Can Rising Production Figures Push GBP/USD Exchange Rate Higher?
The Pound (GBP) has risen by 0.3% against the US Dollar (USD) today, hitting an exchange rate of $1.3327.
This is the best level of trading since mid-June and has surprisingly been caused by the David Davis’ resignation as Brexit Secretary.
Looking beyond today’s drama, the GBP/USD exchange rate could next be affected by UK production figures due for release on Tuesday morning.
These ecostats will cover manufacturing, industrial and construction sector output and are all predicted to show improving performances in May.
Better manufacturing and construction readings in particular could boost the GBP/USD exchange rate, as they might lead to higher UK PMI readings in July.
Is Pound Sterling to US Dollar (GBP/USD) Exchange Rate Rise ahead on UK Earnings Data?
After this week’s UK economic data has come out, the next major source of GBP/USD exchange rate movement could be UK jobs market stats out on 17th July.
These readings are predicted to show a faster pace of wage growth during May, but an additional unemployment rate rise from 4.2% to 4.3%.
Accelerating wage growth might be enough to prevent any GBP/USD exchange rate losses from higher unemployment, as it would make the case for higher interest rates.
GBP traders are currently pricing in a Bank of England (BoE) interest rate hike as soon as August; higher wage growth next week would strengthen the case for this.
US Dollar to Pound Sterling Exchange Rate Forecast: Can USD/GBP Recover on Inflation Rate Acceleration?
On the other side of the currency pairing, the next economic news which could affect the US Dollar (USD) will be Thursday’s inflation rate figures for June.
These are tipped to show a faster pace of price growth during the month; such results could cause immediate USD/GBP exchange rate gains.
A faster pace of inflation raises the possibility of the next Federal Reserve interest rate hike coming sooner rather than later.
The Fed has hiked US interest rates twice so far this year and there are hopes that there could be up to four total rate hikes by the end of 2018.
Chance of Greater US Dollar to Pound (USD/GBP) Exchange Rate Gains ahead on Fed Speeches
Sticking with the US central bank, the Federal Reserve, there could also be USD/GBP exchange rate gains this week when Fed officials give speeches.
Policymakers giving comments will include John Williams on Wednesday, Patrick Harker on Thursday and Neel Kashkari and Raphael Bostic on Friday.
Mr Williams and Mr Bostic are the only policymakers who will vote on interest rate decisions this year; they are respectively considered ‘hawkish’ and neutral in outlook.
If both Fed voters (or all four policymakers) back another US interest rate hike soon, then the US Dollar to Pound (USD/GBP) exchange rate could rise sharply.