The Pound to US Dollar exchange rate ended the week on a relatively flat note after previously soaring on US Dollar weakness, so what’s next for the GBP/USD exchange rate? With key events ahead like UK and US inflation scores and the Bank of England’s (BoE) September policy meeting, there’s plenty of potential for GBP/USD movement.
Pound (GBP) to US Dollar (USD) Exchange Rate Falls Flat After Advance Attempts
The past week’s data has continued its August trend of being better-than-expected for Britain and worse-than-expected for the US. Unsurprisingly, this has strengthened the Pound and weakened the US Dollar.
The US Dollar was completely undermined by ISM’s August Non-Manufacturing PMI, which came in at a six-year-low of 51.4 when it was published on Tuesday.
This caused many investors to give up on the possibility of a September Federal Reserve interest rate hike, despite Fed policymakers maintaining hawkish stances.
However, later in the week GBP/USD weakened again, falling from its best levels as markets began to see Sterling’s rally as overdone. The US Dollar was also boosted slightly by solid jobless claims data on Thursday, and as a result the pair was trending limply by Friday.
What’s Ahead for Pound to US Dollar Exchange Rates?
Next week will be a more vital one for both the Pound and US Dollar, with slews of highly influential UK and US data due for publication throughout the week.
Tuesday’s session will see the publication of Britain’s August Consumer Price Index (CPI) figures, which will be the next vital indication of how inflation has been affected by the Brexit vote – or August’s activity rebound.
Thursday will be the Pound’s most vital day of the week, with the Bank of England (BoE) holding its September policy meeting. It is unlikely that its August stimulus package will be expanded yet, but this will be a source of high speculation in the coming week.
The week’s key US prints include August’s advance retail sales on Thursday, as well as US inflation stats on Friday.
Pound US Dollar Forecast: More Advance Opportunities for GBP USD
The Pound to US Dollar exchange rate has a solid chance to advance in the coming week, particularly if the week’s fresh August data continues the trend of being good for Britain and underwhelming for the US.
Solid UK inflation could send Sterling surging and may even provide support against any BoE-related selloff later in the week.
On the other hand, the US Dollar could be undermined if retail sales and inflation fail to meet expectations, causing Fed rates to fall further. Ultimately, the BoE meeting is the main event for next week’s Pound US Dollar forecast.
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