Will the US Federal Reserve cut interest rates soon?
At the start of 2019 the currency markets had expected to see a number of interest rate hikes in the US. However, in recent months expectations have changed. The US Federal Reserve have hinted that they may be getting ready to change monetary policy.
Later today US Fed Chair Jerome Powell will be speaking ahead of the next meeting due to take place on 31st July. If he suggests that an interest rate cut may be coming this could have a bearing on GBP/USD exchange rates later this afternoon. However, last week we saw much better than expected US Non-Farm Payroll data which saw GBP/USD interbank rates hit the 1.24 levels. Therefore, it’s important to make sure you keep a close eye out for what may happen in terms of monetary policy later on this month.
GBP/USD exchange rates are now trading at their lowest levels since the start of the year which is good news for anyone looking to convert US dollars into pounds.
Pound under pressure politically
We are now just two weeks away from when the next Tory leader will be announced. The front runner appears to be Boris Johnson and typically when a new leader comes in this strengthens the currency involved. However, as Johnson has been rather vocal about the potential of a no deal Brexit even if he does win this may not provide the pound with a boost vs the US dollar.
In the meantime the UK economy is struggling to grow. The services and manufacturing data have both been struggling highlighting problems within the British economy. UK Industrial and Manufacturing Production data is due tomorrow morning so another slowdown could see further problems for the pound vs the US dollar.
If you would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.