Pound Sterling to US Dollar (GBP/USD) Exchange Rate forecast to climb ahead of Wednesdays BOE minutes

Investors and economists are forecasting that the Pound will strengthen against the US Dollar ahead of Wednesday’s Bank of England minutes citing that the Central Bank’s policy makers expect the UK economy to quicken its recovery.

According to Bloomberg, Morgan & Stanley is recommending that investors buy the Pound ahead of Wednesday and is expecting the GBP to USD rate to reach as high 1.665 to 1.69.

“We expect the Pound to gain some support during the week. We could see some of the more hawkish views, regarding slack in the economy, starting to become apparent in the minutes, which should provide Sterling with some support. The Pound could also gain from some safe-haven flows in the expected risk-off environment,” said analysts at Morgan Stanley.

Wednesday will also see the publication of the latest unemployment rate data. The jobless rate is being forecast to have stayed at 7.2% in the first quarter of the year. If that figure surprises by coming in below that figure, then the Pound will surely jump higher against most of its peers.

Looking to the US Dollar and the currency was softened by the publication of mixed data.

Industrial production in the world’s largest economy recovered some ground following the harsh winter conditions seen in the first part of the year. Industrial production climbed by 0.6% in February, exceeding expectations for a rise of 0.1%.

The currency was weighed upon however by a weaker-than-expected New York Empire State Manufacturing Index and a report which showed that the National Association of Home Builders (NAHB) monthly index took a dive in February. The index ticked up to 47, the second-lowest it has been since May 2013. NAHB says the primary culprit is the weather.