The pound to us dollar rate has risen during the course of this week. It is now the best time to buy US dollars in the last two months, as it appears as though US interest rates may not be going up as quickly as the markets had previously expected.
Brexit positivity provides a boost for sterling exchange rates
Talks between the Conservatives and the Labour party concerning Brexit appeared to be getting somewhere and this managed to provide the pound with a boost against a number of different currencies including vs the US dollar.
US dollar forecast
Whilst most of Europe celebrates Labour day the US markets will be busy with the release of a number of different data announcements this afternoon. The first release will be Manufacturing PMI data and this will be followed later by the Federal Reserve’s latest monetary policy announcement.
As the central bank increased interest rates a number of times during the course of last year the previous expectation was for possibly another two interest rate hikes during 2018. However, as the global economy has continued to show signs of a slowdown then I think that the Federal Reserve will keep rates on hold and the press conference held shortly after could suggest that the status quo will remained unchanged for a while.
If this does happen I think we could see the dollar weaken against the pound creating some good opportunities in the short term to buy dollars with pounds.
Bank of England interest rate decision expected tomorrow
Tomorrow afternoon the UK will announce their own monetary policy at midday. The expectations are for interest rates to be kept on hold and whilst the uncertainty of Brexit continues to dominate the markets I think Bank of England governor Mark Carney may adopt a relatively cautious tone. I think at the moment the UK could afford to hike rates but until we get a clearer picture as to what will happen with Brexit rates will remain unchanged.
If you would like further information about buying or selling US dollars and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.