USA intrest rates rise

[MacDuck]

See on the news that the USA have raised their intrest rate by 1/4% and more raises are predicted in the coming months.
As I'm not going until next year, just wondering what effect this will have on the dollar and whether it's worth changing a few of my hard earned just now.
Any financial whizz kids on?

 

[Celestine]

bump!

 

[SimonV]

There's no real sign of any change so far. There has been a 1 cent fall (from 1.82 to 1.81) on the spot rate since the rate rise, but that's all. American economic data was still a bit weak today (according to the FT!), and that could well mean no real change in the exchange rate just yet. Having said that, I would say if you can afford to buy your $$ currency now, I would do so, as I can't see it going up at the moment.

 

[igk]

I think the 0.25% rise by the Fed was well predicted so as such wasn't going to have much effect on the exchange rate. Currencies tend to move when (among other things) the perception changes as to the direction and speed of interest rate changes in both currencies. One reason the pound went up so far last year was it was expected GBP rates would go up (they did) and USD rates would stay low. Now it's widely expected that USD rates will go up, but at a steady rate, so that will not likely have much effect.
One other thing to bear in mind is you won't get any interest on USD cash once it's changed but you can still earn interest on the GBP if you wait. If I hadn't already got dollars myself at 1.80 I'd be getting tempted around 1.85, IMHO.
A good site to check interbank rates is http://www.oanda.com/rtrates

 

[MacDuck]

Thanks for the info igk. Looks like it's as wll to hold off for just now, keeping a keen eye on the exchange rate and waiting to pounce if it starts to drop dramatically.