{"id":4044,"date":"2017-11-02T00:00:00","date_gmt":"2017-11-02T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100210-gbp-usd-us-fed-change\/"},"modified":"2017-11-02T00:00:00","modified_gmt":"2017-11-02T04:00:00","slug":"100210-gbp-usd-us-fed-change","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100210-gbp-usd-us-fed-change\/","title":{"rendered":"GBP\/USD: Will the BoE Quarterly Inflation Report Allude to More Intere"},"content":{"rendered":"<p>As the two-day central bank bonanza kicked off on Wednesday, the pound ended the session lower versus the dollar at US$1.3250. This is more or less the same level where the pound was trading versus the dollar 1 month ago.<\/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>\n<p> 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. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the US dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the US dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The pound initially climbed on Wednesday as investors were encouraged by strong UK manufacturing data for October. The UK manufacturing sector continues to show robust growth despite the uncertainty stemming from Brexit. Continued growth in manufacturing has cemented investors\u2019 beliefs that the Bank of England (BoE) will raise interest rates today. Investors are almost certain that the BoE will increase rates from 0.25% to 0.5%. Investors are placing the odds at 91%. Usually, when a central bank increases interest rates, the value of the currency increases.<\/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>However, given that the market is almost completely certain of the hike happening, there\u2019s a chance that the pound may not rally on the action.<\/p>\n<p>Along with the interest rate decision, the central bank will also release the quarterly UK inflation report. High levels of inflation often result in a central bank raising interest rates. Should the BoE forecast that the current high level of inflation will continue for an extended period of time, the pound could push higher. This is because investors will assume that additional interest rate hikes will be on the cards for next year.<\/p>\n<h2><a href=\"#us-federal-reserve-keeps-rates-steady\" name=\"us-federal-reserve-keeps-rates-steady\"><\/a>US Federal Reserve Keeps Rates Steady<\/h2>\n<p>The dollar was in demand in the previous session as the Fed shied away from any surprises. Just as investors and analysts had expected, the US Federal Reserve kept interest rates on hold at 1%. The central bank continued to steer market expectations towards an interest rate hike in December from 1% to 1.25%. The Fed also continued to point to a gradual increase for rates ahead, as Fed Chair Janet Yellen drew on the strong economy but sluggish inflation.<\/p>\n<p>December will be Janet Yellen\u2019s last meeting and while a rate hike is expected, the direction of monetary policy next year remains unclear. Today, President Trump is due to announce the candidate who will replace Yellen. Only once investors know who the candidate is, will potential policy direction for next year become less of a mystery.<\/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>As the two-day central bank bonanza kicked off on Wednesday, the pound ended the session lower versus the dollar at US$1.3250. This is more or less the same level where the pound was trading versus the dollar 1 month ago. What do these figures mean? When measuring the value of a pair of currencies, one [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4045,"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-4044","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>GBP\/USD: Will the BoE Quarterly Inflation Report Allude to More Intere - 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\/100210-gbp-usd-us-fed-change\/\" \/>\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\\\/100210-gbp-usd-us-fed-change\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100210-gbp-usd-us-fed-change\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Will the BoE Quarterly Inflation Report Allude to More Intere\",\"datePublished\":\"2017-11-02T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100210-gbp-usd-us-fed-change\\\/\"},\"wordCount\":744,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100210-gbp-usd-us-fed-change\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100210-gbp-usd-us-fed-change.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\\\/100210-gbp-usd-us-fed-change\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100210-gbp-usd-us-fed-change\\\/\",\"name\":\"GBP\\\/USD: Will the BoE Quarterly Inflation Report Allude to More Intere - 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