The Pound Sterling to US Dollar (GBP/USD) exchange rate edged higher by around 0.15% on Wednesday morning.
As traders await British labour market data, due for publication later on Tuesday morning, the Pound is fluctuating against its major peers. A fractional appreciation can be attributed to speculation that the data will yield positive results.
The US Dollar, meanwhile, is generally softer versus most of its major rivals as traders speculate the Federal Reserve will delay a rate hike for the foreseeable future.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5166.
Yesterday…
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.41% on Tuesday morning.
As traders speculate that Wednesday’s British labour market data will produce positive results, the Pound strengthened against the majority of its most traded currency competitors. Further appreciation can be attributed to the Labour Party’s electoral campaign focusing on repairing the relationship between the UK and the European Union.
The US Dollar, meanwhile, is generally holding steady versus many of its major peers with a lack of influential data to provoke volatility. A slight appreciation can be linked to economic divergence as we near a programme of quantitative easing from the European Central Bank (ECB).
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5150.
Pound Sterling (GBP) Exchange Rate Strengthens despite Lack of Data
Despite the fact that there is a complete absence of British economic data on Tuesday, the Pound strengthened versus most of its major rivals. This is as a result of speculation that Wednesday’s data will print positively, with particular reference to unemployment rate.
November’s Employment Change is forecast to add an additional 74,000 new jobs. The Unemployment Rate is expected to drop from 6.0% to 5.9%. Positive results from labour market data will pressure the Bank of England (BoE) into policy normalisation.
The British asset is also finding support after it was revealed that the Labour Party’s electoral campaign focuses on strengthening the relationship between Britain and the EU.
Douglass Alexander, who will become foreign secretary if Labour wins i May’s general election, is speaking in Paris on Tuesday. ‘The idea that our influence in world capitals would grow as our influence in Europe diminished is not just a euroskeptic fantasy, but a post-imperial delusion,’ Alexander will say. ‘The prospect of a second-term Conservative government could see Britain stumble out of Europe altogether.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low today of 1.5056.
US Dollar (USD) Exchange Rate Gains on Policy Divergence
Although there is a distinct lack of influential domestic data to provoke changes, the US Dollar is generally advancing versus many of its major peers. This can be attributed to policy divergence as the ECB moves closer to a bond-buying programme and the Fed considers raising interest rates.
‘The market is very clearly expecting a significant move from the ECB,’ said London-based strategist Alex Scott. ‘As optimism builds about that stimulus package this week, it’s critical for the ECB to signal that QE will continue until Europe’s growth problems are solved.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Gains
With little by way of influential data to initiate changes, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold its gains on Tuesday. With that being said, there is the possibility for Dollar volatility with the US Housing Market Index due for publication later on Tuesday.
The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high today of 1.5165.
