The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.16% on Friday morning.
After British consumer confidence failed to meet with the median market forecast, the Pound ticked lower versus many of its major peers. The US Dollar, meanwhile, is subject to fluctuations in the currency market as traders await growth data.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5387.
Yesterday…
The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.60% on Thursday afternoon.
After British data produced mixed results, the Pound softened versus many of its major peers. However, mounting speculation that the Bank of England (BoE) will be one of the first major central banks to increase the benchmark interest rate has kept the Pound in a strong position.
The US Dollar, meanwhile, strengthened versus the majority of its most traded currency rivals despite varied results from domestic data. An above estimate increase in durable goods order is most likely the catalyst for the Dollar surge. Additional gains can be attributed to hawkish comments from Federal Reserve official James Bullard.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5434.
Pound Sterling (GBP) Exchange Rate Edges Lower on Business Investment
After the preliminary figures for fourth-quarter British Gross Domestic Product (GDP) met with forecast figures, the Pound strengthened versus many of its peers. However, the gains were short-lived thanks to a slide in annual Business Investment from 6.3% to 2.1%.
‘The second estimate of Q4 GDP confirms that the recovery slowed at the tail end of 2014, but has become better balanced,’ said Samuel Tombs, senior UK economist at Capital Economics. ‘The one wrinkle in the figures is the 1.4% quarterly fall in business investment – the second in a row. But this seems to reflect the cancellation of investment plans in the oil sector, rather than a wider malaise. All in all, the latest GDP figures need not ring any alarm bells regarding the strength or sustainability of the UK economy’s recovery.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low today of 1.5432.
US Dollar (USD) Exchange Rate Gains on Bullard Comments
Mixed US data has allowed the ‘Greenback’ (USD) to strengthen versus many of its major rivals on Thursday. Of particular positivity was Durable Goods Orders, which eclipsed the median market forecast of 1.6% growth, with the actual result reaching 2.8%.
In addition to positive durable goods orders, the US Dollar strengthened after St Louis Federal Reserve chief James Bullard said that policymakers need to abandon its reference to ‘patience’ in describing its outlook on monetary policy. However, the dovish Fed approach is still weighing heavily on the North American Asset.
‘Janet Yellen has done a fair bit in recent days both to help stop the Dollar’s advance and to suck volatility out of the FX market,’ Kit Juckes, a strategist with French bank Societe Generale in London, said. ‘The prospect of a shift in Fed policy promises a move to a sustained period of higher volatility, but the talk of patience, and the emphasis on flexibility when the Fed finally acts, soften that effect.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Losses
Given the lack of influential data to curb the trend, and with traders reacting to every hawkish comment made by Fed officials, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold losses for the remainder of Thursday’s trade.
With US annualised growth figures and British consumer confidence due, the GBP/USD pairing ought to be subject to heightened volatility on Friday.
The Pound Sterling to Us Dollar (GBP/USD) exchange rate reached a high today of 1.5552.
