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Crunch Time for GBP/USD – Fed Rate Decision and EU Summit Ahead

Yesterday’s high: $1.3522

Yesterday’s low: $1.3339

Brexit Deal Leaves Sterling Volatile

Last week saw the Pound fluctuate wildly against the US Dollar in response to the changing pace of Brexit discussions.

A last minute exit deal was struck on Friday, but concerns that trade talks could still be a long time coming left GBP struggling.

In the US, traders were delighted by a rising non-farm payrolls figure, but optimism was tempered by reports of falling consumer confidence.

USD Outlook: Fed Rate Decision Ahead

USD traders are focusing on Wednesday and the last Federal Reserve interest rate decision of the year.

The Fed is predicted to hike US interest rates from 1.25% to 1.50%, and the move could lift the US Dollar as long as further rate hikes are hinted at.

The Pound might be able to rally against the US Dollar towards the end of this week if the EU summit goes well and the UK is given the green light to progress with trade talks.

Signs that negotiations will kick up a gear in 2018 would be Pound-supportive, while any hints at delays could leave Sterling struggling.

Key Events

12th December

09:30 UK Inflation Rate

13th December

09:30 UK Average Earnings

13:30 US Inflation Rate

19:00 US Federal Reserve Interest Rate Decision

14th December

12:00 UK Bank of England (BoE) Interest Rate Decision

EU Summit on Brexit Begins

15th December

EU Summit Findings on Brexit Progress

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris


Senior Currency Broker
T: 01442 892 065

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