On Tuesday, the Pound Sterling to US Dollar (GBP/USD) exchange rate firmed but as the session progresses the currency pair is forecast to fall as economist look ahead to US data releases and UK inflation data.
The Pound Sterling to US Dollar (GBP/USD) exchange rate remained under pressure on Monday as demand for safe haven assets strengthened.
Concerns over falling commodity prices, a weakening in the global economy and the terrorist hostage situation in Australia was all weighing upon market sentiment.
House Price Index weighs on Pound Exchange Rate
Sterling came under pressure early in the session as data released overnight showed that asking prices for homes on sale in the UK made their biggest monthly decline on record.
According to Rightmove’s House Price Index, asking prices tumbled by 3.3% to take average property prices to £358,424.
The report adds to signs that the nation’s housing market is cooling as measures by the Bank of England take affect and as the prospect of an interest rate hike, next year delays consumers decisions.
Commodity Price Falls Dent Sentiment
Market sentiment is under pressure as commodity prices continue to decline and as clashes in Libya and the hostage situation in Australia weigh upon sentiment.
Crude oil prices fell close to a new five year low and gold tumbled to its lowest level in close to a week. Iron ore prices also slumped to new lows and dairy prices remain weak.
Oil prices briefly rallied over the weekend as armed rebels launched an offensive against two Libyan oil terminals and two ports were closed. The government also announced a cut in production at some of the nation’s oil fields as heavy fighting continues in the area.
Sentiment was further knocked by the ongoing hostage situation-taking place at a cafe in Sydney. About 10 cafe employees and 30 customers were thought to be inside at the time. Nearby offices were evacuated and police asked people to remain indoors and away from open windows.
Anti-austerity protests taking place Brussels and heightened worries over political uncertainty in Greece meanwhile allowed the US Dollar to advance against the Euro.
Pound Sterling to US Dollar Exchange Rate Forecast
The US Dollar could make further gains against the Pound Sterling later in the session if the latest data out of the USA comes in strongly and adds to expectations that the Federal Reserve will be more hawkish at Wednesday’s policy meeting.
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,0.6383 ,
US Dollar,,Euro,0.8003 ,
US Dollar,,Canadian Dollar,1.1653 ,
