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Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Soften ahead of UK data

US Dollar Currency Forecast

The Pound Sterling to US Dollar (GBP/USD) exchange rate declined by around -0.22% on Friday morning.

The Pound is generally edging higher versus many of its major peers ahead of British economic data due for publication later on Friday morning. The fractional appreciation may be the result of speculation that the Bank of England (BoE) will look to hike rates once the general election has concluded.

The US Dollar, meanwhile, strengthened versus the majority of its most traded currency rivals on Friday. This is in response to Thursday’s positive labour market data. The ‘Greenback’ (USD) has also gained as a result of damp trader risk appetite amid ongoing geopolitical tensions in Greece.

The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4685.

Yesterday…

The Pound Sterling to US Dollar (GBP/USD) exchange rate declined by around -0.46% on Thursday morning.

After British trade balance data indicated that the deficit widened, despite predictions it would narrow, the Pound softened versus the majority of its most traded currency competitors. Additional declination is as a result of investor reluctance as we draw closer to the general election.

The US Dollar, meanwhile, edged higher versus many of its most traded currency rivals. This can be attributed to minutes from the most recent Federal Open Market Committee (FOMC) meeting which showed some policymakers opted for a rate hike in June. The appreciation has been somewhat laboured, however, given that the meeting came before a recent succession of less-than-ideal data results.

The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4805.

Pound Sterling (GBP) Exchange Rate Declines after Trade Deficit Swells

As the Conservative Party have been using the success of the British economy as a reason to vote for them, the recent trade balance data will come as a real blow. This has also given the Labour Party fuel to surge in the opinion polls, the latest of which gives the Labour Party a very narrow majority. Speculation that this could result in a complete overhaul of policy is weighing on investor confidence, with many reluctant to invest heavily until the election comes to a head.

The UK Trade Deficit was forecast to narrow from £-0.616 billion to £-0.18 billion in February, but the actual result showed the deficit widened to £-2.859 billion. The large decline has been linked to the sliding Euro as British exports are far outstripped by imports.

The Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a low today of 1.4760.

US Dollar (USD) Exchange Rate Edges Higher ahead of Jobs Data

Minutes from the most recent FOMC meeting showed some policymakers dissented from the majority, voting for a June rate hike. Those policymakers argued that domestic data was adjudged to have warranted a sooner-than-expected rate hike. ‘Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting,’ according to minutes of the March 17-18 FOMC session released Wednesday in Washington.

However, the meeting in question came before a recent succession of disappointing data results, with particular reference to jobs data. It is very plausible that there would be less of a divide had the meeting concluded prior to those data publications.

Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Fluctuate

Given that there will be several influential US data publications due later, including labour market data, the Pound Sterling to Us Dollar (GBP/USD) exchange rate is likely to fluctuate. The BoE rate decision also has the potential to provoke changes for the British asset, although most experts don’t forecast any significant changes.

Friday will see GBP/USD volatility with several data publications due for both nations, including the UK Gross Domestic Product estimate and US Monthly Budget Statement

The Pound Sterling to US Dollar (GBP/USD) exchange rate climbed to a high of 1.4886 today.