Pound Sterling (GBP) Exchange Rate Forecast to Tick Higher against the ‘Greenback’ (USD) ahead of BoE Rate Decision
The Pound Sterling to US Dollar (GBP/USD) exchange rate edged higher by around 0.1% on Thursday morning.
Thursday has been dubbed ‘Super Thursday’ by economists as the Bank of England (BoE) trial a new method of releasing data in order to become more transparent. The BoE Monetary Policy Committee (MPC) convenes to make the interest rate decision as normal, but the minutes from said meeting are released on the day. In addition, Governor Mark Carney will hold a press conference to discuss the central bank’s economic projections. With a large amount of data for traders to digest at once, the Pound is very likely to see heightened volatility.
British data has had a minimal impact on the Pound thus far on Thursday with traders focussed towards the BoE. House Prices and Industrial Production failed to meet with expectations, but Manufacturing Production eclipsed the market consensus.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5619.
US Dollar (USD) Exchange Rate Forecast to Edge Lower against the British Asset (GBP) ahead of US Labour Market Data
In response to Wednesday’s North American economic data, which showed that the ISM Non-Manufacturing Composite bettered estimates, the US Dollar rallied versus its major peers. The ‘Greenback’ is holding a position of relative strength versus its rivals on Thursday amid increasing bets of a Federal Reserve rate hike in September.
US data, due for publication later on Thursday afternoon, has the potential to provoke volatility for the ‘Buck’ (USD). Both Initial Jobless Claims and Continuing Claims will be closely watched by Federal Open Market Committee (FOMC) members given that improvement in the labour market is a prerequisite for policy normalisation.
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low of 1.5591.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Strengthen on MPC Dissenters
Most analysts agree that one or more MPC members will dissent in today’s meeting and call for an immediate rate hike. Should the BoE be as hawkish as most expect, the Pound is likely to rally versus its currency rivals. Therefore, the Pound Sterling to US Dollar (GBP/USD) exchange rate may strengthen. The advance may be somewhat sluggish, however, given that most experts still believe that the Federal Reserve will hike the cash rate first.
The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high of 1.5637 during Thursday’s European session.
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