The Pound Dollar exchange rate forecast:
The Pound Sterling (currency:GBP) was confined to relatively narrow trading ranges through the course of the day, as markets continued to react following the sharp gains this week. There was an element of pressure for a correction after the rapid spate of gains, but the potential for another crack at the 1.70 GBP/USD level for the Pound Dollar exchange rate continued to attract solid buying support. There was further speculation that the Bank of England would be forced into taking policy action to help cool the housing market. There would be the potential for direct measures to curb demand, which in theory, would lessen the pressure for higher interests. With inflation falling below 2% and continuing to fall, there is no pressure on the MPC to begin raising interest rates from 0.5% record low level.
The latest important Pound Sterling and US Dollar exchange rate are as follows: (Updated 19:00 09/05/2014)
- The Pound Dollar exchange rate is trading down -0.5% at 1.68490 GBP/USD..
- The Euro Dollar exchange rate is trading down -0.63% at 1.37550 EUR/USD.
- The Dollar Euro exchange rate is trading up +0.64% at 0.72701 USD/EUR.
- The Dollar Pound Sterling exchange rate is trading up +0.51% at 0.59351 USD/GBP.
The Committee will meet today with markets expecting no policy changes to interest rates or quantitative easing. The underlying impact is likely to be limited unless there announcement is accompanied by a statement, as markets will wait for the MPC minutes to be released later in the month. There some UK data released overnight with the RICS house price index recording a slight cooling of price increases in April, although the number of surveyors reporting higher prices was still above 50%.
The economic data released in the Euro-zone yesterday offered little in the way of support with much weaker-than-expected data releases for German factory orders and French industrial production. The overall market impact was limited, however, and the Euro consolidated below the 1.3950 level against the Dollar with a degree of trepidation in pushing the rate any higher. There was an overall mood of caution ahead of Thursday’s ECB policy meeting and Draghi’s press conference with consensus expectations that the central bank would resist any moves at the meeting. In the U.S, the Fed Chairman Janet Yellen’s initial comments to the Senate banking committee were broadly negative with a continued commitment to keeping interest rates at very low levels for some time, after quantitative easing had been concluded.
Data Released 8th May 2014
U.K 12:00 BoE Interest Rate Announcement
EU 12:45 ECB Interest Rate Announcement
EU 13:30 ECB Press Conference
U.S 13:30 Initial Jobless Claims (w/e 3rd May)
Pound to Dollar Exchange Rate - Important Update 09/05/2014
Earlier this week the UK’s impressive service sector report gave the Pound a considerable boost and pushed the GBP/USD pairing to multi-year highs.
Pound Sterling broadly strengthened as signs that the UK’s economy had a strong start to the second quarter increased speculation surrounding the Bank of England raising interest rates sooner than projected.
The Pound Euro exchange rate also jumped to a nine-week high.
However, after the Bank of England left fiscal policy unaltered at Thursday’s meeting and US initial jobless claims were shown to have fallen by more than anticipated, the GBP/USD exchange rate started edging lower.
On Friday profit taking on the part of investors and speculation that Sterling’s rally may have been overdone saw the Pound reverse some of its recent gains against the US Dollar.
Declines in the Pound to Dollar exchange rate (GBP/USD) pairing were also triggered by the news that UK industrial production declined in April while construction output unexpectedly dropped in March.
Manufacturing production did increase by more than anticipated last month, but the 0.5 per cent gain was considerably lower than the 1.0 per cent advance forecast.
Before the close of local trading the Pound to Dollar shed 0.5 per cent. It’s decline was the most significant for three months.
In the view of one industry expert, ‘The market is getting overextended and we are seeing a broad-based recovery in the Dollar. The Dollar got a boost because of the reaction to the ECB’. [The central bank indicated that the Governing Council would introduce additional stimulus next month].
Next week the biggest cause of Pound Dollar exchange rate movement may be the UK’s employment report. Another strong result would add to the case for the Bank of England increasing interest rates before the second quarter of next year.
US inflation and advance retail sales figures will also be of note.
The Pound Sterling to US Dollar exchange rate is trading down -0.5% at 1.68490 GBP/USD.