As Wednesday’s session progressed the Pound to US Dollar (GBP/USD) exchange rate firmed as the UK currency was supported by positive PMI data and comments made by Chancellor George Osborne in his Autumn statement.
On Wednesday the Pound to US Dollar exchange rate remained close to a 14-month low as the ‘Greenback’ found support from increasing speculation that positive data out of the USA will spur the Federal Reserve into raising interest rates sooner than previously forecast.
Pound Sterling to US Dollar Exchange Rate Hit a Session High of 1.569
As Tuesday’s session advanced the Pound to US Dollar (GBP/USD) exchange rate fell to its lowest level in 14-months as disappointing construction data raised concerns that the UK will face headwinds next year.
Earlier on Tuesday, the Pound to US Dollar (GBP/USD) exchange rate gave up some of the gains it had achieved on Monday as ISM manufacturing data came in positively and economists continued to raise their bets that the Federal Reserve will raise interest rates next year.
At the start of the week the Pound Sterling to US Dollar (GBP/USD) exchange rate inched higher as economists turned their attention to upcoming manufacturing data and Thursday’s Bank of England (BoE) interest rate decision.
Sterling continued to advance against the ‘Greenback’ as UK PMI data showed that manufacturing activity in the nation increased unexpectedly last month. The report raised hopes that a UK slowdown will not be as severe as previously forecast.
The Pound Sterling to US Dollar (GBP/USD) exchange rate ended last week softer as the US currency remained supported by expectations that the Federal Reserve is edging closer to raising interest rates.
Increased demand for safer assets as oil prices continued to tumble and European data increased fears over a global slowdown, which also impacted the Pound to Dollar exchange rate.
Trade was light as the week ended due to the closure of US financial markets for the Thanksgiving holiday. Sterling softened away from a two-week high as investors embarked upon a bout of profit taking and support from mid-week GDP data eased.
GBP/USD Exchange Rate Forecast to move on Interest Rate Decision
Last week-
Next week promises to be livelier than the week just gone, as there is more in the way of economic data releases due for both the Pound and US Dollar.
At the start of the week, the Pound Sterling to US Dollar (GBP/USD) exchange rate is forecast to see movement because of UK Manufacturing PMI and US Manufacturing Purchasing Managers Index data releases.
Also due that day is UK Mortgage Approvals data, which will show whether Bank of England plans to tighten lending and cool the housing market, are continuing to work.
USD/GBP Exchange Rate Forecast to Advance on UK PMI
The ‘Greenback’ is likely to advance as economists are expecting the UK PMI to ease whilst the US PMI improves.
On Tuesday the US Dollar will likely push higher due to a lack of major market moving UK data. Reports out of the USA include the latest ISM New York Index and Construction Spending data.
Midweek the major UK data release will be a Services PMI report which is likely to show that activity in the UK’s dominant economic sector eased slightly in November.
The US meanwhile will see eagerly anticipated ADP employment figures, which if positive will send the ‘Greenback’ climbing. A disappointing figure however could heighten concerns that the world’s largest economy is facing headwinds.
Thursday is the main event as the Bank of England announces its latest QE and interest rate announcement. The US meanwhile will see the release of the latest jobless claims and challenger job cuts data. The BoE is forecast to leave rates and QE unchanged.
Friday sees a lack of UK data but plenty out of the USA such as wage growth and non-farm payrolls data.
Economists will be watching the data closely as an improvement in wage growth and in the jobs market will cause investors to raise their bets that the Fed is getting closer to raising interest rates.
Pound to US Dollar Exchange Rate Forecast to Fall Further
The Pound is likely to fall further against the US Dollar as the US markets reopen following the Thanksgiving Holiday period.
The GBP/USD exchange rate is likely to remain near a 14-month low before Thursday’s Bank of England Interest Rate decision.
The main data in focus for next week for the US Dollar will be Thursday’s ADP employment report and Friday’s Non Farm Payrolls Data. If those figures show signs of weakening then the Pound could regain ground.
