Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Strengthen ahead of US Advance Retail Sales
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.71% on Tuesday morning.
Despite the fact that the Pound initially dived versus its peers following the release of UK inflation data, comments from Bank of England (BoE) Governor Mark Carney have caused the British asset to rally. On the year, June’s Consumer Price Index came in at 0.0%; dangerously close to deflationary territory. Core Consumer Prices declined to 0.8% despite the median market forecast 0.9%. However, the Sterling losses in response to poor inflation data were short-lived after Carney stated that he sees an inflationary pickup towards the end of the year, stoking bets as to a first-quarter rate hike in 2016.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5583.
The US Dollar, meanwhile, softened versus many of its currency rivals despite increased demand for safe-haven assets amid geopolitical tension in Europe. The US Dollar depreciation can be linked to speculation that US Advance Retail Sales, due for publication later on Tuesday afternoon, will produce less-than-ideal results. Additional US Dollar declination can be linked to the ongoing battle between Congress and the Federal Reserve. After it emerged that there was a possible leak of confidential documents from a September 2012 policy meeting, Congress is now asking for Fed transparency, although the independent institution is showing increasing reluctance to cooperate.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5448 to 1.5603 today.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Rally as Crude Prices Tank
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced by around 1.00% on Tuesday morning.
In a speech to the British parliament, Carney stated; ‘The point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counter balanced somewhat by disinflation imported from abroad. If you look at historic rate cycles in the United States relative to the UK, the average US rate cycle raises interest rates by about 3 percentage points. The largest UK rate cycle since the adoption of the inflation target is an upward move of 150 basis points.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9933.
The Canadian Dollar, meanwhile, dived versus most of its peers as crude oil prices continue to drop. With Iran close to negotiating terms for removing international sanctions on exports in return for curbs on its nuclear program, there is the very real potential that oil prices will dive further as the holder of the world’s fourth-biggest crude reserves adds to global oversupply. As a currency with a close correlation to the value of oil, the ‘Loonie’ (CAD) is likely to remain bearish for some time to come. This has prompted speculation that the Bank of Canada (BOC) will intervene after four consecutive months of economic contraction.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 1.9695 to 1.9959 during Tuesday’s European session.
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