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USD: US dollar bowing to election pressure

By Ricky Bean November 2nd, 2016

The US dollar has struggled over the past few days as political uncertainty continues to weigh on the currency. Against the euro, the US dollar hit its lowest level in more than two weeks as the FBI inquiry into Hillary Clinton’s emails threw a curveball at the presidential race.

Last week’s better-than-expected growth figures provided further impetus on a possible US interest rate hike in the near future. Tonight’s Federal Open Market Committee (FOMC) meeting is not expected to yield a change in interest rates, but the statement that follows will be key for investors as they look for clues as to when the next hike may occur.

There have been a number of articles released in the past day or two, predicting the US dollar could strengthen to 5% against sterling when the UK invokes article 50 next year; however, the short-term focus is very much on the presidential race next week and when the US is likely to raise rates.