GBP to USD Exchange Rate Rallies on Trader Profit Buying
If you're looking to make an international money transfer, we recommend TorFX.
The Pound Sterling to US Dollar exchange rate is currently trending in the region of 1.6587.
Over the past week or so the Pound to US Dollar exchange rate has hit some record lows as poor domestic data softened Sterling, and positive domestic data strengthened the US Dollar.
Difficulties for the Pound started last Thursday after retail sales growth was seen to have dropped below the forecast figures. The initial decline was compounded by a dismal set of Eurozone domestic data results. Eurozone Composite, Manufacturing and Services PMI’s failed to meet with the forecast figures.
Given the intimate trading relationship between the UK and the Eurozone; perhaps the most detrimental data publication, in terms of negative Sterling movement, was the manufacturing PMI. Having been forecast to decline to 51.3 from 51.8, the actual result was a disappointing 50.8.
In complete contrast, the US Dollar experienced record highs last week and continued the bullish run over the weekend.
Despite a dovish speech from Federal Reserve Chair Janet Yellen at the Jackson Hole symposium on Friday, the Dollar fed off an impressive succession of positive domestic data results.
The most important of these impressive results came from the labour market. Both Continuing Claims and Initial Jobless Claims were seen to exceed expectations showing a positive deficit. The Federal Reserve has suggested that improved labour market data will be the catalyst for an interest rate hike in the near future.
The Pound Sterling to US Dollar exchange rate has it a low today of 1.6534.
Wednesday has seen a slight reversal in the ‘Cable’ (GBP/USD) exchange rate. The US Dollar has softened over the course of the day as traders have locked in their profits. There are several influential US domestic data releases on Thursday which are likely the primary cause for the profit buying at this time.
The idea that what must come up must come down can be applied to the current bullish ‘Buck’. Given that the succession of positive data result after positive data result must come to an end soon, and Thursday has an extremely important and influential data publication in Gross Domestic Product, it is unsurprising that investor reaction is to pull away and collect the profits.
Sterling is likely to continue to be influenced by the movement of other currencies as there is very little in the way of domestic data pertaining to the UK. Those invested in the Pound will also be hoping that Thursday’s Eurozone data will turn out positive results in the hope of sparking an upward trend towards the close of the week.
The Pound Sterling to US Dollar exchange rate has reached a high today of 1.6605.