The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending within a tight range on Friday morning.
After British economic data erred towards the positive, the Pound strengthened versus many of its major peers. Significantly improved consumer confidence due to low oil prices acting like a tax cut initiated the Sterling advance.
The US Dollar, meanwhile, is holding gains after Thursday’s positive labour data promoted speculation that the Federal Reserve will be the first of the major central banks to raise borrowing costs.
However, the US Dollar is unlikely to advance significantly ahead of domestic growth data, due out later on Friday.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5074.
Pound Sterling (GBP) Exchange Rate Strengthens on Consumer Confidence
With mostly positive results from domestic data, the Pound edged higher versus most of its major rivals. Of particular significance was GfK consumer confidence report which eclipsed the median market forecast of a rise from -4 to -2, with the actual result reaching 1.
‘With less than 100 days before the election, this big jump in the index will be very welcome news for the government,’ said Nick Moon, Managing Director of Social Research at GfK.
In addition, Mortgage Approvals bettered estimates of 59,000 new approvals, with the actual result reaching 60,300. However, Net Consumer Credit and Net Lending Securities on Dwellings declined from previous figures.
The Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a low of 1.5047.
US Dollar (USD) Exchange Rate Holding Gains ahead of GDP
After labour market data produced positive results on Thursday, the US Dollar rallied versus the majority of its most traded currency competitors. Friday has seen the Dollar hold gains as traders await the day’s growth figures.
Annualised Gross Domestic Product is forecast to soften from 5.0% to 3.0% in the fourth quarter. ‘Tonight, the highlight will be US Q4 GDP,’ National Australia Bank said. ‘With the very one-sided trading in favour of the Dollar in the past few sessions, one would expect that a disappointing result would cause a fair amount of pain amongst investors.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Strengthen
Given that US GDP is forecast to cool significantly, there is heightened potential for the Pound Sterling to US Dollar (GBP/USD) exchange rate to strengthen on Friday afternoon.
The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high today of 1.5096.
