The US dollar continued to weaken on Monday, following a difficult spell last week. Monday saw the US currency break the 1.52 level against sterling, the first time since the start of March. This can be attributed to a weak Flash Services Purchasing Managers’ Index showing a drop in growth, as well as investors leaving the US dollar due to the recent slowdown in the economy. This has caused some investors to forecast that the next interest rate rise will be towards the end of the year rather than June.
We also have the next meeting of the Federal Reserve this week and although no detailed and updated economic forecast will be released, markets will be keen to get its perspective of whether or not the recent weakness is just a blip or a longer term trend.
Today will see the release of consumer confidence in the US, which is expecting to show a slight increase. However, with recent figures falling short of expectations, we could see yet another poor figure for the US dollar.