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Dollar to Pound Exchange Rate Today - GBP/USD Forecasts, Predictions & Outlook for 2015

August 31, 2014 - Written by David Woodsmith

Currency News UK: The Dollar to Pound exchange rate (USD/GBP) traded sideways last week, however the Sterling gained slightly against the strong US currency during the course of the week despite a lack of domestic UK economic data.

Looking to the week ahead however, there is a wealth of data publications due, which should enable an interesting week for the GBP/USD pairing.

So where does the US unit fit in today's markets:

- The US Dollar to Australian Dollar exchange rate is trading down -0.04% at 1.07147 USD/AUD.
- The US Dollar to Canadian Dollar exchange rate is trading down -0.08% at 1.08683 USD/CAD.
- The US Dollar to Euro exchange rate is trading down -0.03% at 0.76157 USD/EUR.
- The US Dollar to Pound Sterling exchange rate is trading down -0.11% at 0.60207 USD/GBP.

Next Week’s Forecast for the Pound to Dollar Exchange Rate



The beginning of the week will be fairly quiet for the US by way of data releases; however, Monday will see the Pound volatile to the reactions in the market caused by UK Net Consumer Credit, Net Lending Secured on Dwellings, Mortgage Approvals, and Markit Manufacturing Purchasing Managers Index figures. If the UK economy can prove productive in these statistics Sterling may be able to gain further in the USD/GBP exchange rate.

Tuesday will see the release of the Bank of England’s Inflation Report for the upcoming 12 months. Any statements from the Bank of England are currently scrutinised heavily as wage growth fails to grow at the pace it should, and the UK economy seems to go through phases of performing well, and then appearing to highlight slack. However, the Bank of England is speculated amongst experts to be the first of the developed nations to raise interest rates since the great recession in 2008. The current debate as to if the US or UK will be the first to witness interest rate hikes has been prominent for some time; however, most now expect a UK rate hike in the first quarter of 2015.
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Expert in the field Sarah Hewin stated: ‘We are getting a similar rhetoric from policymakers in both economies. They have made clear they don’t want to act in a hurry. But the pace of activity is probably stronger in the UK than in the US and we are seeing a faster decline in the unemployment rate in the UK.’

Bank of England Governor Mark Carney has been inconsistent in his attitude for interest rate hikes; on the one hand you have the excited schoolboy in the playground telling his friends interest rate hikes could happen for Christmas; on the other a reined in dovish Governor who suggests ‘limited and gradual’ will lead the way in which the interest rate hikes take place. Last week Carney also caused hype when he stated that wage growth wouldn’t need to expand in order to justify a rise in interest rates. Carney initially caused the Pound to jump to near six year highs versus the US Dollar after his statement hinting that the possibility of rate hikes this year was on the table. Economist Michael Saunders commented: ‘The case for a Q4 hike is much less clear-cut than we previously judged, especially given that average earnings and CPI data are unlikely to provide a trigger for action.’

Tuesday will also see the release of Markit Construction PMI for the UK and the US ISM Manufacturing figures. The Bank of England will release their Rate Decision and Asset Purchase Target on Thursday which are presently expected to stay the same whilst the US will see the publication of ISM Non-Manufacturing Composite.

Friday will finish off the week with influence for the US Dollar by way of US Change in Non-farm Payrolls and Unemployment Rate which is likely to prove highly significant for the ‘Buck’ if the slack in the labour market continues to tighten.
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