Yesterday we saw GBPUSD fall below 1.37 hitting a 4-week low as the dollar strengthened across the board. Greenback gained after the Federal Reserve’s meeting minutes from its late July decision have shown that there is growing support for tapering the bank’s bond-buying scheme this year. The minutes revealed that, while no firm decisions were made, most members felt it could be appropriate to start reducing the pace of asset purchases this year. This means that as the US economy recovers from the pandemic, America’s central bank will start pulling back some of the massive economic stimulus it has introduced – earlier than expected. The expectations around reducing quantitative easing in the US accompanying concerns the bank of England may have to delay hiking interest rates due to falling inflation sent the currency pair in one direction.
In more dollar positive news the number of Americans applying for jobless benefits for the first time has fallen to the lowest level during the pandemic. The US Labor Department said 348,000 Americans filed for first-time jobless benefits in the week to 14 August, down 29,000 from the prior week.
Have a great day.
William Jones, Senior Relationship Manager.
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