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US Dollar Weak on Federal Reserve Uncertainty

Yesterday’s high: $1.3377

Yesterday’s low: $1.3312

GBP/USD Fluctuates as Investors Anticipate Brexit Developments

Some analysts reckon the Federal Reserve may not hike US interest rates for a while after December, which weighed on US Dollar demand on Monday.

While markets widely agree that the Fed is preparing to hike US interest rates in December, marking the third rate hike of 2017, an uncertain inflation outlook and an unclear picture of US fiscal policy plans have clouded the Fed’s 2018 outlook.

US tax reform plans have been on the cards for most of the year but investors are still uncertain how much of the plans will pass through Congress.

The Pound, on the other hand, edged higher for most of Monday as investors anticipated fresh developments in the Brexit process.

USD Outlook: Brexit Developments in Focus

The Pound to US Dollar exchange rate is likely to be influenced by any changes in the Brexit outlook over the coming days.

If UK or EU negotiators soften their positions on the Northern Ireland border or show concessions in an effort to accelerate the pace of negotiations, the Pound will see stronger demand. Sterling could also be influenced by UK data later in the week.

As for the US Dollar, it could be influenced by wholesale inventories data on Tuesday, but investors are likely to wait for key US growth data and personal consumption data later in the week before making big moves on the currency. Tax reform news could also influence the ‘Greenback’.

Key Events

28th November

07:00 UK Nationwide Housing Prices

13:30 US Wholesale Inventories

29th November

13:30 US Growth Rate

15:00 Fed Yellen Speech

30th November

UK Consumer Confidence

13:30 US Jobless Claims

13:30 US Personal Income and Spending

14:45 US Chicago PMI

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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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