Wednesday, 22 February 2017

GBP/USD exchange rate falls ahead of Fed meeting minutes

Good afternoon,

After nudging over the $1.25 mark in the early hours of this morning, the GBP/USD has fallen around half a per cent to leave the currency pair trading back in the mid $1.24's.


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The dollar has been gaining momentum over the course of today as investors wait for this evenings release of the latest Federal Reserve meeting minutes, which should provide us with some clues over the pace of future interest rates, and the because of the growing political uncertainty in France.

GBP/USD graph

Several Fed officials have recently stated they could open to raising interest rates at the banks next meeting, which is set to take place on the 14th and 15th March.

Cleveland Fed President Loretta Mester and Philadelphia Fed President Patrick Harker have both hinted at a potential rate increase next month, with Mester saying she would be comfortable hiking rates as long as the U.S. economy continued on its current path.

If tonight's meeting minutes back up the recent hawkish comments we could see the dollar gain even more ground against its counterparts.

As I mentioned above the U.S. dollar has also been benefitting from the political unrest in France.
The latest opinion polls have shown that anti-EU candidate Marnie Le Pen has moved ahead of her rivals Francois Fillion and Emmanuel Macron in the build up to the first round of elections.

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