Pound Sterling to US Dollar (GBP/USD) Exchange Rate Breaches 1.52
The Pound Sterling to US Dollar (GBP/USD) exchange rate briefly climbed above the 1.52 level on Wednesday as investors speculated on the likely outcome of the upcoming Federal Open Market Committee policy statement.
Friday’s US growth report, and the belief that it will show a marked slowing in expansion in the fourth quarter, also helped the GBP/USD pairing maintain an even keel in spite of a lack of economic reports for the UK.
US MBA Mortgage Applications data showed a -3.2% decline in the week ending January 23rd following a revised increase of 16.1% the previous week.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading in the region of 1.5192.
Earlier…
The Pound Sterling to US Dollar (GBP/USD) exchange rate gained 0.7% on Tuesday as disappointing US data weighed on interest rate hike expectations.
GBP/USD Exchange Rate Bolstered by Durable Goods Slide
Although UK data failed to impress yesterday, the Pound Sterling to US Dollar (GBP/USD) exchange rate was able to advance following the publication of the US Durable Goods Orders report.
Economists had expected durable goods orders to rebound in December and post a modest gain of 0.3%.
However, November’s decline was negatively revised from -0.9% to -2.1% and goods orders were shown to have fallen by a further -3.4% in December.
This shockingly bad result caused a knee-jerk weakening in the US Dollar and the safe-haven currency fell against several of its most-traded peers.
The Pound Sterling to US Dollar (GBP/USD) exchange rate achieved a high of 1.5195
After the data was published business correspondent Andrew Dewson noted; ‘Durable goods, which are expected to have a working life of more than three years, are a key indicator of underlying economic growth. US orders, which include anything from heavy industrial capital goods to washing machines and food processors, declined on the back of a strong US Dollar. Slackening demand from Europe and some emerging markets weighed on orders.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a low of 1.5152
While the result did see some investors bet that the Federal Open Market Committee (FOMC) might adjust its comparatively hawkish interest rate rhetoric in its upcoming policy statement, other US figures tempered concerns and ‘Greenback’ declines.
The US Markit Services and Composite PMIs came in above expected levels, New Home Sales surged and the US Consumer Confidence Index jumped to 102.9 in January from 93.1 in December.
However, while the headline Services PMI impressed, Markit economist Chris Williamson addressed some concerns; ‘The January manufacturing and services surveys collectively recorded the weakest monthly increase in new orders since the recession, sending a major warning light flashing that growth of demand has continued to slow at the start of the year. The 5.0% annualised rate of GDP expansion in the third quarter certainly looks like a peaking in the pace of expansion, with the surveys pointing to 2.5% annualised growth at the start of the year.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate held gains overnight and was trading in a narrow range amid a lack of UK reports.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
While the upcoming FOMC announcement is likely to be the day’s main cause of Pound Sterling to US Dollar exchange rate fluctuations, investors will also be taking an interest in the US MBA Mortgage Applications figure for the week ending January 23rd.
If the FOMC adopts a dovish tone or hints in any way that interest rate hikes will be delayed until the global economy gets back on its feet, the Pound could push higher against the US Dollar, potentially breaching the 1.52 level and advancing towards 1.53 during the North American session.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5184
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3387
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8815
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1338
