Fed Chairlady Janet Yellen and voting member James Bullard will both speak this evening in what could trigger a boost for the US Dollar to close the day.
The USD has been strengthening over the last week especially against Sterling and this looks like it could be set to continue. There is almost complete confidence that the US Federal Reserve will raise interest rates before the end of the year and some members of the voting committee are even talking of several rate hikes next year also.
In turn, with the uncertainty surrounding Sterling, the GBP/USD rate could well start to move back to the 1.30 level, if not below before the end of the year.
Optimistic PMI Data
Purchasing Managers Index data released today demonstrated that executives across the country were confident of the next few months. Specifically, companies outside of manufacturing were incredibly positive with the reading coming in significantly higher than the markets had expected.
Tomorrow four more members of the interest rate voting committee will speak and then on Friday we have the biggest release of the week, Non-farm payroll data.
The Non-farm Payrolls release indicates the number of new jobs made in the previous month. There is expected to be a significant drop from previous months, however over the last few months forecasts have been massively over exaggerated. On Friday there will be volatility correlating to whichever way the non-farm release comes out. We are also expecting unemployment data, which could well be positive considering the jobs market has been strong in the last few months.
The US Dollar is likely to make gains at the end of week with so many speakers.
The US Federal Reserve is on a hawkish cycle at the moment talking up hype of interest rate hikes in the short term. Therefore if you’re looking to purchase US Dollars then it might be worth doing so sooner rather than later.