The US Dollar has remained bullish today against the majority of currencies, although Pound Sterling has managed to claw back some losses as the London session draws to a close. GBP/USD is now trending -0.4% down at around 1.5040.
Earlier…
While Year-on-Year (YoY) UK Gross Domestic Product figures show a steady 2.3% rate of growth, several sectors continue to underperform, with net trade weighing heavily on UK economic output. Meanwhile, the US Dollar has begun a bullish trend on the back of Wednesday’s data glut.
GBP/USD Exchange Rate Falls as Trade Deficit Widens to £14.2 billion
A £7.7 billion trade deficit in the second quarter of this year widened to over £14 billion in the third quarter, today’s figures showed. The gap has scratched -1.5% off UK GDP growth, after making nearly the same level of positive contribution the previous quarter. The deficit has expanded because imports rose 5.5% in Q3 while exports experienced a rise of just 0.9%.
The GfK sentiment survey released today revealed more bad news, with UK consumer confidence falling to 1 point, the lowest level since May and down from a high of 7 in August.
According to Joe Staton, GfK’s Head of Market Dynamics: ‘The good news on the domestic front – with households lifted by wage growth, low interest rates and near-zero inflation – is being tempered by concerns about our ability to shrug off the global downturn. Upwards momentum in the Index is also being dragged down by consumer worries about the past performance of the UK economy and expectations for the economy in the year to come.’
The GBP/USD exchange rate is currently down -0.5%, trading around 1.5032.
USD/GBP Exchange Rate Forecast: US Dollar Surges After Thanksgiving Break
Thanksgiving provided a period of calm as the markets slowed following a glut of US data released on Wednesday. The ‘Buck’ (USD) performed sluggishly over the holiday, but has started trending up against almost all the major currencies today, with the exception of the Japanese Yen (JPN).
The rise comes after multiple pieces of US data were released on Wednesday, chief among them being the Durable Goods Orders for October, which posted surprising 3.8% growth, beating the forecast 2.5% rise. This, combined with a 12k fall in the number of Initial Jobless Claims and an increase in Markit Composite and Services PMIs, has been enough to overshadow many of the figures which disappointed.
Personal Consumption Expenditure Core held steady at 1.3%, failing to rise to the forecast 1.4%, with Personal Spending also unexpectedly remaining steady and mortgage applications shrinking from 6.2% to -3.2%.
With the positive figures outshining negative statistics, the US Dollar is on bullish form, up 0.5% against Pound Sterling, the Swiss Franc (CHF), the New Zealand Dollar (NZD) and the South African Rand (ZAR).
The USD/GBP exchange rate is currently trending between 0.6620 and 0.6652.
GBP/USD Exchange Rate Forecast: ‘Buck’ Could Dominate, Strong US Data Week Ahead
While the UK has important data due out next week, including Net Consumer Credit and Mortgage Approvals on Monday and the results of the Bank of England (BoE) Bank Stress Tests on Tuesday, the US will be releasing a much larger quantity of data over the week. The ISM Manufacturing index is due out on Tuesday, while Thursday sees Fed chairwoman Janet Yellen appearing before the Congressional Joint Economic Committee.
The GBP/USD exchange rate is currently trading between 1.5027 and 1.5109.
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