The British Pound to US Dollar (GBP/USD) exchange rate fell in the first half of Tuesday’s European session as investors’ fears surrounding the general election increased.
Earlier… The British Pound to US Dollar (GBP/USD) exchange rate was trending higher in the second half of Monday’s European session after US Manufacturing Production contracted by -0.2% in February and the NAHB Housing Market Index slipped from 55 to 53 in March.
The British Pound to US Dollar (GBP/USD) exchange rate began Monday’s European session trending higher after UK Rightmove House Prices increased by 1.0% in March–however the annual figure slipped lower from 6.6% to 5.4%.
However, the US Dollar to British Pound (USD/GBP) exchange rate could recover some losses later in the session with US Industrial Production, Manufacturing Production and NAHB Housing Market Index due for release.
Earlier… The British Pound to US Dollar (GBP/USD) exchange rate slid by 1.0% during Friday’s European session after the Bank of England (BoE) was speculated to be further behind the US Federal Reserve in hiking interest rates.
However, in the week ahead, the British Pound may have plenty of opportunity to claw back ground. Wednesday is perhaps expected to be the most influential day for British Pound to US Dollar (GBP/USD) exchange rate movement with the release of UK Unemployment Rate and Employment Change figures out.
BoE/Fed Rate Hike Speculation to Heat Up GBP/USD Exchange Rate Trading
Economists have forecast the Unemployment Rate will remain at 5.7% in the three months through January. However, the Bank of England is also expected to release its most recent meeting minutes and therefore the BoE/Fed debate could heat up again.
This week saw BoE Governor Mark Carney backtrack on his former statements, suggesting that global deflation could cause the Monetary Policy Committee (MPC) to hold off from hiking interest rates. Previously, Carney had said that policymakers would look through deflation and hike rates anyway.
British Pound to US Dollar (GBP/USD) Exchange Rate Forecast
Meanwhile, the Federal Open Market Committee (FOMC) will announce its latest US rate decision on Wednesday and could cause major market movements for the US Dollar. Federal Reserve Chairwoman Janet Yellen has been relatively consistent in communicating the time frame for US rate hikes and suggests that the central bank will hold off from hiking rates in the next few meetings.
Despite Yellen’s transparency, the FOMC announcement is likely to cause ripples in the market.
US Industrial Production and Manufacturing Production will be out on Monday as well as NAHB Housing Market Index and Net Long-Term TIC Flows.
Tuesday’s US Housing Starts and Building Permits will also be out on Tuesday and could offer moderate movement to the US Dollar to British Pound (USD/GBP) exchange rate.
The British Pound to US Dollar (GBP/USD) exchange rate could feel a moderate effect from UK Rightmove House Prices on Mondayin what’s a relatively quiet day for domestic data.
Thursday will see the release of US Initial Jobless Claims, Continuing Claims, the Philadelphia Federal Reserve Index as well as Leading Indicators stats.
On Friday, the British Pound to US Dollar (GBP/USD) exchange rate was trading at 1.4758. The US Dollar to British Pound (USD/GBP) exchange rate was trending in the region of 0.6779.
