US Dollar to British Pound (USD/GBP) Exchange Rate Firm Ahead of Meeting Minutes
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The US Dollar is anticipating the US Consumer Price Index, alongside the House Price Index and Existing Home Sales data on Tuesday, whilst the highly significant unemployment data is published on Thursday.
Chairwoman for the Federal Reserve, Janet Yellen, has recently stated that any interest rate hikes will be reliant on employment data to drive the economy to a stable level in order to sustain hikes.
However Thursday will see US Continuing Claims data alongside Initial Jobless Claims figures which are currently forecast to reach unfavourable levels.
Initial Jobless Claims statistics are predicted to rise by 310K in contrast to the previous 302K. Moreover Continuing Claims data is expected to jump to 2510K from the former 2507K.
An expert in the field, David Cooper, commented: ‘Things are getting much better, but it’s taken so long for us to get there we can’t celebrate that much.’
The Pound however is surrounded by speculation that UK interest rate hikes could happen in the near future. Wednesday will see the release of the Bank of England (BoE) Meeting Minutes, which are expected to show all board members voting unanimously that interest rate hikes shouldn’t currently take place.
A London based trader stated: ‘Investors are waiting for more bullish cues from the UK. Most of the good news is priced in, and if Sterling has to move higher then rate hike expectations have to be brought forward.’
However the Meeting Minutes will be searched for clues to give some insight into interest rate hikes.
RBC Capital stated: ‘Some Monetary Policy Committee (MPC) members have signalled the decision is becoming more finely balanced. By the time the August Inflation Report projections are presented at the next MPC meeting, news of another quarter of above-trend growth could provide the trigger for at least one vote to tighten policy.’
Currently the US Dollar to Pound exchange rate looks to be remaining fairly stable with economists not forecasting much further movement.
However, with a wealth of US data and the highly influential Bank of England Meeting Minutes released this week, there could be some dramatic fluctuations by the week’s close.
The current GBP to USD exchange rate is resting at 1.7057.