Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: Sales Data Expected to Cause Movement this Week
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a tight range on Monday afternoon.
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With tensions mounting regarding a Grexit from the Eurozone, many analysts speculate that situation could have global ramifications. The US Dollar was unable to capitalise on its safe-haven qualities as a result of traders fearing that the issues in the Eurozone will prevent the Federal Reserve from raising rates.
The Pound Sterling, meanwhile, has also struggled to gain support amid rising geopolitical issues.
UK Inflationary concerns have also aided the Pound’s declination.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5230.
Pound Sterling (GBP) Exchange Rate Dips ahead of Inflation Report
After British inflation declined to a record-equalling low of 0.5% in December, many economists speculated that January could see inflation fall into negative territory. With the Bank of England’s inflation report due on Thursday, the Pound is generally trending lower versus most of its major peers.
‘The BoE’s already-strong views on inflation are likely to become even stronger, with the central bank likely to repeat the UK inflation risks when the quarterly report is released,’ said Jameel Ahmad, chief market analyst at FXTM.
The Pound is also struggling against a back drop of problems in the Eurozone and concern about how a Grexit will impact the UK. ‘Political risks and economic headwinds from Europe are likely to limit gains in the Pound,’ said a London-based spot trader.
The Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a low of 1.5197 today.
US Dollar (USD) Exchange Rate Ticks Lower on Labour Market Conditions
After US data printed relatively poorly on Monday, the US Dollar edged lower versus most of its major peers. The Labour Market Conditions Index Change dropped from 6.1 to 4.9 in January.
Additional losses are as a result of trader uncertainties as many speculate that a Grexit would have far-reaching ramifications, and until the situation is under control the Fed is likely to delay a rate hike.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Steady
With an absence of significant data to provoke changes on Monday, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold steady for the remainder of Monday. There is heightened potential for GBP/USD volatility on Tuesday with the UK’s growth estimate and US wholesale data due for publication.
Investors with an interest in the GBP/USD pairing will also be looking ahead to the highly-influential US Advance Retail Sales report.
A steeper-than-forecast decline in sales could help the Pound gain on its US peer as the week continues.
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced to a high today of 1.5267.