Could we see hints of a US rate hike today

26 August, 2016

Grace Rae

Today is a big day for the market following a fairly positive week for the Pound. With the mornings trade focusing on UK GDP and total business investment figures due this morning at 9:30 and the afternoon dominated by US GDP, goods trade balance and personal consumption expenditure, and GDP annualized all out at 13:30, then the focus turns to the Jackson Hole Symposium.

Yesterday proved to be a quiet day on the currency markets and throughout the day we saw that sentiment drove the market movements ahead of the key US speeches today. GBP-EUR closed 50 pips below where it started and GBP-USD losing 60 pips throughout the trading day. Janet Yellen the Chair of the Federal Reserve is due speak at 3pm. With investors watching closely for any hints of an interest rate hike, depending on her comments we could well see a fairly volatile afternoon on the market. Remembering that a rate hike strengthens a currency and hints of a hike could see the Dollar strengthen. So the levels we have seen recently thanks to a positive recent Pound may be quickly diminished.

If you still have a Dollar or Euro requirement due it may well be worth considering fixing your rate sooner rather than later as analyst are still expecting the pound to weaken further as the year continues. Don’t get stung by this downward trending market and talk to one of our the team today about how you can fix your rate for up to a year ahead with our forward contracts or indeed consider our limit and stop loss contracts.

Speak to one of the team today if you have any questions or indeed if you want to secure your currency requirement.