020 7898 0500There was little movement in the dollar on Friday, with investors still deciphering Wednesday’s Federal Reserve decision to unwind their balance sheet. We also heard that plans are still on to raise interest rates but it seems investors are erring on the side of caution. Nevertheless, if the Fed does follow through with the proposed changes to monetary policy, we’ll probably see some much needed support for the dollar, which has weakened 5% against the pound so far this month.
Looking to the week ahead, it’s mainly focused on the eurozone, with a slight consumer theme to the US schedule. We’ll be hearing personal consumption for August, which is forecast to edge higher. Consumer confidence is likely to remain strong as well. Forecasts also suggest inflation is likely to come in at 1.4% in August, below the Fed’s target of 2%. Regardless, they have announced this is unlikely to cause concern and price pressures, so we don’t expect this to impact the rate decision.
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