The pound fell against the rest of its peers on Wednesday as some softer-than-expected inflation data prompted traders to rethink their expectations of an August rate hike.
The US dollar plummeted at the start of last week’s session as USD investors were unsettled by escalating geopolitical tensions regarding Syria.
US President Donald Trump promised a ‘forceful response’ to an alleged chemical weapons attack in Syria, which led to the US butting heads with Russia and markets fearing what impact possible reprisals could have on their respective economies.
The US dollar found some respite on Wednesday however with the release of the latest US CPI figures.
The data showed that US inflation jumped from 2.2% to 2.4% in March, leading to suggestions that the door could still be open for the Federal Reserve to raise interest rates up to three more times this year, helping to buoy USD.
This was not enough to erase concerns over Syria however, and saw the US dollar face further pressure in the second half of the week.
Looking ahead the US dollar may open this week on a stronger footing should data show that retail sales rallied in March, as forecast.
There will also be a number of speeches by Fed policymakers dotted throughout the coming week, with USD likely to strengthen if they appear in favour of the Fed accelerating monetary tightening this year.
Joining the corporate trading desk in 2007, Phil now overseas 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 FSA approval and has completed the Certificate in International Treasury Management (CertiTM)