Pound to US dollar exchange rates have been more volatile than usual with no shortage of events for traders to pore over in their assessments of the relative values of the pairing. On the US dollar, interest rate expectations are the key topic today, with investors closely monitoring whether or not the US Federal Reserve will look to cut their base interest rate this evening.
Brexit weighs on the Pound
For sterling, Brexit uncertainties have been the key issue, with the apparent increasing of no-deal prospects leading to the pound having a very tough week. We are now awaiting further news on the UK Brecon by-election which is tomorrow, where if the outcome shows a Lib Dem victory, the Conservatives majority in parliament could be reduced to a level which makes a vote of no confidence more likely.
Bank of England interest rate decision tomorrow
Tomorrow is also important for sterling with the latest Bank of England interest rate decision, where we could see a change in the outlook which might affect the currency market. A lower interest rate by nature will make a currency less attractive to hold, although the prospect of the US Federal Reserve cutting their interest rate has not weakened the dollar too much. This is because the US economy and interest rates are still outperforming the rest of the world’s leading economies.
How much will the US Fed cut interest rates by?
A big debate around the US interest rate decision this evening will be the outcome from the US Federal Reserve, and whether they will be looking to cut by 0.25% or 0.5%. Many analysts are predicting that it will be a 0.25% cut, but as can often be the case in these situations, it might be more the commentary around the event which attracts attention, as investors seek to gauge the reasoning behind the Fed decision.
It is the best time in 2 years to sell US dollars for pounds, which is presenting more pounds for clients looking to sell US dollar for sterling. If you would like to learn more or have an upcoming currency transfer, please feel free to contact me directly using the form below. I look forward to hearing from you.