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Pound Sterling to US Dollar Forecast: Will Brexit Breakthrough Boost GBP/USD Exchange Rate?

US Dollar Currency Forecast

Chance for GBP/USD Exchange Rate Rise on Progress in Brexit Talks

Pound Sterling (GBP) has held close to opening levels against the US Dollar (USD) today, following the news that UK retail sales have slowed during September.

Last month’s sales figures were worse-than-expected, revealing a decline in month-on-month and year-on-year sales activity when annual growth had been forecast.

The data has had a limited negative impact because summer sales in 2018 were above average, which has made subsequent data less impressive by comparison.

The Pound could break out of currently tight trading and rise against the US Dollar in the near-term, if there is news of a major Brexit breakthrough.

Prime Minister Theresa May has recently suggested that the Brexit transition period could be extended, which implies that key issues have still not been resolved.

November’s deadline is rapidly approaching, so if the PM or EU officials announce a sudden breakthrough then the Pound could rise sharply due to trader relief.

GBP/USD Exchange Rate Outlook: Will CBI Data Cause Pound Sterling Losses?

Looking ahead to the coming week, the Pound (GBP) is at risk of making losses against the US Dollar (USD) on Tuesday’s Confederation of British Industry (CBI) stats.

These will cover industrial activity in October and business optimism for Q4 2018 and might devalue the Pound if they decline as forecast.

Both readings have already printed poorly and an industrial decline from -1 points to -6 and a business sentiment dip from -3 points to -8 could ensure GBP losses.

The one saving grace will be if both readings unexpectedly print positively – such a result could raise trader confidence and push the GBP/USD exchange rate higher.

US Dollar to Pound Exchange Rate Forecast: Will Fed Speeches Cause USD/GBP Rise?

For US Dollar (USD) traders, the next economic data to watch out for will come out today and tomorrow in the form of speeches from Federal Reserve policymakers.

Fed officials are set to give remarks this afternoon and on Friday, and could boost the US Dollar to Pound (USD/GBP) exchange rate if they back interest rate hikes.

Last night’s Fed minutes indicated that policymakers plan to continue raising interest rates in the future, so vocal support could push the USD/GBP exchange rate higher.

Will US PMI Data Cause USD/GBP Exchange Rate Rise?

Next week’s first significant US economic data will be out on Wednesday, consisting of PMI estimates for October.

Current expectations are for a slight dip in overall economic activity via the composite reading, but a converse rise for the services sector reading.

If the composite, manufacturing and services PMIs defy forecasts and rise sharply, the US Dollar to Pound exchange rate could see a similar improvement.

Higher PMI figures open the door to an increase in US GDP, as well as a potentially higher chance of a Fed interest rate hike due to perceived economic stability.