US Growth better than expected

After a turbulent start to the week, the dust is gradually settling in the currency markets with key data taking focus once again. The USD has gradually been fighting back from its lows on Monday as investors continue to look for a safe haven investment in these uncertain times, whilst also speculating on the possibility of a rate hike in September. The main announcements yesterday were all critical for the dollar with their latest growth figures as well as jobless claims and home sales. Results were a bit of a mix bag with jobless claims slightly shy of expectations, and pending home sales also missing the mark. The main focus was however on the growth figure, expected to be up to 3.2% from 2.3%, and actual results posted an impressive 3.7% growth in the last year. Many analysts have been talking down the possibility of a rate hike next month, however these figures will go some way to contradicting this view.

The US Dollar has now gained over 4 cents against the pound and Euro is the last 3 days, and crucially against the pound we have now seen a number of technical signals for a change of trend that is likely to see GBP/USD return to the lows seen earlier this year during the coming weeks and months.

Today is all about growth for the UK with our latest GDP figures where no change of 2.6% in expected. The pound is very fragile currently so any shortfall on this could well see a further decline in exchange rates. With much downside risk at the moment, Forward contract are becoming increasingly popular with our clients, to secure you rate for up to one year in advance, contact your broker today for live rates.