US Dollar on the march as stimulus ends

The Federal Reserve last night used its monetary policy statement to officially announce the end of its stimulus programme, the equivalent of Quantitative Easing in the UK, as the American economic recovery gathers pace ahead of Europe.

The announcement, although expected, strengthened the US Dollar, with rates for sending money to the USA falling over a cent yesterday evening. Analysts expect this trend to continue as the US economy appears to be weathering the current storm better than the Eurozone or UK, so the Dollar could continue to gain in value over the coming weeks.

Federal Reserve chairman Janet Yellen confirmed however that US interest rates would remain low for “a considerable time”, in line with the Eurozone and the UK.

Closer to home, there was very little news out and the Pound held steady, trading in a very narrow range against the Euro.

Swedish Krona falls to 4 year low

Any of you sending money to Sweden will be pleased that the country’s central bank surprised markets on Tuesday by cutting interest rates to zero, causing weakness in the Scandinavian currency. The Riksbank also said that interest rates would not rise until mid-2016.

The Krona chart below shows the rate moving past its 2010 peak this week.

Today we have German unemployment and inflation, and US GDP released, so we could be seeing some movement in exchange rates, despite the lack of UK data this week.