Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Trend within a Narrow Range ahead of US Inflation Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Wednesday morning.
After surging on Tuesday in response to better-than-expected Consumer Prices, the Pound cooled versus its major peers on Wednesday. The depreciation can be linked to traders buying profits after the upswing opened up some attractive selling positions. With a complete absence of domestic data to provoke changes, the Pound is likely to hold losses versus most of its major peers.
Even positive comments from Monetary Policy Committee (MPC) member David Miles weren’t enough to provoke a Sterling uptrend. Miles suggested that a rate hike could be coming soon. However, many traders have taken these words with a pinch of salt given that Miles will be leaving the MPC before the next vote on interest rates.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5667.
The US Dollar, meanwhile, softened versus most of its currency rivals ahead of inflation data and the publication of minutes from the most recent Federal Open Market Committee (FOMC) meeting. Whilst consumer prices are predicted to tick higher, traders’ opinions are divergent with regards to predicting the tone of the minutes. Certainly, a hawkish tone will see the US Dollar surge versus its major peers as economists prepare for a near-term rate hike. However, the chance of a September rate hike is around 44% which is a large drop from last week’s 50%.
‘I’ll be looking to see if they’re still ‘confident’ that if the data continues on its way, that inflation will move up to their target. They’ve said as long as there’s ongoing improvement in the economy, they expect to get inflation to go back to target,’ said John Briggs, RBS head of strategy. ‘If they don’t have a more forceful tone that they’re ready to raise rates in September, you could see bonds rally on that,’ he added.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5658 to 1.5697 during Wednesday’s European session.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Trend within a Tight Range Despite Falling Crude Prices
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within a limited range on Wednesday morning.
For the remainder of the week there will be several influential British economic data publications with the potential to provoke Sterling volatility. Thursday will see Retail Sales data published, whilst Friday will see Central Government NCR, Public Sector Net Borrowing, PSNB ex Banking Groups and Public Finances data released. With rate hawks scrutinising each individual data publication in an attempt to gauge the timing of a benchmark rate hike, any positive results are likely to cause the Pound to rally versus its peers.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0468.
The Canadian asset is trending lower versus most of its currency rivals during Wednesday’s European session as crude prices decline. During the North American session on Tuesday oil prices rallied. ‘After selling precipitously over the last several days, oil prices were technically stretched and oversold on a near-term basis, leading to a bounce into the close,’ said Chris Jarvis, analyst at Caprock Risk Management. However, the gains were short-lived as crude prices resumed bearishness during Wednesday’s European session. This caused the ‘Loonie’ (CAD) to decline versus most of its currency rivals.
Friday will be of particular interest to those invested in the Canadian asset with several influential data publications due for release. Of particular interest will be the Consumer Price Index which is set to advance in July. Retail Sales data will also have the potential to provoke ‘Loonie’ volatility.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 2.0422 to 2.0474 during Wednesday’s European session.
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