At the close of last week, the Pound Sterling to US Dollar (GBP/USD) exchange rate declined as a result of better-than-expected US Change in Non-Farm Payrolls figures.
Pound Sterling (GBP/USD) Forecast to Soften on Monday
The US Dollar strengthened against its major peers on Monday morning after higher-yielding currencies slumped in the wake of disappointing data out of China. The Pound Sterling, meanwhile, is subject to changes in foreign currency movement whilst traders await employment confidence data.
The Pound Sterling to US Dollar exchange rate is currently trending in the region of 1.5568.
After China’s trade data printed below expectations, higher-yielding and risk-correlated currencies softened. Given its safe-haven qualities, the US Dollar has continued trending on a bullish run as a result of stuttered risk sentiment.
GBP/USD May Fluctuate on Tuesday
Tuesday’s economic docket houses several data publications pertaining to both the UK and the US. Therefore it is likely that the GBP/USD exchange rate will be subject to volatility and fluctuations.
For those invested in the Pound, Yearly Industrial and Manufacturing production will be of interest. In addition, the NEISR Gross Domestic Product Estimate also has the potential to spark movement.
Although there are several US data publications on Tuesday, there is only one which has significant weighting to influence market movement. NFIB Small Business Optimism registered a score of 96.1 previously.
GBP/USD Predicted to Soften on Wednesday
British data on Wednesday will show the state of the trade deficit in October. Given that September’s trade balance data showed the shortfall widened, October’s prints are likely to emulate the previous month. A declination in Total Trade Balance, Trade Balance Non EU and Visible Trade Balance will cause the Pound to slump against its major peers.
Last month’s British trade data saw industry expert Chris Giles state; ‘Britain’s trade deficit grew in September to stand at £2.8bn, but the gap between imports and exports of goods and services has remained broadly stable throughout 2014. The deficit rose from £1.8bn in August reflecting a deterioration in both EU and non-EU trade in goods, while Britain’s surplus in services trade continued. The smooth pattern of trade deficits this year suggests that although Britain’s healthy recovery is not pulling in ever growing volumes of imports, overseas trade is not contributing to the upswing in growth.’
In terms of US data, MBA Mortgage Applications and the Monthly Budget Statement has the potential to initiate changes.
GBP/USD Could Extend Losses on Thursday
A lack of influential domestic data on Thursday will see the Pound subject to changes in foreign currency movement. RICS House Price Balance is unlikely to have a significant impact on the Pound Sterling.
Conversely, US data will be driving US Dollar volatility. In particular, Advance Retail Sales will dominate trader focus. Should the data meet with the median market forecast of 0.3%, the US Dollar is likely to strengthen against its most traded currency rivals.
Retail Sales Less Autos, Retail Sales Control Group, Initial Jobless Claims, Continuing Claims and Business Inventories data will also be of interest to those invested in the US Dollar.
Industry expert John Divine said of last month’s figures; ‘If Friday’s US retail sales figures for October are any indication, the US economy is primed to enjoy a strong holiday shopping season in November and December. Buoyed by consumers with more money lining their pockets due to lower gas prices, the US Department of Commerce’s advance monthly retail trade report showed retail sales growing 0.3% in October from September, narrowly edging consensus estimates for 0.2% growth.’
Pound Sterling to US Dollar (GBP/USD) Forecast to Fluctuate on Friday
British data on Friday will have little impact on wider market movement. The Construction Output data, however, may be of interest to those trading with the Pound. The Pound may also be affected by movement in the foreign currency market.
In contrast, the University of Michigan Confidence data is likely to have a significant influence over the direction taken by the US Dollar before the weekend.
At the close of last week, the Pound Sterling to US Dollar exchange rate was trending in the region of 1.5586.
