Pound to Dollar Forecast: GBP/USD Breaks Above 1.5100 But Where Next?

January 8, 2015 - Written by John Cameron

STORY LINK Pound to Dollar Forecast: GBP/USD Breaks Above 1.5100 But Where Next?

Currency News Presents Our Latest Exchange Rate Forecasts for the Pound Sterling to Dollar Conversion

Price action in the global currency markets during the past 24hrs suggest that investors remain strongly focussed on central bank actions in order to formulate their trading decisions.

Currency Exchange Markets Focused on Central Banks

Yesterday’s session brought sustained losses for shares markets across the world as investors awaited the latest US Federal Reserve policy announcement.

The pronounced bout of jitters was driven by fears that, in the light of the sharp improvement in America’s jobs market over the past twelve months, the world’s premier central bank might be about to raise its key interest rate.

In the end, they needn’t have worried.

The Fed’s took no action and its assertion that any tightening of its monetary policy before April was ‘unlikely’ helped to settle the frayed nerves amongst investors.

Pound to Aus and NZ Dollar Exchange Rates Plunge

The uptick in global risk sentiment since the Fed’s comments has been evidenced by movement for the VIX ‘Fear Index’ since the comments from its policymakers. VIX was trading at above the psychologically significant 20.00 threshold during the middle part of yesterday, but the early part of today’s equities session has seen the key indicator drop to close to the 17.00 level for the first time this week. The sharp fall in VIX has been accompanied by a significant improvement in the Commodity Dollars on the global currency market.

The Pound Sterling Australian Dollar exchange rate has plunged to as low as 1.8524 GBP AUD during today’s session, while the similarly risk-sensitive New Zealand Dollar has also fared well, sending the Pound Sterling Kiwi Dollar exchange rate down to a fresh near-term low of 1.9246 GBP NZD.

Pound to Dollar Exchange Rate Today

Elsewhere, this afternoon’s disappointing US jobs data could take the edge off global risk sentiment in the short term. There were high hopes that this afternoon’s weekly jobless claims figures would provide further grounds for optimism following yesterday’s strong US private sector employment numbers. However, both of today’s jobs numbers have disappointed, raising investors’ fears that tomorrow’s US Non-Farm Payrolls data may also underwhelm.

The Pound Dollar exchange rate has enjoyed a rare afternoon of gains following the American labour market numbers; the pair broke back above the 1.5100 GBP USD threshold a short time ago having threatened to sink into the 1.4000s earlier on today.

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