The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.43% on Tuesday afternoon.
After British sales data eclipsed economists’ forecast, the British Pound advanced versus many of its closest currency rivals. The appreciation has been somewhat laboured, however, as fears regarding the 2017 European Union referendum hinders investor confidence.
The US Dollar, meanwhile, advanced versus most of its major rivals after domestic data printed positively. The recent run of better-than-expected ecostats caused futures traders to bring forward bets as to the timing of a Federal Reserve benchmark lending rate increase.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5397.
Pound Sterling (GBP) Exchange Rate Forecast to Strengthen versus the Euro despite EU Referendum Anxieties
In response to positive sales data, the British asset climbed versus many of its peers. CBI Reported Sales was forecast to advance from 12 to 20, but the actual result climbed to 51 in May. ‘Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power,’ said Rain Newton-Smith, the CBI’s director of economics. ‘Overall, the outlook is bright for firms on the High Street, but challenges still remain, especially for food retailers, who are still feeling the heat of stiff price competition from new entrants to the sector.’
The appreciation was somewhat sluggish, however, amid ongoing concerns regarding the proposed EU referendum. If Prime Minister David Cameron fails to make changes to the current relationship, the likelihood of a Brexit would be significant. The PM’s struggles were exacerbated on Tuesday after Germany and France proposed a closer relationship which would make reforming the Lisbon treaty almost impossible.
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low of 1.4083 today.
US Dollar (USD) Exchange Rate Forecast to Rally versus the Euro as Ecostats Improve
Having produced mostly positive domestic data results on Tuesday, the ‘Greenback’ (USD) advanced versus the majority of its most traded currency rivals. April’s Durable Goods Orders declined by -0.5% which met with economists’ predictions. April’s Durables ex Transportation eclipsed the median market forecast 0.35 increase, with the actual result advancing by 0.5%. Of particular significance, in terms of the provocation of US Dollar appreciation was confidence data. Consumer Confidence was forecast to drop from 95.2 to 95.0 in May, but the actual result climbed to 95.4.
‘Consumer confidence improved modestly in May, after declining sharply in April,’ said Lynn Franco, director of economic indicators at the Conference Board. ‘While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Losses on Lack of Data
Given the absence of further domestic data publications to provoke changes, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold losses for the remainder of Tuesday’s European session. Wednesday ought to see GBP/USD volatility with US MBA Mortgage Applications data due for publication.
The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high of 1.5471 today.
Comments are closed.