- Pound Sterling has risen today due to Parliamentary recess ending
- Potential for key UK issues (steel, taxes, ‘Brexit’) to be discussed
- US Dollar soft today as Chinese data disappoints investors
- Weekly Forecast: UK inflation and BoE decision to cause major movement
The Pound (GBP) has excelled against its peers today, although this comes at a time when UK economic data is extremely thin on the ground. Meanwhile, the US Dollar (USD) has lost out overall, owing to recent economic weakness from China.
UK Economic News: Taxes and ‘Brexit’ Leaflet on the Agenda as Recess Ends for Commons
The Pound (GBP) has risen notably against almost all of its major peers today, with only a slight dip against the Russian Ruble (GBP/RUB) and the Turkish Lira (GBP/TRY), with a greater loss against the South African Rand (GBP/ZAR).
In a notable development, the Pound has been able to advance today in spite of having no domestic data to refer to; the recent uptrend is therefore thought to be on account of the Easter recess period for Parliament ending.
A great deal of developments within and without the UK have arisen during this recess, therefore political spectators will be eager to see what the first point of order is for the House of Commons.
Among the topics in question, the Commons will likely be addressing the still uncertain state of the UK’s steel industry, the viability of asking every political figure to publish their tax returns and the controversial pro-EU leaflet that has cost the taxpayer around £9m.
The tax issue is likely to dominate proceedings, given that the Prime Minister is by no means out of the woods when it comes to scrutiny over his financial past with trust funds.
Pound Sterling gains today have included 0.8% against the US Dollar (GBP/USD) and 0.9% against the Japanese Yen (GBP/JPY) and the Swedish Krona (GBP/SEK).
US Dollar (USD) Slumps as Chinese Inflation Fails to Excite Investors
The appeal of the US Dollar (USD) has been diminished lately, on account of both the lack of domestic data and the disappointing outcome of the recent Chinese inflation rate result on the year in March.
Although a rise from 2.3% to 2.4% was forecast, the reality saw a stagnation at the former figure, which raised yet more questions over how much the Federal Reserve is bound by the undulations of the Chinese economy.
One of the only US economic events that has taken place so far has been the apparent meeting of US President Barack Obama with Fed Chair Janet Yellen in the White House, in order to discuss the current state of the US economy as well as Yellen’s outlook for the near-future.
US Dollar losses today have included -0.7% against the Pound Sterling (USD/GBP) and the Polish Zloty (USD/PLN) and -0.9% against the South African Rand (USD/ZAR).
Future GBP, USD Forecast: Fed Speeches due in Near-Future, UK Inflation Stats Out Tomorrow
For the UK, the next economic announcement expected to cause an impact will be tomorrow morning’s inflation rate results for March. At the time of writing, forecasts were for an advance on the month and the year, as well as an increase in the figure for the core annual data.
Additionally, later on in the morning will be the announcement of the Office for National Statistics house prices results on the year in February, which previously recorded a 7.9% rise.
Finally, the Pound can be expected to be moved in the near-future by any major resolutions that stem from debates in the House of Commons, although these may not arrive until Wednesday during Prime Minister’s Questions.
The US is expected to have a more concrete source of exchange rate movement in the future, with influence coming from this afternoon’s scheduled Fed speeches from officials Robert Kaplan and William Dudley.
Adding to this impetus for movement will be tomorrow’s expected Fed speeches, this time from Patrick Harker, John Williams and Jeffrey Lacker.
Finally, tomorrow’s US economic announcements will be capped off by the March monthly budget statement, which is forecast to show a decline from -52.9bn to -104bn.
Current GBP, USD Exchange Rates
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.4232 and the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.7027 today.
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