The Pound (GBP) has fallen by -0.4% against the US Dollar (USD) today, following a major shift in international currency markets.
The Turkish Lira has plunged in value, which has strengthened the comparatively safer US Dollar.
Although the Pound has risen against other peers because of supportive UK GDP data, this hasn’t been enough to cause GBP/USD exchange rate gains.
(Last updated 10th August, 2018)
Can GBP/USD Exchange Rate Recover on UK GDP Data?
After a week of mainly losses in the GBP/USD exchange rate, the Pound (GBP) could advance against the US Dollar (USD) on Friday when UK GDP stats come out.
These initial estimates, covering growth in Q2 2018, are tipped to show a faster pace of economic expansion for the year-on-year and quarter-on-quarter readings.
Evidence of a UK economic expansion before the second half of 2018 could give a much-needed boost to GBP trader confidence.
Friday will also bring a measure of UK Q2 business investment; Sterling could be further supported if the quarterly reading shifts from -0.4% to 0.3% as forecast.
Is GBP/USD Exchange Rate Turbulence ahead on Higher Unemployment Rate?
Looking to next week, the Pound to US Dollar (GBP/USD) exchange rate could turn turbulent when UK unemployment and wage growth data comes out on Tuesday.
June’s readings are predicted to show accelerating wage growth but higher unemployment; there could be GBP/USD exchange rate gains or losses on such results.
On the plus side, GBP traders could take heart with a faster pace of wage growth as this would suggest that the UK economy is strengthening.
Less positively, Pound investors could steer clear of the UK currency if they are concerned about the UK jobless rate increasing from 4.2% to 4.3%.
Future USD/GBP Forecast: Could Higher US Inflation Trigger US Dollar to Pound Exchange Rate Rise?
There is a chance that the Pound (GBP) will rise against the US Dollar (USD) on Friday morning, but the USD/GBP exchange rate could recover shortly afterwards.
Friday afternoon will bring US inflation rate readings for July, which are expected to show a faster pace of price growth for the month-on-month and year-on-year figures.
Higher inflation rates put more pressure on the US Federal Reserve to consider raising interest rates; USD traders are looking for two more rate hikes this year.
The core annual inflation reading is expected to reprint at 2.3%; if this unexpectedly rises then there will be a greater likelihood of a US Dollar advance on the news.
Will US Retail Sales Slowdown Cause USD/GBP Exchange Rate Losses Next Week?
Next week could see US Dollar to Pound (USD/GBP) exchange rate losses on Wednesday, should retail sales readings show an as-expected slowdown.
July’s figures for US sales activity are forecast to shift from 0.5% growth to 0.3% on the month and from 6.6% to 4.4% on the year.
While neither reading would indicate that the retail sector is struggling, signs of a slowdown might spark fears about greater difficulties in the months ahead.
Typical sales activity in July would be for all-around growth, as the retail sector would ideally be benefitting from seasonal jobs and tourist activity.
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