Durable Goods Orders Push US Dollar Up
While UK Chancellor George Osbourne’s Autumn Statement was more positive than investors had feared, Pound Sterling is trending down against the US Dollar. US economic data yesterday was not as overwhelmingly positive as expected, but large growth in Durable Goods Orders has seen some movement against Pound Sterling, although the ‘Buck’s (USD) performance is mixed across the board.
While the mostly positive US news yesterday caused the US Dollar to appreciate, the releases came right before today’s Thanksgiving holiday, which has seen the markets closed. The ‘Buck’ (USD) is currently slightly up against GBP, but the pairing is unlikely to see any significant movement until Friday, when UK data is released.
Earlier…
The Pound Sterling to US Dollar (GBP/USD) exchange rate is experiencing a slow decline today as traders hold back before a glut of US data is released later. The high impact data could see the ‘Buck’ (USD) turn bullish as Pound Sterling suffers from the potential fallout of George Osbourne’s Autumn Statement.
GBP/USD Exchange Rate Forecast: Pound Sterling Slides as George Osbourne Gives Autumn Statement
Pound Sterling slumped following last Friday’s announcement of a deficit in public finances, which throws into question the likelihood of George Osbourne hitting his 2019 target of a £10 billion surplus. Many economists believe this is unlikely, with the Centre for Economics and Business Research (CEBR) instead forecasting a £20 billion deficit.
While negative news from the Autumn Statement is likely to have a significant impact upon Pound Sterling, which is already suffering from yesterday’s dovish comments by members of the Monetary Policy Committee (MPC), Guardian associate editor Martin Kettle has argued that the plans announced in the Autumn Statement are given too much credence.
He writes that: ‘Unlike the annual budget, the autumn statement and the spending review are recent inventions: the autumn statement dates from 1976; the spending review only from 1998. Neither of them is an ordained or ancient part of the way UK government works,’ adding that ‘The spending review is about the assertion of political power — the chancellor’s power — not economic strategy.’
The GBP/USD exchange rate is currently trending up 0.1% in the region of 1.5059.
USD/GBP Exchange Rate News: Traders Pause Before Big US Data Dump
The economic calendar is dominated this afternoon by US data. Durable Goods Orders for October are expected to increase by 1.5% after posting a -1.2% fall in September. Personal Consumption Expenditure Core is also expected to rise to 1.4%. While Initial Jobless Claims are forecast to remain steady, Continuing Claims are predicted to fall to 2140k and Personal Income could rise 0.4%. This afternoon also sees housing market data, Markit PMIs and the University of Michigan Confidence Index.
The US Dollar is already bullish against several currencies, advancing 0.6% on the Euro (EUR) and the Polish Zloty, while rising 0.5% against the Swiss Franc (CHF) and the South African Rand (ZAR).
The USD/GBP exchange rate is currently trading between 0.6616 and 0.6641.
GBP/USD Exchange Rate Forecast: Further Budget Cuts Could Cause Pound Slump
The US Dollar is making slower gains against Pound Sterling as traders wait for news from the UK’s Autumn Statement and the figures from this afternoon’s US data releases. Heightened UK austerity and positive data for the US could see the GBP/USD exchange rate plummet.
The GBP/USD exchange rate is currently trending between 1.5052 and 1.5114.
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