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GBP/USD Slides as Fed Raises Interest Rates

Last week’s high: $1.3200

Last week’s low: $1.3033

US Dollar Bolstered by the Fed’s Upbeat Outlook

The Pound US Dollar exchange rate surged as much as a cent at the start of last week’s session as the pairing looked to recoup some of the ground lost during the previous session.

This rebound in Sterling appeared mostly driven by a renewed sense of Brexit optimism following suggestions from the UK’s Brexit secretary Dominic Raab and German Chancellor Angela Merkel that a deal could still be reached in October.

However GBP/USD went into reverse in the second half of the week as the Federal Reserve’s rate hike and hawkish policy statement, along with a bumper US GDP reading helped to bolster the appeal of the ‘Greenback’.

The US Dollar was then able to make one final push at the end of the session as demand for USD was buoyed by weakness in the Euro.

USD Outlook: US Employment Figures to Bolster USD?

Looking ahead to this week, the most notable data release of the session is expected to be the latest US labour figures at the tail end of the week, with the US Dollar likely to strengthen if the US records another robust expansion in payrolls in September.

Meanwhile the Pound may struggle at the start of this week’s session with the release of the UK’s latest PMI stats, with economists forecasting that growth across the UK’s manufacturing, construction and service sectors will have slowed last month.

Key Events

1st October

09:30 UK Manufacturing PMI (Sep)

15:00 US ISM Manufacturing PMI (Sep)

2nd October

09:30 UK Construction PMI (Sep)

3rd October

09:30 UK Services PMI (Sep)

13:15 US Employment Change (Sep)

15:00 US ISM Non-Manufacturing (Sep)

4th October

15:00 US Factory Orders (Aug)

5th October

08:30 UK Halifax House Price Index (Sep)

13:30 US Trade Balance (Aug)

13:30 US Non Farm Payrolls (Sep)

13:30 US Unemployment Rate (Sep)

13:30 US Average Hourly Earnings (Sep)

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

Arron Morris
Currency Trader
T: 01442 892 065

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