Exchange Rates move on FED news
Last night at 6pm, the US Federal Reserve (FED) announced its decision to hold interest rates. However as is often the case in the currency markets, the devil is in the detail. They tool quite a Hawkish tone, and removed a key sentence in their statement that effectively hints that in December rates would be on the rise. This coupled with the expectation that the European Central Bank (ECB) will increase their stimulus measures in December has had quite an effect on Exchange rates.
As you can clearly see from the chart, as soon as the announcement was made at 6pm, the Euro weakened significantly and became cheaper to purchase, pushing mid-market rates up to €1.40. The market has already this morning dropped back away by nearly 1 cent already this morning however to just above €1.39. Given we have now see the GBP/EUR rate climb by 6 cents in the last few weeks, I think this will be the peak in the short term. Those needing to buy Euros may want to consider locking in a rate while rates are the best they have been since mid-August.
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There was an inverse reaction to GBP/USD rates, as the Dollar strengthened and became more expensive, causing rates to drop back away at 6pm last night. I think the USD is only going to go from strength to strength, so would not be surprised to see rates dip below $1.50 before long.
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Labels: Currency, ECB, Euros, FED, GBP/EUR, Get the Best Exchange Rates, pound sterling forecast, Why has Pound gone up against Euro