Pound to Dollar Forecast - Losses for GBP-USD Conversion Rate in 2015

July 30, 2015 - Written by John Cameron

STORY LINK Pound to Dollar Forecast - Losses for GBP-USD Conversion Rate in 2015

Official data pointing to a weak pace of price rises in the euroland’s premier economy have held back the euro (currency : EUR) on the day today. The latest German Consumer Price Index figures revealed that domestic inflation had fallen back from a year-on-year 0.3%. The move lower was blamed by the continuing low levels of global oil prices during the past month which has suppressed input costs for German manufacturers. Economists now forecast that the pace of price increases in the euroland could slip to zero percent once against before the end of the year.

The data hit the single currency hard and the Pound Sterling to euro exchange rate climbed through the 1.4300 GBP EUR threshold in response. The pair topped out at 1.4311 a short time ago and analysts forecast that the pair could track higher in the medium term thanks to investors’ changing attitudes towards the European Central Bank’s ongoing Quantitative Easing (QE) programme.

Carsten Brzeski of giant Dutch investment bank ING stated earlier that, ‘you could rather see it as a confirmation of the stance of the ECB not to follow the premature calls of some market participants calling for early tapering of QE.’ He went on to assert that, ‘the success of the ECB's QE programme can, at least up until now, not be measured in headline inflation data - it's going to take while before we really see the impact on the real economy from QE.’

A move through to a fresh 7 ½ year high would now appear possible for the Pound Sterling against the shared currency.

Elsewhere, this afternoon’s session also brought the publication of the latest US Gross Domestic Product data. Analysts had been expecting a year-on-year showing of 2.5% for the Q2 figure, so the 2.3% result was a little disappointing. However, an upward revision America’s Q1 GDP figure, also announced this afternoon, lightened the blow somewhat and the Buck still managed to push ahead as a result. The upshot saw the pound Sterling US Dollar exchange rate settle back into the 1.5500s and experts predict further losses to come for this key pair.

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