US Dollar to Pound Sterling Exchange Rate Roundup - 12 to 16 January 2015

January 18, 2015 - Written by James Fuller

STORY LINK US Dollar to Pound Sterling Exchange Rate Roundup - 12 to 16 January 2015

Latest US Dollar vs British Pound Exchange rate Outlook

The US Dollar to Pound exchange rate experienced mixed movement as the currency markets were hit by volatility and as economic data out of the USA suggested that the world’s largest economy may not be as strong as first thought.

On Monday, the US Dollar moved higher against the Pound but was softer against several peers after data released last week showed that wage growth in the world’s largest economy fell last month. The report showed that American hourly earnings made their biggest declines since records began in 2006.

Tuesday saw the US Dollar strengthen against the majority of its peers including the Pound due to the ongoing rout in oil prices, which boosted demand for safe haven assets. Commodity markets have been hit by volatility with copper and iron ore prices also experiencing hefty declines. Sterling was softened in the session after data released by the Office for National Statistics showed that inflation in the UK tumbled to a joint record low level of just 0.5%.

US Dollar Exchange Rate Weakens on Retail Sales

Midweek the USD weakened as data released by the Washington based Commerce Department showed that retail sales in the USA fell sharply in December. Monthly sales declined by -0.9% whilst yearly sales rose by just 3.2%, both figures were well below economist forecasts.

The Dollar then recovered from the previous sessions losses as economists are still expecting that the Federal Reserve will raise interest rates this year despite the release of poor wage growth and retail sales data. The report published on Wednesday showed that retail sales made their biggest drop in 11 months.

Volatility struck the financial markets on Thursday after the Swiss National Bank stunned the world by slashing interest rates and abandoning its cap against the Euro. The surprise move spurred investors to seek shelter in safer assets such as the US Dollar.

Dollar to Euro Exchange Rate Hits Best Level in 11 Years

The US Dollar managed to reach its strongest level in 11-years against the Euro after the SNB announcement plunged the currency market into chaos and prompted investors to flock to the safe haven ‘Greenback’. The US Dollar managed to shrug off data released on Thursday which showed that the number of people who filed for unemployment assistance in the U.S. last week rose to a four-month high of 316,000, compared to expectations for a decline of 6,000.

As the week ended, the USD remained at multi-year highs against the majority of its most traded peers and next week is likely to send the currency higher as a number of risk events are set to occur such as the ECB policy meeting.

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