Pound Sterling to US Dollar (GBP/USD) Exchange Rate Volatility Expected
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in a narrow range on Wednesday ahead of the release of a run of US reports.
US initial jobless claims are expected to have increased in the week ending December 27, and the Chicago Purchasing Manager is believed to have fallen from 60.8 to 60.0.
These reports could cause US Dollar losses. However, Pound Sterling to US Dollar (GBP/USD) exchange rate gains may be limited if the US Pending Home Sales data shows the 0.5% month-on-month gain anticipated.
Of course, with markets closing for the New Year break, currency movement may be a little restrained.
Earlier…
GBP/USD Exchange Rate Gains 0.2%
With the Nationwide house price report offering no negative surprises, the Pound Sterling to US Dollar (GBP/USD) exchange rate was able to eke out a modest gain on Tuesday.
The GBP/USD pairing remained trading higher as the US Consumer Confidence report disappointed expectations.
Although the gauge of sentiment increased, rising from 88.7 in November to 92.6 in December, the gain was smaller than the rise to 94 anticipated by economists.
The Pound Sterling to US Dollar (GBP/USD) exchange rate subsequently extended its advance to 0.3% and achieved a high of 1.5565.
Earlier…
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5532 on Monday.
GBP/USD Exchange Rate Edges up as Manufacturing Eases
During the North American session the Pound Sterling to US Dollar (GBP/USD) exchange rate was able to pare its earlier losses as the US Dallas Fed Manufacturing Activity Index disappointed expectations.
Rather than easing from 10.5 to 9.0, as forecast, the measure of the manufacturing sector dropped to 4.1 in December.
As stated by the Dallas Fed; ‘Perceptions of broader economic conditions remained positive this month. The general business activity index fell from 10.5 to 4.1. The company outlook index was almost unchanged at 8.4, with 21 percent of respondents noting an improved outlook. Labor market indicators reflected unchanged workweeks but continued employment increases. The December employment index held steady at a solid reading of 9.2, with 17 percent of firms reporting net hiring compared with 7 percent reporting net layoffs. The hours worked index dropped from 5.7 to 0, indicating no change in hours worked in December.’
Earlier…
GBP/USD Exchange Rate Set to End 2014 Trending Lower
Over the second half of 2014 the Pound Sterling to US Dollar (GBP/USD) exchange rate softened steadily, with the pairing falling from highs of 1.72 to lows of 1.55 as the odds of the Bank of England (BoE) increasing interest rates fell and bets for policy adjustment from the Federal Reserve rose.
The US Dollar also advanced on several of its other most-traded currency counterparts as the US posted impressive domestic data (including surprisingly strong third quarter growth figures and surging consumer confidence numbers).
The improving US labour market also kept the Federal Reserve on track with its tapering of quantitative easing, and the central bank brought the measure to an end as projected.
Investors now expect the Fed to be the first central bank from the Group of Seven to hike borrowing costs, with the first rate increase projected for the spring of 2015.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.5586
US Dollar strength is also likely to persist into the New Year.
According to Bloomberg’s Andrea Wong; ‘The Dollar hasn’t had this good a year since the Berlin Wall fell, Taylor Swift was born and the World Wide Web was conceived.’
Wong continued; ‘The ‘Greenback’ is set to gain against all of its 31 major counterparts in 2014 for the first time in data going back to 1989, buoyed by an improving economy and the Federal Reserve’s plan to raise interest rates next year. […] The ‘Greenback’ will extend gains against most major currencies in 2015.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
Although the Pound Sterling to US Dollar (GBP/USD) exchange rate spent much of Monday’s European session trending in a narrow range, the pairing could experience movement later today following the publication of the US Dallas Fed Manufacturing Activity Index.
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a low of 1.5548
The gauge of manufacturing is believed to have fallen to 9.0 in December from 10.5 in November.
An on-forecast or below-forecast result could lead to modest US Dollar declines.
Over the next couple of days the US reports to focus on include the nation’s Consumer Confidence gauge, Initial Jobless Claims, Continuing Jobless Claims, Chicago Purchasing Manager, Pending Home Sales, Markit Manufacturing PMI, Construction Spending and ISM Manufacturing.
Movement in the Pound Sterling to US Dollar (GBP/USD) exchange rate could also occur as a result of the UK’s Mortgage Approvals and manufacturing reports.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5569.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2763.
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8196.
