US Dollar Rate Best Since 2009

The US Dollar has weakened overnight, giving us the best rates for sending money to the USA since July 2009.

The Federal Reserve cut its growth forecast for 2014 yesterday by 0.7%, blaming colder winter weather, and scaled back its stimulus programme at the same time. The Fed also said that interest rates would remain near zero “for a considerable time” – in contrast to the UK where interest rates are likely to start rising by the end of this year.

The announcements hit the US Dollar, making it cheaper across the board and pushing exchange rates for those of you buying US Dollars, or pegged currencies such as the UAE Dirham, up to 5 year highs.

The Pound had earlier fallen back slightly against most currencies after the Bank of England minutes showed no change in UK monetary policy, with the Euro becoming slightly more expensive although still at excellent levels compared to recent months. Tuesday’s falling inflation figures have also added to doubts on interest rate rises, showing how fickle the Pound can be, as markets try to judge if and when we will see that interest rate rise.

Today we have UK retail sales at 9.30am which could influence the Pound, which is the last main data of the week in the UK.