Dollar to Pound Outlook 2015: USD/GBP Exchange Rate Roundup & FX Forecast

February 1, 2015 - Written by Ben Hughes

STORY LINK Dollar to Pound Outlook 2015: USD/GBP Exchange Rate Roundup & FX Forecast

At the start of last week, the Dollar Euro exchange rate advanced to its best conversion level in 11-years following the election victory for the anti-bailout Syriza party.

The party’s victory has now increased fears about Greece’s future in the Eurozone as its leader Alexis Tsipras pledged to renegotiate the terms of Greece’s €240 billion bailout. Against the Pound the ‘Greenback’ remained at a 17-month high as economists focused on the Federal Reserve policy meeting which held midweek.

Tuesday’s session saw the Pound soften against many of its major currency peers as data showed that UK economic growth slowed more than expected in the fourth quarter of 2014. GDP expanded by 0.5% on a quarter on quarter basis, below economists’ forecasts for a rise of 0.6%. The figure suggests that the UK will experience a slowdown in the first part of 2015. On an annual basis, however the UK economy was shown to have expanded by its fastest pace since the financial crisis in 2007.

Data out of the USA also supported the USD as a number of Purchasing Manager Index (PMI) reports came in better than expected. New home sales data also smashed forecasts adding to confidence that the US economy was back to firing on all cylinders.

The US Dollar to Australian Dollar exchange rate is -0.32 pct lower with a conversion rate of 1 USD equals 1.28121 AUD.
The US Dollar to Brazilian Real conversion rate is 2.69570 USD/BRL.
The US Dollar to Canadian Dollar conversion rate is -0.83 pct lower at 1.25842 USD/CAD.
The US Dollar to Swiss Franc exchange rate is +0.69 pct higher with a conversion rate of 1 USD equals 0.92770 CHF.
The US Dollar to Euro exchange rate today is converting -0.28 per cent lower at 0.88196 USD/EUR.
The US Dollar to Pound Sterling exchange rate converts +0.39 per cent higher at 1 USD is 0.66552 GBP.

US Dollar Surges to Best Exchange Rate Levels

Following the Federal Reserve’s policy meeting midweek the US Dollar surged to record highs against a number of major peers and advanced against the Pound after the Federal Reserve stuck to its ‘slow but steady’ policy. The Fed is now regarded as the only major central bank considering raising interest rates as the Bank of England is now not expected to raise rates until 2016.

On Thursday, the US currency received more support from data, which showed that Jobless claims fell more than expected.

As the week ended, the US Dollar continued its upward advance despite softer than expected GDP data.

‘The 2.6% annualised gain in fourth-quarter GDP was slightly below the 3% consensus forecast but, following the breakneck 5% gain in the third quarter of last year, this slowdown is nothing to worry about,’ said the chief US economist at Capital Economics.

Dollar to Pound Exchange Rate Forecast

Looking ahead to next week and the Dollar to Pound exchange is expected to remain supported. The main event of the week will be Thursday’s Bank of England interest rate decision and Wednesday’s US ADP employment report.

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