After gaining around 0.7% during yesterday's session, GBP/USD exchange rates fell over 1% following the release of the U.S. Federal Reserve meeting minutes.
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The latest meeting minutes showed officials were split about when to raise the benchmark rate in the States, with a number of the FED's members looking to raise interest rates as early as June.
The positive tone led to a surge in investor confidence for the dollar and at the time of writing the GBP/USD cross had slipped back to $1.4765 as the graph below shows.
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Will the dollar continue to strengthen?
Quite possibly, with a rate hike now firmly on the cards and the troubled Greeks still dominating the headlines there is every chance the dollar's value will continue to increase as investors seek the safety of the dollar and a better financial return.
Let's not forget the UK General Election is now only weeks away and is likely to weigh heavily on all sterling crosses.
With that in mind, I wouldn't be surprised to see GBP/USD exchange rates fall back under the five year low of $1.4675 we witnessed on the 18th March.
However, the dollar might not have everything its own way as there are still concerns over the current level of inflation in the U.S.
Some Federal Reserve officials are suggesting the current market conditions do not warrant a rate hike and the central bank should wait until early 2016 before increasing rates.
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