Will Pound Sterling US Dollar Exchange Rate Fall to 1.4566 GBP USD?

September 28, 2015 - Written by John Cameron

STORY LINK Will Pound Sterling US Dollar Exchange Rate Fall to 1.4566 GBP USD?

The US Dollar (currency : USD) enjoyed sustained support during the latter part of Friday’s trading session following comments from US Federal Reserve Chair Janet Yellen. The American central bank’s supremo told an audience at the University of Massachusetts that interest rates in the world’s premier economy remain ‘on track’ to rise before the end of this year. The Pound Sterling US Dollar exchange rate tumbled to its lowest level since 5th May, touching 1.5136 GBP USD during late trading on Friday in response.

The Fed Chair suggestion that the majority of US policy voters, ‘including myself, currently anticipate an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter’. Yellen also stated that conditions in America’s economy, ‘generally appear solid’ - an assertion which makes a tightening of US economic this year significantly more likely.

The Pound Sterling US Dollar exchange rate was trading down to as low as 1.4566 GBP USD as recently as the middle part of April of this year. Many analysts now forecast that the pair will retrace back down towards this level as we approach the Fed’s December meeting, which is considered the most likely to yield a rate hike.

Elsewhere, Friday’s session was also notable for a renewed push forward by the high-yielding Commodity Dollars. Global stock markets recorded strong gains early in the day, with London’s benchmark FTSE 100 index registering gains of 2.47%. Meanwhile, Frankfurt’s Dax outperformed the FTSE 100, jumping by some 2.77%. However, Chicago’s broad ranging S&P 500 index slipped by 0.05% on the session following Yellen’s comments.

The Pound Sterling Australian Dollar exchange rate slid back into the 2.1500s as a result of the risk-on trading, while the Pound New Zealand Dollar exchange rate settled back in the 2.3000s. However, the late shift out of risk which Yellen’s comments precipitated during the final trading hours of the week have led many FX insiders to forecast that the Pound Sterling may record fresh gains against the Commodity Dollars during the early part of this week.

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TAGS: American Dollar Forecasts Pound Dollar Forecasts