The Pound Sterling to US Dollar (GBP/USD) exchange rate could advance beyond 1.58 today if the US initial jobless claims number provides cause for concern, but the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold previous declines.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Hits Highest level of 2015 following Dovish BoE Inflation, Growth Comments and US Retail Sales Data
‘Cable’ has been enjoying a bullish run since the UK general election saw the Conservative party secure a surprising outright victory last Friday, and the Pound Sterling to US Dollar (GBP/USD) exchange rate achieved fresh five-month highs on Wednesday.
Early in the European session the Pound was buoyed against its US peer as the UK’s employment report showed a further reduction of slack in the nation’s labour market.
The UK economy added 202,000 positions in the three months through March – slightly less than the expected jobs growth of 225,000 but enough to drive the UK unemployment rate to a seven-year low of 5.5%.
Sterling derived additional support from a stronger-than-predicted increase in average earnings (both including and excluding bonuses).
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a low of 1.5725
While ‘Cable’s initial advance was undermined by the Bank of England’s (BoE) inflation report (which contained surprising negative revisions to growth forecasts for 2015 and 2016) GBP/USD rallied once more during the North American session as the US Advance Retail Sales data left a lot to be desired.
US Advance Retail Sales had been expected to rise by 0.2% in April, but were actually shown to have stagnated.
Although March’s figure was positively revised to 1.1%, the US Dollar posted widespread declines in the wake of the report’s publication.
The Pound Sterling to US Dollar (GBP/USD) exchange rate achieved a high of 1.5812
In the view of economist Guy Berger; ‘The economy needs to pick up steam for the Fed to be really satisfied that we’re leaving the weakness of the first quarter behind us. This puts a lot of pressure on the next month’s number to be very strong to make up for the weakness in April.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – Pound to Hold at 1.38 after Eurozone Growth Data Bolsters Euro
Solid growth figures for both the Eurozone as a whole and some of its largest economies lent the Euro support on Wednesday.
The fact that the pace of consumer price gains in Germany was positively revised gave the common currency an additional boost and the Pound Sterling to Euro (GBP/EUR) exchange rate fell from 1.40 to 1.38 as investors digested an unpalatable inflation report from the BoE.
There are no notable ecostats for the currency bloc scheduled for publication today so the GBP/EUR exchange rate is likely to continue trading in its present range.
Friday sees the release of the UK’s Construction Output numbers. This report, in conjunction with any developments in the Greek bailout negotiations, will be the main causes of Pound to Euro movement before the weekend.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: US Jobless Claims Set to Rise, Could ‘Cable’ Advance Beyond 1.58?
Ahead of the release of the US Initial Jobless/Continuing Claims figures, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.5797 – up 0.4% on the day’s opening levels.
Both unemployment benefits figures are expected to show an increase in applications, a result which would weigh on the US Dollar and push ‘Cable’ beyond 1.58.
Whether or not the Pound manages to hold that level depends on tomorrow’s UK construction report and Industrial/Manufacturing Production figures for the US.
The Pound Sterling to Euro (GBP/EUR) exchange rate is was trending in the region of 1.3831, the US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8754, the Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1418, the Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5798
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