The Pound Sterling to US Dollar (GBP/USD) exchange rate declined by around -0.15% on Monday morning.
After British housing data produced mixed results, the Pound softened versus the majority of its most traded currency rivals. The main contributing factor to the Pound’s declination is ongoing trader reluctance to invest heavily ahead of the general election.
The US Dollar, meanwhile, edged higher versus some of its major peers as a result of heightened demand for safe-haven assets amid geopolitical tensions in Europe. The appreciation has been sluggish, however, with futures traders paring bets as to the timing of a Federal Reserve rate hike after a recent succession of disappointing data results.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4944.
Pound Sterling (GBP) Exchange Rate Edges Lower on Mixed Data
With the general election fast-approaching, the Pound is struggling to sustain any significant gains. This is due to the fact that this election is being very closely fought and opinion polls have not shown any clear majority. There is a high potential for a hung parliament which would result in a significant change in policy. Investors will continue to show reluctance to invest in Sterling until the conclusion of the election.
Aiding the British asset’s depreciation was mixed results from housing data. On the year, April’s Rightmove House Prices advanced by 4.7% which was below the previous score of 5.4%. April’s Rightmove House Prices gained by 1.6% on the month, bettering March’s 1.0% increase.
‘Record high housing demand and an under-supply of homes have delivered a new all-time high in the price of property coming to market in the month before the election,’ said Miles Shipside, a director at Rightmove, in a statement. ‘The high cost of housing is a big concern for many home-hunters, so the contents of the respective party manifestos and well thought-out sustainable solutions to the lack of affordable housing supply will be high on many voters’ agendas too.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a low today of 1.4908.
US Dollar (USD) Exchange Rate Ticks Higher despite Pared Fed Bets
With mounting concern that Greece will eventually exit the Eurozone, whether on a voluntary basis or by force, trader risk-appetite dampened considerably, the US Dollar consequently strengthened versus some of its major rivals thanks to its safe-haven status.
The gains are unlikely to be sustained, however, until there is a massive improvement in domestic data results. The recent run of disappointing data publications has caused most futures traders to pare the timing for a rate hike, with most now expecting a small increase in September.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Fluctuate
With the US Chicago Federal Reserve National Activity Index due for publication later on Monday, the Pound Sterling to US Dollar (GBP/USD) exchange rate has the potential to fluctuate over the course of Monday’s European session. With that being said, however, the US data is forecast to advance and should it meet with expectations the ‘Greenback’ (USD) is likely to hold gains.
A complete absence of both British and US data on Tuesday is likely to see the GBP/USD exchange rate subject to market sentiment and geopolitics.
The Pound Sterling to US Dollar (GBP/USD) exchange rate reached a high of 1.4984 today.