Weak US GDP seen as ‘anomalies’
Last night’s FOMC statement might not have given the markets all the answers they were looking for – but it did suggest that interest rate rises in 2015 will still be on the cards. The general sentiment seemed to suggest that although the FOMC recognised the disappointing levels seen in the latest GDP figures – along with the general cooling of others – they felt that these were more anomalies rather than shifts in trends. The fact remains that the US economic first-quarter had been adversely affected by both port closures and particularly awful weather conditions.
Earlier in the week a Bloomberg survey suggested that the general institutional view was that the FOMC would not raise rates until September and last night’s statement has done little to change that thinking. The short-term outlook could well see further upside to GBP/USD while this rebalancing of the dollar’s strength continues. However, further selling pressure is surely not too far away – especially as we approach the 200-day moving average.