FX News Now: US Dollar to Pound Sterling (USD/GBP) Exchange Rate Weekly Roundup ? June 15 -19

June 20, 2015 - Written by Admin

STORY LINK FX News Now: US Dollar to Pound Sterling (USD/GBP) Exchange Rate Weekly Roundup ? June 15 -19

FOMC Rate Decision Drives USD to GBP Exchange Rate to Multi-Month Low

The US Dollar to Pound Sterling (USD/GBP) exchange rate was heavily influenced by the Federal Reserve’s policy statement which was released midweek. After a run of mixed economic data releases the statement was more dovish than expected and has increased speculation amongst economists that an interest rate rise will not occur until later in the year.

The US Dollar to Pound Sterling (USD/GBP) exchange rate traded in a range of 0.6428 to 0.6280 last week

At the start of the week, the US Dollar was firmer against it major peers as economists were optimistic that Wednesday’s monetary policy meeting and rate statement by the Federal Reserve would add to signs that US interest rates would be raised. Against the Euro (EUR), the ‘Greenback’ advanced due to worries over the Greek debt crisis. The Pound Sterling meanwhile was weaker against the US Dollar due to a lack of market moving economic data releases.

US Dollar (USD) Exchange Rate Fluctuates against GBP, EUR before FOMC Announcement this Week

On Tuesday, the US Dollar softened against most of its major peers as investors locked in profits ahead of the US Federal Reserve interest rate statement. A run of mixed data has raised uncertainty as to whether policy makers will still be in favour of hiking rates in September. The Pound Sterling continued to be softer against the ‘Greenback’ despite data released by the Office for National Statistics (ONS) showing that inflation as measured by Consumer Price Index (CPI), rose to 0.1% in May, up from the -0.1% recorded in the previous month.

Federal Reserve Policy Statement Sends US Dollar (USD) Exchange Rate Falling, GBP/USD Hits 7-Month High

Midweek, the ‘Greenback’ weakened against the Pound and other major peers. The decline came after the Federal Reserve lowered both its growth and interest rate forecasts and Fed Chair Janet Yellen said that she wanted to see ‘more decisive evidence’ that the world’s largest economy is growing strongly before a interest rate rise will be warranted. The dovish statement also saw the US currency tumble against emerging and commodity based assets. Yellen said that rates are still expected to rise but the rate of rises would be very low. Against the US Dollar, Sterling strengthened to 1.58 as the Federal Reserve lowered both its growth forecast and interest rate projections.

At the end of the week, the US Dollar was mixed against its major peers as Wednesday’s dovish Federal Reserve policy statement continued to weigh. The currency did receive some support from data which showed that US Consumer prices increased at the fastest rate in more than two years in May. Prices climbed 0.4%, adding to the 0.1% gain in the preceding session, but were below economist expectations for a rise of 0.5%. The Pound continued to trade at the 1.58 level as the US currency remained under pressure from Wednesday’s dovish Federal Reserve policy statement.

The main US report due for release next week will be Wednesday’s US GDP data.

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