{"id":3748,"date":"2017-06-20T00:00:00","date_gmt":"2017-06-20T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100118-gbp-usd-ny-fed-reserve\/"},"modified":"2017-06-20T00:00:00","modified_gmt":"2017-06-20T04:00:00","slug":"100118-gbp-usd-ny-fed-reserve","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100118-gbp-usd-ny-fed-reserve\/","title":{"rendered":"Dollar Boosted Against Pound by Federal Reserve Member Comments"},"content":{"rendered":"<p>With economic data in short supply this week, fundamental events are taking a central role. Bank of England (BoE) Governor, Mark Carney, is due to give his Mansion House Address this morning. Whilst U.S. Federal Reserve speakers are filling up the calendar over in the United States.<\/p>\n<p>The pound U.S. dollar exchange rate sold off sharply in the previous session after the head of the New York Federal Reserve, Bill Dudely gave an upbeat address. The U.S. dollar strengthened following his comments, pushing the exchange rate down to $1.2723, its lowest level for the pound since last Thursday. Despite the drop in the rate, it\u2019s still hovering around levels not seen since the end of last year.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute. For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the U.S. dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the U.S. dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>BoE Governor Mark Carney will speak this morning at 08:30. The address was scheduled for last week, but was delayed following the fire at Grenfell Tower. In the past, Carney has used his Mansion House speech to make frank comments on the health of the UK economy, occasionally including a message on policy. This time he\u2019s expected, among other points, to address the shock vote split at the BoE monetary policy meeting, where 5 members voted to keep rates on hold, but 3 surprised the market and voted to raise rates.<\/p>\n<p>The market will be listening very closely to see if Carney gives away any clues as to whether there\u2019s a possibility that any of the 5 members could switch alliances and vote to hike. Any clues to this end would increase interest rate expectations and could push the pound higher.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The dollar is back in demand following optimistic comments from influential head of the New York Federal Reserve, Bill Dudely. Mr Dudely said he was happy with the interest rate raises so far by the Federal Reserve. Furthermore, he predicts wage growth will pick up as the U.S. moves closer to full employment. Mr Dudley said he believes that continued progress in the labour market will push earnings upwards at a faster rate. This, in turn, would boost inflation closer towards the Fed\u2019s 2% inflation target.<\/p>\n<p>Some investors are concerned that the Fed will not raise rates again this year due to low inflation and weak data. Dudely, on the other hand, is concerned of an inflation overshoot. His comments have helped lift interest rate expectations and boost the dollar. Eyes will now turn to Federal Reserve Vice Chair Fisher and Fed official Kaplan, both due to speak later today. More positive rhetoric could continue to boost the buck.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With economic data in short supply this week, fundamental events are taking a central role. Bank of England (BoE) Governor, Mark Carney, is due to give his Mansion House Address this morning. Whilst U.S. Federal Reserve speakers are filling up the calendar over in the United States. The pound U.S. dollar exchange rate sold off [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3749,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":{"0":"post-3748","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-gbp","10":"tag-usd"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Dollar Boosted Against Pound by Federal Reserve Member Comments - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100118-gbp-usd-ny-fed-reserve\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Dollar Boosted Against Pound by Federal Reserve Member Comments\",\"datePublished\":\"2017-06-20T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/\"},\"wordCount\":801,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100118-gbp-usd-ny-fed-reserve.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100118-gbp-usd-ny-fed-reserve\\\/\",\"name\":\"Dollar Boosted Against Pound by Federal Reserve Member Comments - 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