On Friday the Pound Sterling to US Dollar (GBP/USD) exchange rate recovered from an over 1-month low to hit a high of 1.5551 and Cable’s uptrend could be set to continue next week.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate News: IMF Warns Fed to Leave Interest Rates at Record Lows in 2015, Grexit Fears Decline
Over the course of this week the Pound Sterling to US Dollar (GBP/USD) exchange rate steadily softened as developments in Greece and China stoked demand for safe-haven assets and boosted the US Dollar across the board.
However, before the weekend Greece presented its creditors with workable reform proposals and the Chinese stock exchange began to stage a recovery.
Safe-haven currencies like the US Dollar faltered as a result, giving the Pound a chance to climb.
The US Dollar was also pressured lower as the International Monetary Fund (IMF) slashed its global growth forecast for 2015 to 3.3% from 3.5% – largely due to the first quarter slowdown in the US.
The IMF then cut its growth projection for the US from 3.1% to 2.5%. The institution has issued warnings on several occasions that the US shouldn’t look to increase borrowing costs at the present juncture and this growth downgrade gives their argument more weight.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a low of 1.5362
Pound Sterling Gains on US Dollar (GBP/USD), Australian Dollar (GBP/AUD) after UK Trade Deficit Narrows
Improved risk appetite and pared back Federal Reserve interest rate hike expectations were partly responsible for the gains in the Pound Sterling to US Dollar (GBP/USD) exchange rate, but the UK’s latest trade numbers also had a positive impact.
The trade data also saw Sterling gain on the Australian Dollar (GBP/AUD), Canadian Dollar (GBP/CAD) and New Zealand Dollar (GBP/NZD) over the course of the European session.
Britain’s trade deficit dropped from 1.8bn Pounds to 393 million Pounds in May, the best result since June 2013.
As stated by the Financial Times; ‘The vast improvement in May was a result of imports falling by 1.4bn to 32.6bn, the lowest level since April 2011 […] The most notable falls were imports of ships, which dropped by 0.5 billion and imports of material manufactures which fell by 0.4bn Pounds.’
The positive trade data helped to outweigh the impact of a less impressive domestic Construction Output report for May.
The Pound Sterling to US Dollar (GBP/USD) exchange rate achieved a high of 1.5551
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: UK, US Inflation Data, US Retail Sales and British Employment Numbers Predicted to Impact Currency Trading
Next week the Pound Sterling to US Dollar (GBP/USD) exchange rate uptrend could continue if the UK’s run of influential ecostats impress and bolster Bank of England (BoE) interest rate hike expectations.
Cable could return to trending in the region of the eight-month highs achieved in June if the pace of inflation in the UK accelerates, British unemployment declines or average earnings increase.
Conversely, a return to deflation in the UK would probably drive the Pound lower.
In terms of US news, the reports to be most aware of include Advance Retail Sales and the nation’s own inflation data.
Any reports strong enough to put a 2015 interest rate increase from the Federal Reserve back on the table would benefit the US Dollar.
The Pound Sterling to Euro (GBP/EUR) exchange rate is was trending in the region of 1.3883, the US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8936, the Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1189, the Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5529