Pound Sterling to US Dollar (GBP/USD) Exchange Rate Falls Beyond 16-Month Low
The UK’s lacklustre Manufacturing PMI had a lingering impact on the Pound and the Pound Sterling to US Dollar (GBP/USD) exchange rate extended losses over the course of local trading.
The GBP/USD currency pair eventually shed 1.0% to hit its lowest level in 16 months (1.5424 US Dollars per Pound).
In the view of currency strategist Athanasios Vamvakidis; ‘The Pound fell today as the Manufacturing PMI report was consistent with the latest trend in the UK data showing recovery but at a declining pace compared with market expectations. UK data is still good. But given that inflation is also below expectations, we expect the BoE to take its time before raising interest rates.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate held declines even as both the Markit and ISM measures of the US manufacturing sector registered declines.
The Markit index eased from 54.8 to 53.9 while the ISM index hit 55.5 following a previous reading of 58.7. Both gauges remained above the 50 mark separating growth from contraction however, and the general consensus was that the data isn’t influential enough to deter the Federal Reserve from increasing interest rates in the months ahead.
Earlier…
GBP/USD Exchange Rate Hits 1.5473
The Pound Sterling to US Dollar (GBP/USD) exchange rate lost over 0.6% as the European session progressed and the UK’s Manufacturing PMI fell short of forecasts.
The index had been expected to increase from 53.5 in November to 53.6 in December, but it actually fell to 52.5.
With output clearly slowing at the end of 2014, it gives the Bank of England (BoE) greater scope to leave interest rates on hold until at least the second half of 2015.
The Pound Sterling to Euro (GBP/EUR) exchange rate also fell after the report was released.
Earlier…
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell by 0.3% on Friday ahead of the publication of the UK’s manufacturing report for December.
GBP/USD Exchange Rate Edges Lower as 2015 Arrives
The Pound Sterling to US Dollar (GBP/USD) exchange rate lost around a quarter of a cent as we ushered in the New Year and two high profile officials from the Federal Reserve pushed for an immediate increase of interest rates.
Although the US published a mixed bag of economic reports on Wednesday, the US Dollar was still able to close out the year in a stronger position against the majority of its currency counterparts having enjoyed its most bullish 12-months in the currency market since 2005.
The US Dollar to Pound Sterling (USD/GBP) exchange rate achieved a high of 0.6443
On New Year’s Eve, the US initial jobless claims report showed that more people than forecast applied for first time unemployment benefits in the week ending December 27.
The Chicago Fed Purchasing Manager also dropped from 60.8 in November to 58.3 in December. A more moderate easing to 60.0 had been anticipated.
On a month-on-month basis, Pending Home Sales were shown to have increased by more-than-expected in November (0.8% versus the 0.5% forecast) however, the negatively revised -1.2% reading for October took the year-on-year figure lower.
The reports failed to undermine the US Dollar to any serious extent, and the North American currency advanced on the Pound and Euro as the new year dawned.
Some of the US Dollar’s strength was due to the Fed’s Michael Dotsey and Charles Plosser warning of the dangers attached to leaving interest rates at record lows for much longer.
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a low of 1.5511
As stated by strategist Eric Viloria; ‘It has been a good year for the Dollar. It’s experienced broad-based gains, the Fed concluded its quantitative easing programme and signalled that rate hikes are coming. All of these things, along with a positive fundamental outlook and strong economic data, are positive for the Dollar.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
The Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to experience additional movement as the local session continues and Markit publishes its Manufacturing PMI for the UK.
A strong reading could help the Pound recoup some of its recent losses against the ‘Greenback’.
The direction taken by the GBP/USD pairing before the weekend will also be dictated by the run of US reports scheduled for release today, including Construction Spending, Markit Manufacturing PMI and ISM Manufacturing.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5532
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2896
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8298
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.2043
