The dollar weakened yesterday but is strong against the pound and euro this morning, ahead of the Federal Reserve’s two day monetary policy meeting, which starts today. Investors are expecting a 25 basis point cut, however some believe that this will be the last cut in a while. The attack on a Saudi Arabian oil base over the weekend raised the risk on inflation, and so some even believe that no action will be taken by the Fed today.
US industrial production data yesterday showed that factory output had increased much more than expected in August, rising by 0.6%. This beat expectations of a 0.2% increase. Manufacturing in particular rose by 0.5%, above a 0.2% predication. This is the last snapshot of US economic growth that the Fed will receive before making their decision on interest rates.
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