The US Dollar is under some pressure after criticisms from President Trump. Specifically, he was not happy about recent rate rises.
This cast doubts about the Fed’s plan to execute its hawkish monetary policy. Another factor to consider is that many emerging markets are under severe economic stress (e.g. Turkey). Will this pause the Fed’s rate plan?
Against GBP, the pair has been moving in favour of the US Dollar persistently. The downtrend broke through 1.300 to reach a low of 1.260-1.270. If the US short-term rate begins to level, this may reduce some bearish bets on the FX pair. But the elephant in the room – Brexit – remains a big concern. Almost no progress was made over the past few weeks. Note too that even a 25bps rate hike by the Bank of England fails to cheer Sterling. So even if the US Dollar corrects, the upside will be quite limited given a few technical ceilings above (1.300, 1.320).
Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.