Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Advance on Fed Delay
The Pound Sterling to US Dollar (GBP/USD) exchange rate strengthened by around 0.40% on Friday morning.
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After British data showed trade balance to have narrowed substantially, the Pound strengthened against many of its major peers. The US Dollar, meanwhile, is generally trending lower against its most traded rivals after a Fed official talked down the prospect of a near-future rate hike. In addition, a succession of disappointing domestic data publications has caused the US Dollar to decline.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5144.
The Pound Sterling to US Dollar (GBP/USD) exchange rate remained trading at a 17-month low as Thursday’s session progressed due to the release of more positive US employment data.
The currency pair is forecast to soften further on Friday as US unemployment and payrolls data is likely to come in positively and add to signs that the worlds largest economy is continuing to strengthen.
The Pound Sterling to US Dollar (GBP/USD) exchange rate dived by around -0.32% on Thursday morning.
This can be attributed to traders holding off investment in the Pound ahead of the Bank of England’s rate decision. Most experts agree that the BoE policymakers are unlikely to take any action, leaving rates and quantitative easing at their current levels. The US Dollar, meanwhile, appreciated against most of its major peers as a result of the Federal Open Market Committee meeting minutes, which supported rate hawk speculation that they will normalise monetary policy by mid-2015.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5048.
Although there is less demand for the US Dollar thanks to the continued decline in oil prices, the ‘Buck’ (USD) is still in a position of strength versus most of its major peers. This is thanks to ongoing speculation that the Federal Reserve will lead the way towards monetary policy normalisation. The Pound, meanwhile, softened versus nearly all of its most traded rivals thanks to disappointing services and composite prints.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5178.
Pound Sterling (GBP) Exchange Rate Trending Lower on Services
Given that services account for a large proportion of total British economic growth, the declination in December’s services print caused a significant Sterling downtrend. The UK Services PMI softened beyond the median market forecast of a dip from 58.6 to 58.5, with the actual result falling to 55.8. In addition, the Composite PMI fell beyond the market consensus of a dip from 57.6 to 57.4, with the actual result dropping to 55.2.
Economist Chris Williamson stated; ‘Weaker rates of expansion were seen in services, manufacturing and construction in December, taking the overall pace of economic growth to the weakest for just over a year-and-a-half […]On the other hand, it’s too early to get worried about a sharp slowdown; after all, the latest PMI reading is still strong, merely down from unusually high levels earlier in the year and in line with the average seen in the years leading up to the financial crisis.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low today of 1.5163.
US Dollar (USD) Exchange Rate Strengthens ahead of Domestic Data
As traders await the US Non-Manufacturing Composite figure, the US Dollar is generally stronger versus most of its major peers. Although demand has softened fractionally whilst oil prices continue to crash, the prospect that the Fed will be the first of the major central banks to hike rates has supported a continued Dollar appreciation.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Soften
Provided the US domestic data meets with, or exceeds, expectations, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to continue trending lower.
The Pound Sterling to US Dollar exchange rate has advanced to a high today of 1.5275.