GBP/USD Exchange Rate News and Short-Term Forecast
Over the last month the Pound Sterling to US Dollar exchange rate has been stuck trending in a fairly narrow range, moving between lows of 1.5435 and highs of 1.5677.
Mixed economic reports from both the UK and US, a dramatic selloff in commodities and global economic concerns have conspired to prevent the Pound climbing through or falling below significant resistance levels. It may take a notable shift in sentiment toward either Bank of England (BoE) or Federal Reserve interest rate hike projections in order for the GBP/USD pairing to experience substantial movement.
Recent comments from Monetary Policy Committee (MPC) member Kristin Forbes managed to bolster demand for Sterling as they implied that keeping borrowing costs at record lows for much longer could prove damaging to the UK economic recovery. If other policymakers start signaling that they also see risks attached to leaving interest rates unrevised, the hope of a rate hike taking place around the turn of the year may help the Pound advance on rivals like the US Dollar and Euro. Upcoming UK data releases, particularly inflation and employment numbers, will be closely attended to as how they print is likely to dictate how members of the MPC vote at future BoE policy meetings.
Investors will be keeping a similarly close eye on US ecostats as the Fed has frequently asserted that interest rate policy will be decided based on the performance of the domestic economy. However, even if US data prints in line with, or above, expected levels, the current economic slowdown in China might deter the Fed from tightening policy until the first quarter of next year. Any hints to that affect would weigh on demand for the Greenback and give the Pound the opportunity to move back towards the 1.57/1.58 highs achieved earlier in the year.Posted In : Announcements, UK, USA