The Chairlady of the US Federal Reserve Janet Yellen will this afternoon deliver her latest thoughts on the US economy. There has been optimism that the third forecast interest rate hike in the US will go ahead in December and Yellen looks set to deliver her verdict. If there was to be an interest rate hike confirmed in the US then the GBP/USD could comfortably move back into the low 1.30s.
Most of the headline news in US in the last week has been anything but economic. There has been a focus around the response of American football players towards the US national anthem and more importantly the tensions between North Korea. The dictator state yesterday suggested that the US had declared war on North Korea and that they would shoot down American planes even if they weren’t in North Korean airspace.
Despite much of the threats between the US and North Korea being considered trivial, there now appears to be a risk of accidental attacks. The US are likely to keep flying missions as a show of strength and this may eventually push Kim Jong-Un to react.
Should there be an actual conflict this is likely to affect the US Dollar, it could cause a strengthening of the as it’s considered a “safe haven” currency. Due to there being so many influencers of the currency, including the price of oil and gold it’s unlikely that the value would plummet. However should there be an attack then we could see the GBP/USD fall towards the low 1.30s. Whilst the GBP/USD rate has been on the end of positive movement for the Pound it looks like that could well be close to coming to an end for now.