FOMC Minutes Impact Pound US Dollar Exchange Rates

Modified: Thursday, 13 October 2016 14:05 BST - Written by Minesh Chaudhari

STORY LINK FOMC Minutes Impact Pound US Dollar Exchange Rates

Pound Sterling (GBP) Exchange Rates Remain Unsettled after Commons ‘Brexit’ Debate Turned Sour

The Pound was unable to make any headway against the US Dollar at the start of trading today, but has since climbed against its rival as trading has continued.

The initial damage was done to the Pound by the aftermath of a ‘Brexit’ debate in the House of Commons, where MPs railed at the Government for a lack of transparency.

In particular, the question remained unanswered over whether single market access was being sought by the Government, or whether MPs would be able to receive updates on how talks were going.

Pound Unlikely to Rally This Week, Major Inflation and Jobs Data due Next Week

The Pound is only left to be influenced this week by tomorrow morning’s August construction output result on the year, which is forecast to remain negative but move closer to a positive range.

Next week, Tuesday will bring high-impact UK inflation rate results for September, while Wednesday will see September’s claimant count change, August unemployment rate and average earnings in August announced.

UK inflation is forecast to rise on the year but remain static on the month, while claims have a drop expected in September. Unemployment is damagingly predicted to rise from 4.9% to 5%, while average earnings are expected to dip slightly, both with and without bonuses.

US Dollar Gains Trimmed after Latest Fed Minutes Provoke Uncertainties

While the US Dollar started off trading in a strong position today, it has since seen a number of these advances turn negative, mainly in the wake of the Fed’s minutes for its September interest rate decision.

That resulted in another freeze, though according to the minutes, it was a ‘close call’ between voting for a rate freeze and a rate hike last month.

Given that Fed Chair Janet Yellen was identified as the reason behind the deciding factor behind the last rate freeze, it seems that concerns remain that dovishness from the top could see the Fed hold off a rate hike for 2016 in its entirety.

Pound US Dollar (GBP USD) to be Shifted by Fed Speeches and Sales Stats This Week

The next events likely to shift the US Dollar will come this afternoon, when Fed official Patrick Harker gives remarks. Additionally, further Fed input will come over Friday, starting with words from Fed official Eric Rosengren and closing with an expected speech from Janet Yellen.

Elsewhere, the US Dollar could also see movement when the September retail sales figures come out on Friday afternoon; a rise is forecast on both the month and the year.

Closing off tomorrow’s US economic news will be the University of Michigan preliminary confidence sentiment figure for October, which is set to rise from 91.2 points to 91.8.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Dollar Pound Forecasts Pound Sterli Forecasts