What has influenced the Pound to bounce back against the US Dollar?
The pound to US dollar exchange rate has bounced back from a two year low in the past 24 hours, as UK growth figures showed a slight gain to 0.3% and Chairman of the Federal Reserve Jerome Powell had also suggested a slightly gloomy outlook for the US economy in the coming months, which has opened up speculation of an interest rate cut looming.
Jerome Powell cited that trade tensions (trade wars with China) and general economic performance is starting to drop for the US economy and because of these comments the markets have taken a hint that the Fed may be open to cutting rates. An interest rate cut is generally seen as negative for a currency as it can be seen to make it less attractive to investors due to the offering of a lower return.
Donald Trump has been vocal on US interest rates
The currency markets tend to move on speculation as well as fact and this is quite a turn of events following on from a consistent approach to raising interest rates over the past few years. Donald Trump has been quite vocal in his dissatisfaction of the hikes recently and has been calling for the Federal Reserve to wind rates back and it seems like he may get his wish in the coming months.
Speeches from BoE and Fed: Could there be further movement for the GBP/USD pairing?
We have very little in terms of economic data left to come out for the rest of the week, however we do have speeches from both the Governor of the Bank of England and the Chairman of the Federal Reserve again, so any comments that hint towards changes in fiscal policy could see volatility for the GBP/USD exchange rate as we head to the end of the trading week.
If you have the requirement to exchange dollars or any currency pegged to the dollar in the near future, then it would be well worth getting in touch with us here at Pound Sterling Forecast. We can help you not only in terms of keeping you up to date with market information but also offering a competitive rate of exchange on any transaction you carry out.
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