US Dollar to Pound Sterling (USD/GBP) Exchange Rate Gains Ahead of BoE Minutes
The US Dollar (USD) is presently trading against the Pound Sterling (GBP) at 0.5857 reaching its pinnacle at 0.5866, whilst dipping to 0.5854. Conversely the ‘Buck’ is trading at 0.7419 against the Euro (EUR) with session highs of 0.7421 and lows of 0.7392.
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The US has seen positive results from their Consumer Price Index which came in at the forecast 2.1%. Furthermore House Price Index figures beat economists’ predictions resulting in a 0.4% rise, bypassing the 0.2% forecast.
Economist Stephanie Karol commented: ‘The current conditions are more encouraging for buyers. As price gains moderate and wage growth and employment growth pick up, buyers will be in a better position to make a purchase.’
The US has needed positive figures to give the US Dollar a boost in the currency market against other majors.
Conversely the Pound has seen another mixed bag of results on Tuesday as the UK Public Finances and Public Sector Net Borrowing figures were published beating economists’ forecasts.
Public Finances data reached £11.8 billion in June, bettering May’s £8.4 billion, moreover the Public Sector Net Borrowing in June bypassed forecasts of £9.4 billion, reaching £9.5 billion instead.
The Pound could be boosted further against other currency majors from such positive results, however, other UK figures proved disappointing.
UK Business Optimism fell to a surprising 19 in July, despite forecasts of 30 and the former 33 in June.
The GBP/USD exchange rate is currently residing at 1.7061, after reaching highs this session of 1.7083 following this mornings positive results.
The Pound however has been trading high for some time now, with no future prospect of falling. The timeframe for interest rate hikes in the UK has been hot topic for some time, and with favourable figures presenting themselves, the discussion will become more heated.
An expert in the field, Lee McDarby stated: ‘The market seem to be hanging on every hawkish word from Mark Carney. We are more likely to see a rate hike from the Bank of England in 2014 than we are from the European Central Bank or the Federal Reserve.
The Bank of England’s (BoE) will release Meeting Minutes on Wednesday which could prove a boost for the Pound if the voting for interest rate hikes proves not to be unanimous.
Economist for Santander, Stuart Green, has commented: ‘Given the strength of the UK data we would expect gilts to underperform in this sort of environment. The market may also be thinking about tomorrow’s MPC [Monetary Policy Committee] minutes which will lead to some nervousness around the possibility if a surprise split in the vote.’
The US Dollar looks set to remain bullish in the USD/GBP exchange rate momentarily, trading at 0.5857, however, Wednesday’s meeting minutes could push the Pound into stronger figures than recently seen against the ‘Greenback’.