USD/GBP, USD/EUR Exchange Rates Trend Higher
With economic reports for the US lacking so far this week, both the US Dollar to Pound (USD/GBP) and US Dollar to Euro (USD/EUR) exchange rates have been trending in a narrow range.
The US Dollar spent Monday and Tuesday steadily recouping the losses sustained following the publication of a disappointing US Non-Farm Payrolls report on Friday.
While the US unemployment rate declined, the nation added fewer positions than forecast and wage growth underperformed.
However, investors have since speculated that the slightly soft report won’t deter the Federal Reserve from increasing interest rates early next year.
Weakness in the USD/GBP exchange rate also persisted on Monday as the market dwelt on Friday’s sub-par UK trade data.
Meanwhile, the USD/EUR exchange rate was able to advance on European Central Bank (ECB) stimulus speculation.
On Tuesday the Pound received a modest boost in the form of a better-than-anticipated Like-for-Like sales report from the British Retail Consortium, but gains were modest ahead of the publication of the UK’s employment figures and quarterly inflation report.
US Dollar to Pound Sterling Exchange Rate Volatility Forecast
On Wednesday the US Dollar to Pound Sterling (USD/GBP) exchange rate continued trending in the region of a 14-month high as investors speculated on the likelihood of the Bank of England’s (BoE) quarterly inflation report containing negative revisions to its growth and consumer price gain forecasts.
The expectation that today’s UK wage growth data will fall short also left the Pound struggling.
Meanwhile, the US Dollar to Euro (USD/EUR) exchange rate was able to advance off the back of a disappointing Wholesale Price Index for Germany.
The measure of wholesale price inflation fell by -0.6% on the month in October, adding to concerns that consumer price inflation across the Eurozone declined for another month.
USD/GBP, USD/EUR Exchange Rate Predictions
In the hours ahead the US Dollar to Pound Sterling (USD/GBP) and US Dollar to Euro (USD/EUR) exchange rates could experience fluctuations in response to the publication of several key reports.
USD/GBP movement will be dictated by the UK’s employment and wage growth figures as well as the all-important BoE inflation forecasts.
The direction taken by the USD/EUR pairing in the hours ahead could be decided by the Eurozone’s Industrial Production report for September. If industrial output is shown to have fallen in September, month-on-month, rather than gaining the 0.7% forecast it would put the Euro under pressure.
Over in the US, the only economic report to focus on is the nation’s Wholesale Inventories report for September.
Investors will also be looking ahead to Friday’s far more influential US Advance Retail Sales stats.
UK Wage Growth Improves, Pound Buoyed
While the US Dollar to Pound Sterling (USD/GBP) exchange rate was little changed following the publication of the UK’s employment figures, the Pound was able to trend higher against several of its other main peers.
The US unemployment rate failed to decline to 5.9% as forecast as the UK added fewer positions than expected.
However, there was good news as average weekly earnings in the three months to September were shown to have risen by 1.0%, beating expectations for a more modest gain of 0.8% and bringing earnings closer to the rate of inflation.
The US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 1.5929 after the report was published.
BoE Inflation Report Triggers Pound Losses
As the European session progressed the US Dollar to Pound Sterling (USD/GBP) exchange rate rallied by over 0.2% as the Bank of England delivered a dovish quarterly inflation report.
The central bank pared back its inflation expectations and made the prospect of a UK interest rate adjustment occurring before late 2015 seem increasingly remote.
The US Dollar to Euro (USD/EUR) exchange rate was also able to extend gains as the Eurozone’s industrial production report fell short of forecasts.
The US MBA Mortgage Applications report had little impact on either the GBP/USD or EUR/USD exchange rates.
Mortgage applications were shown to have fallen by -0.9% on the month in the week ending November 7, following the previous decline of -2.6%.
US Initial Jobless Claims Ahead
Prior to the publication of the US initial jobless and continuing claims figures, the US Dollar to Pound Sterling (USD/GBP) exchange rate continued trending in the region of a 14-month high.
The US Dollar to Euro (USD/EUR) exchange rate, on the other hand, eased lower as the European session began on Thursday.
If today’s jobs figures indicate that the US labour market is still performing strongly, the US Dollar could recoup ground against the Euro and extend gains against the Pound.
US Jobs Data Disappoints
The US Dollar to Pound Sterling exchange rate is currently trending in the region of 0.6351.
The US Dollar to Euro exchange rate is currently trending in the region of 0.8010.
The Pound Sterling has continued to trend lower against nearly all of its major peers on Thursday after housing data disappointed. With an absence of data to curb the trend, the Pound has struggled to avoid a bearish run.
Despite a dovish report from the European Central Bank, the Euro has managed to continue advancing against the majority of its most traded currency rivals. This is as a result of the fact that the report emulated words expressed many times by ECB President Mario Draghi regarding Eurozone stimulation.
The US Dollar has extended its bearish run on Thursday after labour market data disappointed. Continui9ng Claims was forecast to decline from 2,356,000 to 2,349,000, but the actual result increased to 2,392,000. In addition, Initial Jobless Claims was forecast to rise from 278,000 to 280,000, but the actual result eclipsed the median market prediction having reached 290,000.
US Retail Sales Due, Dollar Movement Likely
With the week’s biggest US news, the nation’s Advance Retail Sales report, due out in a few hours, US Dollar movement can be expected today.
If sales are shown to have increased by 0.2% in October, as forecast by economists, the US Dollar could climb. Sales dropped by -0.3% in September.
Demand for the US Dollar could also be affected by the University of Michigan Confidence index. The gauge is believed to have risen from 86.9 to 87.5.
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,0.6279,
US Dollar,,Canadian Dollar,1.1327,
US Dollar,,Euro,0.8021,
US Dollar,,Australian Dollar,1.1492,
US Dollar,,New Zealand Dollar,1.2796,
Canadian Dollar,,US Dollar ,0.8829,
Pound Sterling,,US Dollar,1.5922,
Euro,,US Dollar,1.2464,
Australian Dollar,,US Dollar,0.8707,
New Zealand Dollar,,US Dollar,0.7848,
[/table]
