The pound stabilised on Tuesday in the wake of some hawkish comments from a Bank of England (BoE) policymaker.
The ‘greenback’ then collapsed following the Fed decision. Although the US central bank raised rates by a whopping 75 basis points, this was largely priced in by markets. In addition, Fed Chair Jerome Powell suggested that the pace of tightening could slow in the coming months, leading markets to pare back future rate rise bets.
A surprise contraction in America’s second-quarter GDP figures put further pressure on USD, with the report revealing that the US is in a technical recession.
However, the US dollar managed to regain some ground on Friday thanks to an above-forecast PCE price index.
USD exchange rates continued their downtrend at the start of this week, with a risk-on market mood sapping demand for the safe-haven currency.
The US ISM PMIs this week could cause some movement. With the US now in a technical recession, the ‘greenback’ may be even more sensitive to the forecast slowdowns in manufacturing and service sector activity.
The latest employment data will also face heightened scrutiny. Will ongoing strength in the US labour market help USD recover?
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)