The US Dollar has been rising against the Pound lately which is presenting some of the best points for the US Dollar against the Pound in 2018. The market is enjoying all the positive news surrounding the US Dollar including rising interest rates and strong economic growth, the key news this week could possibly upset this however.
The US is currently enjoying the very favourable view of the market being presented and this is leading to a real rise in its value. Particularly against the Pound the prospect for further improvements seems high. This is all down to the expectations for the UK struggling further in Brexit negotiations, the main reasons weighing down the Pound.
This week sees very important news on US economic policy with the latest US Federal Reserve meeting minutes, this news is released on Wednesday and will provide further insight into just how the US views raising interest rates. I do feel there could be a danger that sooner or later the Fed members will need to be thinking of any possible damage to the economy from continuously raising rates.
Thursday sees the latest Jackson Hole Symposium which is a key event in the global economic calendar. This economic forum sees global leaders meeting to discuss and debate global economic trends, it can see some twists and turns on policy. It will be Jerome Powell’s first meeting and could provide some insight into monetary policy moving forward.
Thursday is also key since the UK Government releases its latest policy announcement on no-deal Brexit plans. This could easily see the Pound lose value and GBPUSD might slip below 1.27, or even 1.26 if it’s bad news for the UK. This will depend on the minutes on Wednesday of course and how well the market takes the news from the US.
Clients with a position buying or selling the Pound for the US Dollar now have some important considerations to make. Expectations that the Pound will lose further value against the US Dollar are by no means guaranteed but do look accurate.
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