USD/GBP Outlook: Busy Week for Dollar vs Pound Sterling on Exchange Rate Markets

October 26, 2014 - Written by James Fuller

STORY LINK USD/GBP Outlook: Busy Week for Dollar vs Pound Sterling on Exchange Rate Markets

At the start of the week, the US Dollar (USD) exchange rate was trading higher against the British Pound (GBP) and other major peers after it continued to find support from last Friday’s US Consumer sentiment data, which had showed that sentiment soared to its highest level since July 2007.

A separate report also showed that housing starts increased more than expected in September.

The USD also found support from an improvement in global sentiment.

USD Exchange Rates Today:

The US Dollar to Euro conversion rate today is 0.78925 USD/EUR.
The US Dollar to Pound exchange rate converts at 1 USD is 0.62153 GBP.
The Pound to Dollar exchange rate is 1.60895 GBP/USD.
The Euro to Dollar exchange rate today is converting at 1.26703 EUR/USD.
The Australian to US Dollar rate today converts at 1 AUD is 0.87874 USD.

Don't forget if you are waiting to find the best exchange rate for a currency transfer, then you're best bet is to set up your future rate order with a foreign exchange broker!

Pound Sterling advances vs US Dollar on FED interest rate speculation

The GBP began the week little changed due to a lack of domestic market moving economic data releases.

The US Dollar then went onto decline against its higher yielding peers as traders continued to speculate over the timing of the Federal Reserve’s interest rate hike.

Following the publication of better than forecast data out of China concerns eased over the health of the global economy, prompting traders to seek riskier higher yielding assets and move away from the safety of the safe haven US Dollar.

Midweek the USD/GBP and USD/EUR gained solidly after it was buoyed by the release of positive US home sales numbers.

Data released by the National Association of Realtors showed that existing home sales increased by 2.4% to 5.17 million in September from the 5.05 million in August.

Economists had been forecasting for a rise of 1%.

Other data released in the session showed that US inflation rose unexpectedly and Mortgage applications increased strongly in the week ending October 13.

After the data was released, the USD advanced to a one-week high.

Pound to Dollar Rate Weakens on BoE Minutes

The Pound Sterling weakened against its major peers on Wednesday after the Bank of England minutes showed that there was no change in its policy.

The minutes showed that policy makers voted 7-2 in favour of leaving interest rates unchanged at 0.5%.

The GBP weakened, as the minutes were more dovish than expected as policy maker’s highlighted concerns over the Eurozone and wider economy for their hesitation.

As the week ended, the US Dollar softened against most major peers as markets were spooked by news that the deadly Ebola virus had been found in New York City. A US doctor who recently returned from West Africa was confirmed to be infected by the virus.

The case is the fourth in the USA. Because of the finding, the US Dollar fell against the Japanese Yen (JPY) and other safe haven assets.

Because of the Ebola scare, the GBP slowed its three-day run of declines against the USD as economists await the release of the latest UK economic growth figures.

Against the Euro, Sterling was little changed. The data is forecast to show that the UK economy expanded by 0.7% in the third quarter of the year after expanding by 0.9% in the second quarter.

Exchange Rate Forecast for Next week:

Next week promises to be a busy one for the US Dollar due to a large number of economic data releases.

Next Tuesday sees the release of the latest US Consumer Confidence report, Wednesday’s Federal Reserve Interest Rate decision and Thursday will see the latest GDP Growth Rate.

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