2016-11-18 11:21:56

Yesterday's positive UK data supported the Pound and the pair GBP/USD. It became known that retail sales increased by 1.9% in October against the forecast of +0.4% on the monthly basis and by 7.4% against the forecast of +5.3% on the annual basis. Yesterday, the pair GBP/USD had grown above 1.2500. However, later the pair started to due to significant rise in the USD in the currency market.

The head of the US Fed Janet Yellen has said yesterday that the rise of the short-term interest rates in the near future is well-grounded. In response to her statement, the USD went up in the currency market. The index WSJ, which shows the positions of the USD against a basket of 16 currencies, went up by 0.7% to 91.21, which is the highest level since February.

On Thursday the USD has been growing for the ninth consecutive session. Market participants are focused on the prospects of the US interest rates. Most investors expect that the key interest rate will be raised next month. According to futures on the Fed rates, probability of the monetary policy tightening in December is 91%. And this is a very strong factor triggering the rise in the USD in the market.

Expectations that the US President Donald Trump will increase budget expenditures and reduce taxes, in order to spur economic growth in the country also caused the rise in the USD. It is likely that the pair GBP/USD will continue to decline due to significant rise in the USD and uncertainty about prospects for the UK economy after Brexit.GBP/USD: USD is going up in the currency market. Fundamental analysis for 18/11/2016