Pound Dollar Exchange Rate Creeps Higher On Positive US Durable Goods Data

Published: Tuesday, 27 November 2012 15:00 BST - Written by David Woodsmith

STORY LINK Pound Dollar Exchange Rate Creeps Higher On Positive US Durable Goods Data

This afternoon’s US Durable Goods Orders data for October convincingly beat analysts’ expectations to show at 0.0% - not a bad result given that September’s counterpart figure showed at an impressive 9.2%. Commentators had been expecting a contraction of 0.7%. The US Durable Goods Orders numbers have become a highlight of the monthly data schedule in recent years, with analysts looking to them to provide a leading indicator on future confidence levels in the vast American economy. The data measures the change in the level of ‘big ticket’ purchases which are designed to last for more than three years. Traditionally, such purchases are postponed by shoppers and companies if they feel that the future is uncertain.

The better-than-expected American data has seen the GBP USD exchange rate edge higher this afternoon, as risk sentiment continues to improve following last night’s announcement from the EU and IMF that it had rubber-stamped Greece’s next bail-out payment. This has seen GBP USD briefly trade above the 1.6050 level.

If tonight’s Chinese Leading Index data follows the near-term trend of encouraging data sets from the world’s second largest economy, then it would appear likely that there may be further upside in the short term for Cable.

However, all is far from rosy in the global economy, as shown by a report published by the Organisation for Economic Co-operation and Development within the past 24hrs. The report called for swift action by global policymakers in order to stop the world economy being ‘plunged into recession’ once more. The OECD downgraded its 2013 growth forecast for the global economy to 1.4%. As recently as six months ago, the widely respected organisation was predicting that economic activity would increase by 2.2% next year. We are not yet out of the woods, it would seem.

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TAGS: American Dollar Forecasts Currency Predictions Pound Dolla Forecasts