In a yo-yo action the Greenback has moved back above 1.30 against Sterling this morning after dropping into the 1.28 level yesterday afternoon from previous highs earlier this week the GBP/USD rate had moved up to 1.31 which was a nine month high for the rate.
Moving forward there is now uncertainty surrounding the US Dollar as well as the known Sterling problems.
Donald Trump is facing further issues with regards to the investigation into his connections with Russia. Every time the story looks as though it is about to go away, a further piece of information or allegation appears.
Trump’s administration appear to have a lost a lot support and their first major bill to replace Obamacare has not got enough votes to move through the Senate. Whilst this doesn’t have much of a direct impact on exchange rates, dwindling support for President Trump does raise questions of uncertainty.
Next Week for the US Dollar
We have seen movement of nearly 2% either way in a week of major swings, and despite summer proving a time to relax, that’s unlikely to be the case for the currency markets.
Next week the Federal Reserve will have their latest interest rate decision followed by a statement from FED Chairlady Janet Yellen. There is so much debate about interest rate decisions across the globe, any indication into future changes will have a significant effect on the GBP/USD exchange rate.
There will also be Gross Domestic Product (GDP) data for the US, providing the latest insight into the performance of the US economy. Once again if there is positive data then there will certainly be hope for future interest rate hikes. However with the uncertainty currently surrounding the US political scene, bad data may just start to make things worse.
Next week we may see the GBP/USD begin to test the 1.31 mark again and any movement above that level will mean you’re buying US Dollars with Sterling at the best time for nearly a year.