The Pound to US Dollar rate has been rising recently, hitting the best rate to buy US Dollars with Pounds in three weeks.
Mid-term elections outcome causing US Dollar weakness
The Mid-term elections saw Donald Trump have some mixed success by winning the Senate but losing control of over the House of Representatives. This effectively means Donald Trump will not be able to assert as much control over policy as he had previously planned. It also means that some of his election pledges may not be allowed to take place.
The result of the election has caused the Dollar to weaken hitting 1.3150 during this morning’s trading session creating some good opportunities to buy Dollars with Pounds.
The further problem for the US economy with this particular result is that suggestions are being made that this could hinder US growth, but we will have to wait and see how this turns out.
Will the Federal Reserve raise US interest rates?
Later on this evening the US Federal Reserve will be meeting to discuss their latest decision on monetary policy. US interest rates are currently sitting at 2.25% and the expectation is for further interest rate hikes to happen, with one more before the end of this year.
However, owing to the recent Mid-terms I do not think that the Federal Reserve will act tonight. Although I fully expect another rate hike to happen before the year is out.
Therefore, although there is unlikely to be a change in interest rates this evening the movement for the Pound vs US Dollar is likely to happen depending on the tone used when the Federal Reserve deliver their accompanying statement.
If you’re planning a currency transfer in the short term make sure you pay close attention to tonight’s interest decision meeting.
Tomorrow morning could see a very busy period on the foreign exchange markets as the UK will publish GDP for the third quarter as well as the latest set of Trade Balance data so expect to see a very busy start to the morning.
If you have any questions about exchange rates or would like to discuss a currency transfer in more detail please send me a message using the form below: