Dollar to Pound: Weekly USD-GBP Exchange Rate Roundup

May 4, 2015 - Written by David Woodsmith

STORY LINK Dollar to Pound: Weekly USD-GBP Exchange Rate Roundup

US Dollar to Pound Sterling Weekly Roundup – April 27 to May 1

At the start of the week, the US Dollar was little changed against the Pound Sterling and other peers after weakening last week. The ‘Greenback’ remained under pressure as a string of domestic economic data releases increased concerns that the US economy is losing momentum. Investors also raised their bets that the Federal Reserve will not hike interest rates until the end of the year. The Pound Sterling remained above the 1.50 level against the US Dollar despite a Confederation of British Industry’s Business optimism index and Industrial Trends Orders report coming in below expectations.

On Tuesday, the US Dollar gained against the Pound following poor UK GDP figures but remained under pressure against other major currencies following the release of mixed PMI data and a weaker-than-expected Dallas Fed manufacturing index report. A weaker than forecast CB Consumer confidence report added to the pressure on the ‘greenback’.

Midweek, the US Dollar was at a two-month low against a number of major peers as investors grew jittery ahead of the Federal Reserve statement which was delivered later in the session. Prior to that, the US currency was weakened by a far weaker than expected GDP report. The rise of 0.2% was well below the preceding quarter’s rise of 2.2%. The poor data increased speculation that the Fed will choose to leave interest rates on hold at current levels for longer. The Pound Sterling advanced against its major peers on Wednesday as data released by Nationwide showed that UK house price growth increased by an annual rate of 5.2% in April. The currency also shrugged off the previous session’s weaker-than-forecast GDP growth data as investors said that they were confident of a strong improvement in the second quarter of the year.

As the week ended, the US Dollar remained under pressure against its most traded peers as positive data released on Thursday was outweighed by the dovish Federal Reserve policy statement released earlier in the week. The Federal Reserve on Wednesday cited weakness in the U.S. economy and said it will take into account labour market conditions, inflationary pressures and expectations of international financial developments to decide on the timing of an interest rate increase. The Pound meanwhile weakened sharply as a manufacturing PMI report missed expectations and as concerns over the outcome of next week’s general election dominated sentiment.

The USD/GBP exchange rate is likely to strengthen next week as the Pound will be under heavy pressure ahead of Thursday’s vote.

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