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GBP/USD Under Pressure on Fed Hike Bets

Yesterday’s high: $1.3250

Yesterday’s low: $1.3060

Hawkish Fed Comments Boost US Dollar

An unexpectedly sharp dip in US jobless claims figures helped to bolster demand for the US Dollar on Thursday.

Markets were encouraged by this latest sign of tightening within the domestic labour market.

Hopes for an imminent interest rate hike from the Federal Reserve were boosted further by hawkish comments from San Francisco Fed President John Williams.

Although Williams is not a voting member of the Federal Open Market Committee (FOMC) this year, investors still took this as a positive sign that policymakers remain generally in favour of further tightening.

USD Outlook: Volatility Likely on Jobs Data

Demand for the ‘Greenback’ could weaken during the course of the day, however, as markets await the latest non-farm payrolls report.

USD exchange rates could come under pressure if wage growth data fails to impress, with a weaker showing having the potential to discourage the Fed.

On the other hand, if average weekly earnings continue to pick up this could add to the case for an imminent interest rate hike and boost the US Dollar further.

Key Events

6th October

13:30 US Change in Non-Farm Payrolls

13:30 US Average Hourly Earnings

20:00 US Consumer Credit

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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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