A mixed-bag of domestic data has seen relatively little movement for the US Dollar on Thursday. In general, the American asset has been trending lower as futures traders pared bets as to the timing of a Federal Reserve rate hike; especially since central banks across the world look in no hurry to normalise monetary policy. Meanwhile, the Pound has struggled against its major peers after retail sales data failed to impress.
The US Dollar to Pound Sterling exchange rate is currently trending in the region of 0.6238.
On Wednesday the US Dollar managed to rack up some healthy gains against many of its most traded currency competitors after domestic data printed positively. The Year-on-year Consumer Price Index was forecast to drop from 1.7% to 1.6%, but the actual result for September held at 1.7%. It was important that the score didn’t drop given that the Federal Reserve has set an inflation target of 2.0%.
Further ‘Greenback’ (USD) gains can be attributed to mortgage applications which rose exponentially from 5.6% to 11.6%.
Meanwhile, the Pound had generally depreciated against its rivals on Wednesday after the publication of dovish minutes from the Bank of England’s most recent policy meeting. The minutes indicated that seven of the nine policymakers wanted to hold the benchmark rate for the foreseeable future. The two dissenters were the usual suspects who had called for a rate hike in the two previous meetings, but the overall majority have, once again, ignored their concerns.
The US Dollar to Pound Sterling exchange rate has dropped to a low today of 0.6227.
On Thursday the US Dollar has been relatively static after such a mixed-bag of data confused investors as to which way to go.
Continuing Claims had a good result having declined from 238,900 to 235,100 despite the median market forecast of a drop to 238,000. However, Initial Jobless Claims rose above the market consensus of 266,000 to 281,000, with the actual result reaching 238,000.
The month-on-month House Price Index appreciated above the forecast figure of 0.3%, rising from 0.2% to 0.5%. However, the preliminary Manufacturing PMI for October declined from 57.5 to 56.2.
Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said; ‘The flash PMI provides the first available glimpse into how manufacturing is faring at the national level at the start of the fourth quarter, and presents a mixed picture. The data will no doubt add to the view that policymakers should be in no rush to raise interest rates, with output and order book growth slowing and price pressures easing. On the other hand, sustained strong job creation will raise worries that slack continues to be eroded, which could drive up inflation in the medium term.’
British economic data has printed disappointingly on Thursday which has caused Sterling to tumble against many of its competitors. Yearly Retail Sales were forecast to drop from 4.4% to 3.4% in September, but the actual result fell to 3.1%.
US Dollar to Pound Sterling Forecast to Strengthen
With sentiment towards the Pound dwindling as it sustains a bearish run, it is unlikely that the USD/GBP will weaken on Friday. However, it is fair to say that the British third-quarter Gross Domestic Product data will provoke volatility.
US New Home Sales is also likely to initiate changes for the US Dollar.
The US Dollar to Pound Sterling exchange rate has reached a high today of 0.6250.
UPDATE
The US Dollar to Pound Sterling exchange rate is currently trending in the region of 0.6238.
Whilst traders await domestic data pertaining to both the UK and the US the USD/GBP exchange rate has held in a tight range.
The British third-quarter Gross Domestic Product is expected to slow from 0.9% to 0.7% on a quarterly basis. In the third quarter of last year GDP showed growth of 3.2%, but this year third-quarter growth is expected at 3.0%.
The US New Home Sales will be of most interest to those invested in the US Dollar. The data, due on Friday afternoon, is forecast to drop from 18.0% to -6.8%.
