore the Dollar tends to weaken off.

Pound to US Dollar rates remain volatile with a number of political and economic events ahead. Talking to our brokers may help make a timed currency transfer. Call us on 01494 725 353.

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