Sterling loses half a cent against the dollar.

Good afternoon,

GBP/USD exchange rates dipped by around half a cent during trading today as the Bank of England minutes coupled with yesterdays poor inflation figures did little to support the pound. Sterling/dollar dropped from a high of $1.6990 to $1.6933 on the back of the minutes being released and we could be set for further loses if there is positive news from the U.S. Federal Reserve later this evening.

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Today's minutes from the Bank of England's monetary meeting which was held at the start of the month did not help the pound as much as investors and market players were hoping. Following last weeks speech from BoE governor Mark Carney that the central bank were prepared to raise interest rates sooner than later, speculation had been mounting that the minutes would back up his comments.

This was not the case though and the minutes showed there had been no change in stance from the monetary committee, meaning the vote has remained the same as the previous month. This is not to say a rate rise will not happen before the end of year, we need to remember the meeting took place before Mr Carneys speech last week, so next months meeting may shed some extra light.

Fed announcement this evening.

At 7.30pm GMT we will hear from Janet Yellen and the U.S, Federal Reserve. It is being widely tipped that the FED will announce another round of tapering to their on-going stimulus programme. We could see the programme reduced from $45 billion down to $35 billion and if that happens we could see the dollar start to strengthen. It is also being reported that Mrs Yellen will use the announcement as an opportunity to talk about a potential rise to interest rates in the States. If true, it could be a very positive evening for the dollar as it looks to wipe out the gains Sterling made last week.

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