Money transfers: Will Yellen send the US dollar higher?

If you are holding out for better exchange rates against the US dollar we urge you to consider most currencies are likely to struggle to gain traction against the USD going forward.

Indeed, these are possibly some of the best US dollar money transfer rates were are going to see for a significant period of time.

But why?

The majority of analysts we follow agree that when the US Federal Reserve starts tapering their unprecedented monetary stimulus we will start to see the USD start clawing its way back.

Tom Arnold at Currency Index explains the ascension of Janet Yellen to the head of the US Federal Reserve is significant:

"The impact that Mark Carney has had on the UK central bank; the Bank of England, has been significant, with a radical change of policy to his preferred Forward Guidance model. The markets are much more comfortable with this rather than the uncertainty of the previous system and the Pound has been able to make significant gains since he took over – helped by the economies overall improvement as well.

"Could a new FED chairperson have a similar impact? It’s hard to say, but if you do have an upcoming Dollar purchase or sale, this is well worth keeping in mind."

It is widely noted that Yellen is a 'dove' and will try to keep the quantitative easing programme running for as long as possible to ensure the US recovery becomes entrenched.

However, the programme must end. Some believe we could see tightening as soon as December; but most have March pencilled in for an announcement.

Either way, you will find markets starting to factor this in, thus driving up the value of the US dollar. The net result is that for those looking to transfer money internationally, these could be the best possible USD rates for some time.