Will the Dollar get stronger in 2019? Interest rate hike from the Federal Reserve, but a dovish one

Pound to US Dollar exchange rate Sterling falls back below 1.25 against Dollar

Will the Dollar get stronger in 2019? The Federal Reserve made their move last night to raise interest rates for the fourth time in 2018, in a move that went against Donald Trump’s wishes. This so far has had a minimal impact on Dollar exchange rates.

The reason for this is that many investors and speculators had wide expected the rate hike, and the currency markets quite often move on expectations as well as fact.

What would have been of great interest would have been the fact that Fed Chairman Jerome Powell came out to suggest that expectations for hikes in 2019 would be lowered from 3 further interest rate hikes down to just 2.

Growth forecasts were also lowered from 2.5% down to 2.3% which would have been seen as a slight negative for the Dollar too, and the fact that this interest rate hike has been seen as a ‘dovish’ hike is another reason why we have not seen much movement for Dollar exchange rates.

US Dollar forecast: Will the Dollar get stronger in 2019?

Many analysts are concerned that the recent bout of Dollar strength may not continue throughout 2019. Of course against the Pound in the early part of 2019 a lot depends on the outcome of Brexit, where we will be due to have a key Parliamentary vote in mid January.

On the Dollar side of things it has been suggested that the vast pace of growth cannot continue and the fact that we have seen a growth downgrade from the Federal Reserve already suggests that they may expect things to tighten a little in 2019.

I personally feel that we may not even see 2 rate hikes next year and that the Dollar may start off fairly solid but could weaken as the year progresses and expectations drop back off again.

It is important to remember that currently the price to sell Dollars or indeed any currency directly linked to the Dollar is still exceptionally good. Should 2019 head where many experts predict, now could be a great time to look at bringing back those hard earned overseas funds.

If you wish to roll the Brexit dice then you may get luckier still, but do be wary that currencies have a funny way of swimming against the tide to prove the majority wrong, and there is no guarantee that the Pound will take a bashing in the near future, it could still do quite the opposite.

If you have a currency exchange to carry out involving buying or selling Dollars, or any currency pegged to the Dollar such as AED, SAR or QAR then it is key still to make sure you get the most for your money. Should you wish to have help with both the timing of any exchange along with getting a highly competitive rate when you come to book it then you are more than welcome to get in touch for our expert help.

You can contact me by filling in the form below and I will be happy to get in touch with you personally to discuss your personal situation in more detail.