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GBP/USD Strengthens after Trump’s Clash with the Fed

Last week’s high: $1.3254

Last week’s low: $1.3030

US Dollar Dragged Down by Trump’s Fed Spat

Last week saw the Pound progressively trade higher against the US Dollar, with a high-profile clash between the Presidency and the US central bank panicking USD traders.

President Donald Trump accused the Fed of being ‘out of control’ and ‘crazy’, primarily because it has been raising interest rates over the year and making the US Dollar stronger.

In the UK, Pound Sterling demand dipped on a Brexit scuffle involving the Democratic Unionist Party (DUP), but the GBP/USD exchange rate still closed near its best level since late September.

USD Outlook: Volatility ahead on Jobs Data and Fed Minutes

This week will bring a mix of major UK and US data releases; the main news will be the UK’s job market stats and US Federal Reserve minutes from its latest meeting.

A slower pace of UK wage growth and rise in jobless claims could cause GBP/USD exchange rate losses, as could a later slowdown in UK inflation rates.

These results would make a 2019 Bank of England (BoE) interest rate hike less likely, which could drag the Pound down.

With the Fed minutes, if they point towards an interest rate hike in November or December this year then the USD/GBP exchange rate could rise sharply.

 

Key Events

15th October

13:30 US Retail Sales

16th October

09:30 UK Jobless Claims

09:30 UK Unemployment Rate

09:30 UK Average Earnings

17th October

09:30 UK Inflation Rate

19:00 US Federal Open Market Committee (FOMC) Minutes

18th October

09:30 UK Retail Sales

 

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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 Broker

adm@fcgworld.co.uk

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