The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending just below the 1.54 level on Wednesday having strengthened in response to yet more disappointing US news.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Rallies as US Consumer Confidence Falls
On Monday the Pound Sterling to US Dollar (GBP/USD) exchange rate advanced following the release of below-forecast Markit Services and Composite PMIs for the US.
Although both gages remained well above the 50 mark separating growth from contraction, they softened by more-than-anticipated and added to expectations that the Federal Reserve will refrain from adjusting borrowing costs for the foreseeable future.
As a result of the declination, the US Dollar kicked off the week in a broadly softer position.
The ‘Greenback’ then extended these declines on Tuesday as the US Consumer Confidence index provided cause for concern.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a low of 1.5324
An increase in sentiment from 101.4 to 102.5 had been forecast, but confidence actually dropped to 95.2 – the lowest level recorded since last December.
According to industry expert Lynn Franco; ‘Consumer confidence, which had rebounded in March, gave back all of the gain and more in April. This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lacklustre performance of the labour market, and apprehension about the short-term outlook. The Present Situation Index declined for the third consecutive month. Coupled with waning expectations, there is little to suggest that economic momentum will pick up in the months ahead.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate achieved a high of 1.5406
‘Cable’s bullish run was barely hindered by the UK’s below-forecast growth report, and the upswing in the GBP/USD exchange rate continued as the Rightmove House Price report showed surprisingly strong UK price growth in April.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: US GDP, FOMC Announcement Ahead
During the North American session the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to experience extensive fluctuations following the publication of the US first quarter growth report.
The GDP data is expected to show annualised expansion of 1.0% in the first quarter, down from the 2.2% growth recorded in the fourth quarter of last year.
However, any GBP/USD movement may be restrained ahead of the Federal Open Market Committee’s (FOMC) interest rate announcement.
The recent stream of below-forecast US data (which has included disappointing jobs, retail sales and sentiment figures) has led many industry experts to bet that the Federal Reserve will leave interest rates on hold for longer than previously projected.
If the Fed uses today’s policy statement to push rate hike projections back to the fourth quarter of this year or the first quarter of next, ‘Cable’ could advance beyond 1.54 before the close of trading.
The Pound Sterling to Euro (GBP/EUR) exchange rate is was trending in the region of 1.3971, the US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.9085, the Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1004, the Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5375.
