The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending within a limited range on Tuesday morning.
As traders await US Composite and Services PMIs, in addition to Consumer Confidence data, the US Dollar edged higher versus many of its most traded currency rivals. With mixed results forecast for the aforementioned data publications, the slight appreciation can be attributed to speculation that Federal Reserve Chair Janet Yellen will use hawkish language in her speech in Washington.
The Pound, meanwhile, strengthened thanks to continued support from rate hawks. Speculation that Greece will submit to austerity also bolstered Sterling gains as a deterrent for anti-austerity supporters in the UK. This is particularly prevalent as we draw closer to the general election.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5445.
Yesterday…
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending within a narrow range on Monday afternoon.
After British economic data failed to meet with the market forecast, the Pound softened against some of its major peers. However, positive sentiment towards the Bank of England (BoE)(given that the BoE is one of the few major central banks in a position to hike rates) has seen the British asset hold gains versus most of its major competitors.
The US Dollar, meanwhile, strengthened as a result of dampened market sentiment after oil prices resumed declination. Further gains are the result of domestic data bettering estimates.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5387.
Pound Sterling (GBP) Exchange Rate Gains on Positive Sentiment
With the situation in Greece dominating trader focus, impact from domestic data has been minimal. This is especially true with the Pound, which has held gains despite particularly disappointing sales data.
CBI Reported Sales came in at 1 in February, well below the median market forecast of 35. Rain Newton-Smith, CBI director of economics, said; ‘After a strong start to the year, retailers were disappointed by the unexpected halt in sales growth. In particular, continually heavy discounting in the grocers sector seems to be weighing on activity.’
Despite the less-than-impressive sales data, most recent UK publications have been positive. This has given hawks fuel to speculate that the BoE will hike rates before originally expected and helped the Pound avoid significant declination.
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low of 1.5405.
US Dollar (USD) Exchange Rate Edges Higher after Data Bettered Estimates
As with the Pound, US data had less of an impact on Monday with traders concentrating on developments in Greece. However, after data bettered estimates, the US Dollar strengthened versus most of its major peers. The Chicago Fed National Activity Index was expected to gain from -0.05 to 0.05, but the actual result advanced to 0.1.
The US Dollar also found support thanks to its safe-haven qualities after US stockpiles and tensions in Libya caused oil prices to decline. ‘US crude stocks are elevated and set to build through May as challenges continue to mount,’ Morgan Stanley said in a weekly report. ‘Volatility should be the new normal, but price upside is likely limited from here.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Fluctuate
Although domestic data has been less impactful thus far on Monday, the forthcoming US home sales data has the potential to provoke volatility for the Pound Sterling to US Dollar (GBP/USD) exchange rate. For those invested in the US Dollar, there will be several important data publications on Tuesday with the potential to cause ‘Greenback’ (USD) changes.
The Pound Sterling to US Dollar (GBP/USD) exchange rate reached a high today of 1.5417.
