This week it will become clearer as to whether the US Fed will raise interest rates again in December, as a whole barrage of data is released. Tomorrow however it will be the go of the Federal Reserve committee members speaking. Considering some of the comments that have been made before by the members they could essentially be confirming the interest rate hike in December.
Following the speeches on Wednesday the Gross Domestic Product (GDP) figures for quarter three will be released and it expected to show an improvement from the previous year of 0.2%. Furthermore, the personal consumption expenditures will be released which is expected to remain the same as 1.3% compared to the last quarter. Both of these releases provide an indication of consumer confidence as high readings suggest people are going out and spending money. Adding to both these readings, on Thursday personal spending will also be released for October which is expected to fall a little.
Should there be positive readings from these data releases then there could easily be a boost for the US Dollar. Good data will hold the key as to whether or not there will be a final US interest rate hike in 2017 or if the Fed will wait till next year.
Janet Yellen’s Final Meetings
The term of the current Chairlady of the Federal Reserve, Janet Yellen, will be coming to a close in the next few months. Current Governor Jerome Powell has been nominated by President Trump to become the next Chairman of the Federal Reserve. This week Powell will provide a testimony to Congress as to how he will run the Federal Reserve, which markets will be watching closely.
There have been several suggestions that the Federal Reserve will raise rates several times next year and should Powell confirm this as his plan I would expect the US Dollar to rally. This week could help people looking to sell US Dollars, as I wouldn’t be surprised if the GBP/USD exchange rate closed nearer 1.30 than 1.35.