The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to its lowest level in 14-months on Friday following the release of worse than forecast UK trade balance data, the currency pair is forecast to fall further as investors look ahead to the release of US employment data.
Sterling continued its decline against the US Dollar as data published by the London based Office for National Statistics added to signs that the UK economy is slowing down. The data showed that the nation’s trade deficit widened to £9.821 billion in September from the preceding months figure of £8.950 billion.
Analysts had been expecting the deficit to narrow slightly to £9.4 billion.
The report showed that UK exports increased by 4.2% but imports increased more by 5.8% as demand for oil imports increased. The imports of oil surged by 27.6% in September compared to August. Combined with Britain’s surplus in trade services the nation’s overall trade deficit widened to £2.838 billion in September.
With the Eurozone, continuing to struggle the UK has mostly depended on domestic demand to aid its economy. The ongoing weakness in Europe is denting the UK government’s hopes of focusing the economy more on exports.
Britain’s goods trade deficit with countries in the 28-nation European Union widened to £5.773 billion from £5.250 billion in August as exports edged up by 0.9% and imports rose 3.7%.
The shortfall with non-EU countries widened to £4.048 billion from £3.700 billion in August, bigger than a forecast for a gap of £3.7 billion.
Sterling is also under pressure after the Bank of England chose to keep interest rates at the record low level of 0.5%. Investors have pushed back their expectations for the BoE to raise interest rates before the middle of next year.
Pound Sterling to US Dollar Exchange Rate Forecast to Weaken Further
The Pound is expected to decline further on Friday as economists forecast that eagerly anticipated Non-Farm payrolls data out of the world’s largest economy will show that the US jobs market continued to strengthen.
A better than forecast report will bolster the ‘Greenback’ as investors are likely to raise their bets that the Federal Reserve will raise interest rates.
Pound Sterling to US Dollar Exchange Rate Remains Weak
The Pound remained weaker against the US Dollar on Friday afternoon as earlier disappointing UK trade data and comments made by Bank of England governor Mark Carney weighed upon the currency. The US currency meanwhile advanced despite data showing that the U.S. economy added 214,000 jobs last month, disappointing expectations for an increase of 231,000. The number of jobs added in September was revised to 256,000 from a previously estimated 248,000. Sterling also declined against the Canadian Dollar after data showed that the nation’s unemployment rate declined to a six-year low.
Pound Sterling to US Dollar Exchange Rate Moves Higher
The Pound to US Dollar exchange rate edged away from a 14-month low on Monday as the American currency was softened by the release of softer than forecast Non Farm Payrolls data.
The ‘Greenback’ was also being softened by traders embarking on a bout of profit taking.
Due to a lack of market moving data releases the currency pair is forecast to see muted movement throughout the day.
Pound Sterling to US Dollar Exchange Rate continuing to rise
The GBP/USD exchange rate continued its recovery on Monday afternoon and advance for a second consecutive session as economists raised their bets that upcoming UK job and inflation data will show come in positively. The nation’s jobless rate is likely to fall and more importantly wage growth is expected to sow signs of improvement. Weak wage growth has been one of the major barriers to for Bank of England policy makers to vote in favour of an interest rate rise. An improving picture could see traders raise their bets for the BoE to raise rates sooner than forecast.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.6291 ,
US Dollar,,Euro,0.8006 ,
US Dollar,,Canadian Dollar,1.1312,
US Dollar,,Australian Dollar,1.1538 ,
Pound Sterling,,US Dollar,1.5896 ,
Euro,,US Dollar,1.2487 ,
[/table]
