GBP/USD Conversion Rate Predicted to Tick Higher after UK Home Sales Eclipse Expectations
The Pound Sterling to US Dollar (GBP/USD) exchange rate edged fractionally higher on Wednesday afternoon by around 0.1%.
Although the appreciation has been sluggish, the Pound ticked higher versus its major peers on Wednesday in response to better-than-expected domestic data. December’s Nationwide House Prices were forecast to advance by 3.8% on the year, but the actual result saw a massive 4.5% annual gain. On a monthly basis, December’s Nationwide House Prices climbed by 0.8%; bettering the median market projection of 0.4% monthly growth. Industry experts forecast further house price gains in 2016 with demand continuing to outstrip supply and amid improving labour market conditions.
‘Further healthy gains in employment and rising wages are likely to bolster buyer sentiment, while borrowing costs are expected to rise only gradually. However, the main concern is that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability,’ stated Robert Gardner, Nationwide’s chief economist. ‘The gain in employment in London is particularly striking, with the number of people in employment up 14% compared to the pre-crisis period,’ he added.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4837.
USD/GBP Conversion Rate Predicted to Hold Losses after Pending Home Sales Failed to Impress
US economic data produced disappointing results today which saw the US Dollar edge lower versus its major peers. The US asset has thus far avoided a larger depreciation, however, amid speculation that the Federal Reserve will hike the benchmark interest rate several times over the course of 2016. However, there are a number of pundits that predict the US Dollar will depreciate in the first-quarter of 2016 amid concerns that ‘Greenback’ (USD) overvaluation will drag on economic progress.
November’s Pending Home Sales was forecast to advance by 0.5% on the month, but the actual result unexpectedly contracted by -0.9%. On the year, November’s 2.7% growth fell well short of the market consensus of 3.5%. ‘Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains,’ stated Lawrence Yun, NAR chief economist. With existing-housing inventory below year-ago levels and insufficient new-home construction, ‘it’s likely supply constraints and faster price appreciation will reappear once the spring buying season begins,’ he added.
The Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a low of 1.4791 during Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: US Labour Market Data to Provoke Volatility
Given the absence of further domestic data today pertaining to either the UK or the US, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold current factional gains for the remainder of Wednesday’s trade. Thursday should see heightened GBP/USD conversion rate volatility with US Initial Jobless Claims and Continuing Claims data due for publication. There is the potential for increased volatility in response to thin trading volumes as traders break for New Year celebrations.
The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high of 1.4849 during Wednesday’s European session.
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