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GBP/USD & Central Bank Watch: Fed Lockhart?s Comments Send Pound Dollar Rate Lower

March 26, 2015 - Written by John Cameron

Central Bank Comments Help US Dollar to Pound Exchange Rate



This afternoon’s session has been marked by significant comments from a leading figure at the world’s premier central bank. The upshot has seen the euro US Dollar exchange rate test lower, lading some analysts to suggest that the recent renaissance from the shared currency may now be running out of steam as the Buck pushes forward once more.

Exchange Rates Today:

  • The Pound to US Dollar exchange rate today is converting -0.21 per cent lower at 1.48460 GBP/USD.
  • The Euro to US Dollar exchange rate converts -0.37 per cent lower at 1 EUR is 1.09232 USD.
  • The Swiss Franc to US Dollar conversion rate is -0.06 pct lower at 1.04053 CHF/USD.
  • The Canadian Dollar to US Dollar rate is +0.49 pct higher at 0.80217 CAD/USD.


Lockhart Forecasts Liftoff



Dennis Lockhart, the 14th President of the Federal Reserve Bank of Atlanta, triggered a flurry of activity for the Buck when he suggested during a set-piece speech a short time ago that so-called ‘liftoff’, which would see America’s central bank increase its interest rate for the first time since the 2008 financial crisis, will be coming relatively soon. The man from Georgia suggested that the tightening of policy would be coming in June, July or September, which is significantly sooner than futures markets are currently pricing-in; their best-guess at this stage is for a rate hike in December.

Winter Weather and Dollar Strength Delay Fed Deciison



Lockhart went on to blame several exogenous factors for the fact that the Fed will not be raising its key interest rate sooner. These ranged from the unusually inclement weather in the Northwestern states this winter to the negative effect which a rapidly strengthening Dollar had wrought on the domestic manufacturing base during recent months. Lockhart’s assertion that there is ‘only a small chance’ that the Fed will have to backtrack and consider a fresh loosening of policy revealed his thinly-veiled concerns that the continued low level of oil prices might derail his forecasts.

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Pound to Dollar Exchange Rate Hits 1.4805



Meanwhile, on the data front, a marginally stronger than anticipated set of weekly Initial Jobless Claims data from the States was largely cancelled out by a disappointing showing from this afternoon’s weekly US Continuing Claims numbers. The fallout from Lockhart’s comments and from these statistics saw the Pound Sterling US Dollar exchange rate track downwards to as low as 1.4805 during this afternoon’s session and analysts forecast that this renewed shift lower for the pair may develop more momentum as investors shift their expectations regarding the timing of ‘Liftoff’ from the Fed’.
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