GBP/USD on the rise

The GBP/USD cross has risen over a cent since yesterday afternoon, with the currency pair hitting a high of $1.2294 this morning as you can see from the graph below. In today's post I will look at the events have impacted the value of the currency pair.

GBP/USD graph

Will the Federal Reserve raise interest rates again?

Investors have been asking this very question since the Fed raised interest rates last December. Despite the U.S central bank initially stating they would raise rates four times during 2016, ten months have passed and we are still waiting for that second hike.

The dollar has given up some ground over the past twenty-four hours as investors ponder the Fed’s near-term rate view. Although a rate hike in December is still on the cards, it is still far from a done deal with Fed Vice Chairman Fischer stating yesterday it was 'not that simple' for the Fed to hike rates.

 

UK inflation figure helps give the pound a boost.

 

This morning has seen the UK inflation reading rise to 1% and has given the pound a fraction of support. The inflation reading beat expectations and the current level is the highest rate since November 2014 and is now half way to the Bank of England's target level of 2%.

 

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