Foreign exchange markets witnessed a positive run in the British pound to dollar conversion rate's performance last week. The sterling (GBP) staged its second consecutive trading week of gains on the USD as weak US data weighed on investors who were already put off by a dovish Federal Reserve.
Monday's afternoon trading session saw the pound sterling dominate a majority of its currency peers including the US dollar (USD), South African rand (ZAR), Hong Kong, Australian & Canadian dollars (HKD, AUD and CAD).
The gains in the British pound to dollar exchange rate have stemmed from the recent speech made by UK Home Secretary Theresa May, who was making her debut for the ‘In’ campaign.
May was supportive of the UK remaining a part of the EU, arguing that the nation could take a strong role in deciding the course of the multinational union.
With expectations pointing towards a decrease in US New Home Sales in April demand for the US dollar exchange rates remained weak on Monday, particularly given the recent trend of disappointment in the domestic housing market.
As a result the British pound to dollar exchange rate trended higher, with referendum optimism continuing to bolster the appeal of the Pound.
After a brief risk-sentiment inspired drop last Monday, the <a href="/Pounds-to-Dollars-currency-conversion-page.html">GBP/USD</a> largely advanced over the previous week and overly-negative US data reports have done little to reduce sterling's demand.
Decreased Brexit bets have also helped the GBP exchange rates advance.
Before the weekend the pair trended in the region of 1.4347, having enjoyed a healthy gain of around 130 pips throughout the week.
The GBP to USD exchange rate briefly hit a 3-week best conversion of 1.4435 on Thursday.
As markets resumed for a new trading week, cable edged lower s Brexit fears creep back into the foreign exchange investor mindset.
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Latest Pound/Dollar Exchange Rates
On Monday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.858
Today finds the pound to euro spot exchange rate priced at 1.166.
At time of writing the pound to pound exchange rate is quoted at 1.
Please note: the FX rates above, updated 6th May 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Pound Sterling (GBP) Exchange Rates Up on Lowered ‘Brexit’ Concerns, US Dollar Hit by Poor Data
Following recent dovish statements from Federal Reserve Chairwoman Janet Yellen and other Fed policymakers – which indicated that key interest rates would be hiked slowly in response to global economic issues – investors have become increasingly put off the ‘Greenback’.
The US Dollar’s fall was assisted by this week’s datasets, including housing figure, crude oil inventories, and a Philadelphia manufacturing survey, which all printed below-expectations. The only good surprise was jobless claims data.
Sterling, on the other hand, had experienced a surprisingly bullish week following the release of new polls which indicated a stronger turnout for the EU referendum’s ‘Remain’ voters.
As financial markets prefer a less uncertain economic future, the Pound gained from hopes that Britain’s economic and trade relationships would remain the same.
GBP to USD Exchange Rate Forecast: Investors Anticipate Wednesday’s UK Q1 GDP
Some investors may expect to behave a little more naturally on the Pound next week, as data is a little busier and confidence has returned to the currency following its bearish run in March.
UK data starts off the week with Monday’s relatively low-influence April CBI reports, followed by more influential BBA mortgage approvals data on Tuesday morning.
While investors are more likely to settle ahead of Wednesday’s key releases, the BBA score printing well above or below expectations could influence GBP movement.
Quarter 1’s UK Gross Domestic Product releases on Wednesday morning, alongside February’s index of services reports.
The quarter-on-quarter GDP report is currently forecast to slow from 0.6% to 0.5%, while the vital year-on-year print is tipped to remain steady at 2.1%.
Friday will see the latest consumer confidence survey released. Unexpectedly low results from GDP or consumer confidence could significantly hurt Pound sentiment after one Bank of England (BoE) policymaker suggested he might vote to raise rates following optimistic data.
US Dollar (USD) Exchange Rates to Face Volatility on Consumer Confidence, FOMC Decision and UK GDP
There’s nothing like a week filled to the brim with vital data releases to influence currency movement, and the US Dollar looks set to make some inspired movements in the coming week.
The US session kicks off a relatively calm Monday, largely focused on March’s new home sales reports which are currently forecast to have improved from 512k to 525k.
Tuesday will be comparatively packed with a large variety of important releases, including but not limited to preliminary March figures for durable goods orders (predicted to improve from -2.8% to 1.02%), as well as April reports for Preliminary PMI and consumer confidence.
March’s consumer confidence scored 96.2.
Wednesday’s session will also be considerably important, with MBA mortgage applications, home sales data, crude oil inventory figures and the Federal Open Market Committee’s (FOMC) latest race decisions rounding off the day.
After a dovish but confident air has been adopted by many Federal Reserve officials in the past month, investors are likely to highly anticipate the FOMC rate decisions to discern whether or not the next rate hike will take place soon.
The rate is currently expected to be frozen, but the central bank will likely indicate the level of progress the US economy is making.
Thursday and Friday see the releases of annualised US GDP and personal consumption reports, as well as fresh employment data and personal income figures. The week will be rounded off by the latest Baker Hughes US rig count.
British Pound vs US Dollar Conversion Could Plummet if US Data Proves Positive
The Pound has sailed upward in the past week with a near-complete lack of positive data backing it up and only EU referendum optimism helping it out.
That sentiment towards the Pound may not last if news pointing towards a ‘Brexit’ hits headlines, or UK data continues to be pessimistic.
The biggest inspiration in GBP/USD exchange rate movement will be the US heavy data week however. A series of positive data releases to fix recent ‘Greenback’ weakness would certainly weigh on the sterling.
However if the Federal Reserve hints at an even smaller interest rate hike forecast during the FOMC decision, it is likely to disappoint investors so much that it could offset any potential US data gains - and may even allow the Pound to continue its current GBP/USD advancements.
Scotiabank's analysts suggest the current pound to dollar exchange rate push higher could be limited as the overall trend remains negative:
"In broader terms, we think Cable remains in a range."
"Even though the GBP has performed relatively well this week, price action through the end of the week suggests still significant resistance in the 1.4400/50 area while trend strength signals are not aligning in a way that would suggest – at this point – that a sustainable move higher is developing."
Key GBP/USD and EUR/USD Impacting Events in This Week's Forex Calendar
This week's key USD-related events include the US New Home Sales (source), Core Durable Goods Orders, Durable Goods Orders, S&P/CS Composite-20 HPI (source), Flash Services PMI (source), CB Consumer Confidence (source), Richmond Manufacturing Index (source), Goods Trade Balance (source), Pending Home Sales, Crude Oil Inventories, FOMC Statement (source), Federal Funds Rate, Advance GDP, Unemployment Claims (source), Advance GDP Price Index, Natural Gas Storage, Core PCE Price Index, Employment Cost Index, Personal Spending, Personal Income (source), Chicago PMI (source), Revised UoM Consumer Sentiment (source) and the Treasury Currency Report (source)