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GBP/USD Rate could Drop on US Tax Reform Vote

Last week’s high: $1.3453

Last week’s low: $1.3306

Pound US Dollar Rate Undermined by Brexit Timeline

While the UK scored a win in Brussels last week, this ultimately sent the Pound tumbling on Friday.

The UK was finally granted permission to start the next phase of Brexit discussions, but statements about transition and trade talks sent Sterling spiralling lower.

The US Dollar, meanwhile, was shifted by last week’s Federal Reserve interest rate decision.

The Fed bumped rates up to 1.50% as expected, but disappointingly only hinted at 3 rate hikes in 2018 instead of 4 as some predicted.

USD Outlook: GDP in Focus

After a week of drama, the days ahead are fairly devoid of interesting news aside from growth figures for the UK and US.

Estimates are for a small quarter-on-quarter UK GDP upgrade on Friday, which could raise confidence in the Pound.

In a similar situation, final US GDP readings will also come out this week. Estimates are for GDP growth on both the month and the year, which could support the US Dollar.

An additional US event might be a Senate vote on Republican tax reforms, which will represent yet another step in making the plans reality.

If the plans are rejected by Democrats and dissenting Republicans, the US Dollar could crash due to the negative implications for future policy measures.

Key Events

20th December

13:30 US Q3 Finalised GDP

21st December

09:30 UK Public Sector Net Borrowing

22nd December

09:30 UK Q3 Finalised GDP

13:30 US Durable Goods Orders

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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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