The US Dollar (USD) to Pound Sterling (GBP) exchange rate firmed but remained near a two-week low as positive Existing Home Sales data countered earlier declines.
Early in the session, the US Dollar was weakened by Chinese data, which showed that the economy expanded at an annual rate of 7.3% in the three months to September, a figure, which was slightly higher than the 7.2%, forecast by economists but lower than the 7.5% recorded in the preceding quarter.
The data means that the Chinese economy grew at its slowest pace since the height of the global financial crisis.
The slowdown in growth weighed upon the US Dollar as economists grew concerned that the US economy could be harmed by the global growth slowdown. Also weighing on the ‘Greenback’ was investor speculation as to when the Federal Reserve will choose to raise interest rates.
The US Dollar then rallied after upbeat US home sales data eased concerns over the health of the nation’s housing market.
According to the report released by the National Association of Realtors, existing home sales increased by 2.4% to 5.17 million units in September the highest level recorded in a year. The sharp rise in sales was attributed to a strengthening labour market and falling mortgage rates.
‘We’re on a pretty stable trajectory. Borrowing costs are pretty contained. The rate of payroll growth is a modest positive for the housing market,’ said the managing director at Janney Montgomery Scott LLC.
The US Dollar also advanced against the Euro after the single currency was weighed upon by reports that the European Central Bank is planning to widen its bond buying scheme to include corporate debt. The plan could take effect as soon as next year and ECB policy makers are set to discuss the plans as soon as December’s policy meeting.
The single currency was also softened by weak unemployment data in Finland and on expectations that Thursday’s Eurozone data will add to signs that the region is sliding closer towards a triple dip recession.
Sterling meanwhile showed little reaction after data showed that U.K. public sector finances deteriorated in September.
US Dollar to Pound Exchange Rate Forecast
The US Dollar is likely to make gains on Wednesday if the latest Inflation data comes in positively and if the latest Bank of England policy meeting minutes come in more dovish than expected.
UPDATE
The US Dollar to Pound Sterling exchange rate is currently trending in the region of 0.6223.
After having firmed up after US existing home sales out performed expectations, the US Dollar is holding its position against the Pound Sterling.
As traders await the Bank of England minutes from their most recent policy meeting, the Pound is generally unmoved against its major peers.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.6197 ,
US Dollar,,Euro,0.7854 ,
US Dollar,,Canadian Dollar,1.1226 ,
US Dollar,,Australian Dollar,1.1362 ,
Pound Sterling,,US Dollar,1.6138 ,
Euro,,US Dollar,1.2733 ,
[/table]
